Bill Would Ban Fees for Conserving Electricity

Toni Harrelson tries to limit her electricity use, she says, because every dollar counts for fixed-income folks like her.

The 59-year-old is conscious of how often she washes and dries her clothes, and on cold winter days she typically heats just half of the roughly 800-square-foot house she shares with her two “kitties” in Lovelady — a small town about 100 miles north of Houston.

The fruits of those efforts? A $9.95 surcharge on most of her electric bills. Dallas-based StarTex Power adds the fee whenever she uses fewer than 1,000 kilowatt-hours of electricity in a month.

Harrelson, a former locomotive engineer who receives disability payments, is one of many Texans who pay more to use less – or at least too little – electricity. “I think it goes against conservation,” she said.

At least one Texas lawmaker agrees. Rep. Sylvester Turner, D-Houston, is pushing legislation that would bar companies from charging such “minimum usage” fees in the competitive power market.

“If we are a legislature committed to efficiency, we cannot punish people for meeting the standards we have set forth,” Turner said last week at a House Committee on State Affairs hearing, where he read letter excerpts from frustrated constituents.

His proposal, House Bill 2254, faces opposition from several industry groups, including those representing electricity generators and retail electricity providers. They say such fees help cover the fixed costs of providing service, and suggest unhappy ratepayers should just switch to better plans.

“It would interfere with certain market conditions,” John Fainter, president of the Association of Electric Companies of Texas, said of the bill. “We certainly feel that all consumers need to be educated.” 

Not all Texas providers charge minimum usage fees, but plenty do. The fees vary widely.

In a 2013 survey of fixed-rate plans in the Oncor service area — which includes swaths of North and West Texas — the consumer group Texas Ratepayers’ Organization to Save Energy found that 36 of 44 retail electricity providers charged minimum usage fees ranging from about $7 to $20.

In 2011, just 15 of 41 companies in that area charged the fees, ranging as high as $13. 

A Houston Chronicle report last January found that more than 70 percent of Houston-area electricity options contained terms that penalized ratepayers using too little power. The minimum fees averaged more than $10 for ratepayers using fewer than 1,000 kilowatt hours of electricity.

Critics say the fees muddle efforts to curb demands on Texas’ occasionally stressed power grid, and disproportionately hit low-income and elderly Texans who keep their air conditioners off and homes dark in an effort to cut costs. 

“It usually falls on the bills of the people who have the most trouble paying,” said Leah Mueller, senior adult department coordinator for Jewish Family Service of Houston, a nonprofit group that helps some Texans with their utility bills and provides other services.

Industry groups say those who dislike their power plans should simply find new ones.

“The beauty of the competitive market is the customer gets to pick,” Catherine Webking, executive director of Texas Energy Association for Marketers, a group of retail electricity providers, told lawmakers last week as she spoke against Turner’s bill, which remains pending in committee. “We feel that the bill itself actually eliminates options for customers” and could result in higher prices elsewhere. 

A state website called Power to Choose allows consumers to compare the prices of hundreds of electricity plans in their areas. (Regulated monopoly utilities still serve a few areas of Texas, including Austin and San Antonio. Those residents don’t have the options.)

Consumer advocates say that comparing all the terms of electricity plans on the website is more difficult than power companies describe, and people without internet access have even more trouble.

“It’s a bit difficult for seniors and disabled people every month to just look at new plans,” Mueller said. “It’s just not realistic.”

Harrelson, a StarTex customer for years, says she's "not smart enough to get on a computer," and doesn't own one.

The last time she researched other power options, she said, the Public Utility Commission mailed her a packet of information, and she called several companies but had trouble comparing all terms of service — some of which were different than what she saw in the packet.  

On its website, StarTex lists six options for customers in Harrelson’s ZIP code. One yearlong option does not include a minimum usage fee, but it costs about 10 percent more on a per-kilowatt-hour basis than the equivalent plan that includes the surcharge.

“In Texas, minimum usage fees help to cover the fixed-costs associated with servicing a customer’s account,” the company said in a statement. “StarTex Power offers plans both with and without minimum usage fees, and we can help customers determine which option is best for their situation.”

Disclosure: The Association of Electric Companies of Texas is a corporate sponsor of The Texas Tribune. Oncor was a corporate sponsor in 2012. A complete list of Tribune donors and sponsors can be viewed here.