What happens when my electric company goes bankrupt?
TXU for instance would be your “POLR”
For those of you who wonder what happens when an electric company goes bankrupt and your concerned about losing service, here is an article to alleviate this fear.
Safety-net Electric Rates Fall in Houston area
PUC, TXU Agree on new “Provider of Last Resort” Terms
Contact:
Terry Hadley 512-936-7135
Pager: 512-322-1457
Tuesday, November 20, 2001 –An agreement between the Public Utility Commission (PUC) and a TXU affiliate known as Assurance Energy reduces previously announced rates and fees for guaranteed back-up electric service in the Houston area and south Texas when retail competition begins Jan. 1, 2002.
Residential customers of investor-owned utility affiliates will enjoy a six-percent rate cut, adjusted for fuel prices, when retail competition begins on Jan. 1, 2002. Customers who choose a competing retail electric provider (REP) may enjoy even larger cost savings. However, it is necessary for the PUC to designate a “provider of last resort” (POLR) to serve as a safety net if a customer’s REP cancels electric service.
“I commend Assurance Energy for agreeing to lower its POLR rates and fees,” said PUC Chairman Max Yzaguirre. “This is good news for the Houston area and south Texas, and reflects the lower natural gas price environment that currently exists.”
The previous agreement was negotiated early this year when the price for natural gas, a major fuel for generating electricity, reached historical highs. Currently, natural gas prices are substantially lower. While the original agreement resulted in a residential rate of 12.5 cents per kilowatt-hour (kWh) for summer months and 9.5 cents per kWh for non-summer months, the renegotiations resulted in rates of 9.5 cents per kWh for summer months and 7.5 cents per kWh for non-summer months. These rates do not include non-bypassable transmission costs.
Under the Texas electric restructuring law, a POLR is required to:
Assure continued service.�
Offer a standard retail service package for each customer class at a fixed, non-discountable rate.�
Respond to customer inquiries and follow applicable customer protection rules.
Provide the same benefits for low-income customers as other providers.
POLR service is relatively high-priced due planning costs and uncertainty in the number of customers and electricity load. This service is intended to be temporary and used only under infrequent circumstances if a REP is unwilling or unable to provide service, or if a REP terminates a customer for non-payment. Customers will have at least 10 days notice to shop for another REP before being switched to the POLR. If the customer is unable to locate a new provider within 10 days, then the POLR can provide service during the time that the customer is shopping.
Assurance Energy will serve as POLR for residential customers for at least six months. The PUC may adjust the rate if fuel prices change significantly.
POLR customers covered by the agreement with Assurance Energy are residential and small non-residential customers (electricity demand up to one megawatt) currently served by Reliant/ HL&P, Texas New Mexico Power, Central Power and Light, Sharyland and West Texas Utilities, along with large non-residential customers (demand greater than one megawatt) currently served by TXU.
The PUC encourages competition and customer choice while ensuring electric and telephone operations, services and rates are fair and reasonable.
All PUC News Releases are available at www.puc.state.tx.us
Last Updated: 02/03/03
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