Electric contracts should be squared away before summer begins: PUC Chairman Walker

By Public Utility Commission of Texas Chairman DeAnn Walker


Texas gets hot in the summertime. According to the National Weather Service, this summer is predicted to be hotter than usual, which means Texans are more likely to crank up their air conditioners to get through the hottest parts of the day, increasing demand across the state. When that demand combines with a supply that has recently been reduced by the retirement of several power plants, the wholesale cost of electricity in Texas could rise. That means it is time for Texans who live in areas that allow for retail competition to get their electric contract squared away before summer begins. That process is based on a few key questions:


Will prices go up?

Texans have become accustomed to below-average energy prices thanks to our state’s competitive electric market and a surplus of generating capacity. When electricity demand increases in times of lower supply, the market follows timeless economic principles and prices trend upward, signaling the need for private-sector investment in more generation. This summer is likely to be an up-cycle moment.

How can I avoid the impact of increased wholesale energy prices?

First of all, customers should have a contract that meets their unique needs. Our state’s retail electric providers work hard to win customer business and keep it. Under rules written by the Public Utility Commission of Texas, they are required to offer an average payment plan to any customer who is not currently delinquent in payment. Many will even customize a plan to meet individual needs. Making payments of approximately equal amounts over the course of a year in such a plan is one way to reduce the impact of higher summer bills.


When should I look into my contract situation?

Customers should take a look at their current contract’s end date as soon as possible. A fixed rate contract that expires because it was not renewed or replaced could put a customer into a month-to-month arrangement that is more “financially dynamic” than they might want. Fortunately, REPs are required to notify customers of a pending contract expiration a month or two in advance.


Read the rest of this column here at the Victoria Advocate.