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Electricity Shopper Safety Nets

You are lucky enough to live in an area where you can choose your electricity provider. After doing a little online shopping, you choose an electricity plan with a great rate.  The electricity provider you selected is now on the hook to deliver what they sold.

Sometimes things do not go quite as expected. Billing questions and customer service problems can occur even with the highest rated electricity providers.  Straightening out these issues is usually a quick process.  However, what happens if your electricity provider suddenly closes up shop?  Fortunately, there are consumer safety nets in place to protect you.

Assigning to another Provider

An electricity provider will often sell its customer portfolio to another supplier if gets into financial trouble. Customers may find it unsettling to have their service switched to a supplier they did not choose.  However, it usually works out well for the customer.  You continue to receive your electricity rate for the remaining term of your agreement.  You also get to check out the new provider before it is time to shop for electricity rates again.

Utility Default Service

If your home is located in an area where default utility service is available, the most common occurrence is that you are automatically switched back to the utility. This is a seamless process and you never lose electric service.  The utility becomes your electricity supplier and charges you the standard rate in effect at that time.  The only downside is that you probably switched away from the utility to get a better a price.  Now you are back where you started.  The good news is that in most cases you can start shopping for a better electricity rate immediately after being switched back to the utility.

Texas Provider of Last Resort

For Texas electricity consumers, there is no default utility service available. However, there is still a safety net.  The Public Utility Commission of Texas assigns electricity providers to serve as the Provider of Last Resort (POLR).  Each customer class in each utility service area has an electricity provider assigned to serve as the POLR.  For example, Reliant is the POLR serving residential customers in the Centerpoint utility area.

Having POLR service assures that you continue to receive electric service even if your provider defaults. However, there is a big difference between Texas POLR service and the default utility service in other states.  Default utility service rates are often 10 to 20% higher than what consumers were paying with their competitive energy supplier.  Texas POLR rates might be two or three times higher than the rate you were paying your electricity provider.  Switching back to default utility service might sting a little for a Connecticut consumer.  A Texas POLR customer will get a shock on an entirely different level.

Texas POLR service is truly a safety net rather than a comfortable hammock. Consumers switched to POLR service will want to immediately shop for a new provider.  In many cases, your exposure to the high POLR service rates may only last a couple of days.

Choosing an Electricity Provider

When you choose and electricity provider, the last thing you expect is for them to go out of business before the end of your agreement. Your power will not be disconnected if this happens but you could be left having to shop for electricity before you planned.  This is why it matters to be careful when selecting an electricity provider.  ElectricityMatch only works with financially sound providers.  The providers listing offers with us use best practices when it comes to risk management.  While there are no guarantees, you should feel comfortable with the financial stability of our provider partners.

2 Comments on “Electricity Shopper Safety Nets”

  1. Charlie, you make a good point about how you should be careful when selecting a provider. I would want to make sure they have a good reputation and their financials in order. My husband and I have been thinking about choosing a new electricity plan, so we will have to start asking around for referrals.

  2. It is good to know that governments have backup plans for the last resort. The provider of last resort could actually even be the best deal in some cases. It would be good to shop around and make a choice based on what you decide to be most important to you.

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