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Brace Yourself – Electric Bills May Go Higher

Texas retail electric providers — the “light companies” — have a decision to make.  As of today, August 1st, many of them are paying 50% more for the electricity they buy from wholesale producers.  Now they have to decide whether they will pass the increases on to customers with “fixed rate” contracts that were supposed to lock-in a per kilowatt hour price.

If they try it, StateImpact Texas reports the Texas Public Utilities Commission is waiting for a customer to file a complaint.


via Flickr/89AKurt

The Texas Public Utility Commission raised the ceiling on wholesale rates last month, saying allowing higher profits will encourage utility companies to build more power plants to keep up with the state’s growth.

Most fixed rate contracts say “your price” can be raised if there’s a “change in law” that imposes higher costs on REPs.

Power companies now want to know if the PUC “changed” the law when it raised the cap on the peak wholesale price.

Some power companies say no it didn’t.  Others, including TXU and NRG, say yes it did.

Texas electricity retailers are at an ethical crossroad. Will they dare to raise rates on people with fixed rate contracts?  They all admit it would be a public relations disaster.  Stay tuned.


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