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Consumer Protection Rules

When state legislators began struggling with the concept of utility deregulation, one of their primary concerns was how to release customers into a new competitive landscape without falling victim to potentially confusing terms and conditions from competitive energy providers. While this may sound somewhat paternalistic, legislators and regulators wanted energy suppliers to compete on price, quality of service, and value-added products and services. They did not want customers to have to decipher widely varying terms and conditions that would make comparing offers almost impossible. Therefore, consumer protection rules were established to create a common playing field on which energy providers and customers could interact.

Protected Consumers

The consumer protection rules apply to all retail electric customers. In Texas, commercial customers with a peak demand of 50 kilowatts or greater are allowed to waive their consumer protections and agree to alternative terms and conditions with their electricity provider. This is because medium and large commercial and industrial customers are considered to have unique needs and the accompanying sophistication to agree to terms and conditions without the protective umbrella of the consumer protection rules. Residential and small commercial customers cannot waive these protections under any circumstances.

Contract Documents

In Texas, the consumer protection rules are codified in the PUC Substantive Rules. Obviously, it is difficult to assert that consumers need blanket protections but then expect them to be able to locate and translate complex regulations. The solution was to require electricity suppliers to provide every customer with a copy of a standardized plain-English summary of some of the more significant rights and protections. This document is titled “Your Rights as a Customer” (YRAC). The YRAC, along with the Terms of Service (TOS) and Electricity Facts Label (EFL) constitute the agreement between the retail electric supplier and the customer.

Your Rights as a Customer

While many retail electric customers may skip reading the YRAC, it contains important information regarding service disconnection and dispute resolution. Among other things, the YRAC explains how customers aged 65 and older can switch providers and have the deposit waived if they are in good standing with their current retail electric supplier. In addition, it explains how their energy supplier cannot charge customers that move during the term of their agreement an early termination fee. The next time you shop for the best rates on electricity, be sure to read the YRAC and other documents provided by the supplier. It could pay to know your rights in the deregulated electricity market.

About: Charlie Hewitt

Charlie Hewitt has more than 25 years of in-depth energy experience having served in executive and managerial roles at some of the largest retail energy providers in North America.His expertise covers a wide range of retail energy disciplines including pricing, contracting, risk management, and credit. He holds an MBA from UT Arlington, MA and BS degrees in geology from UT Austin, and was a TXU environmental research fellow.

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