I get tons of customer reviews through Texas Electricity Ratings, and one of the most consistent issues I see are negative reviews based on misconceptions, or in some cases, a lack of understanding of how the deregulated electricity market works. Since a big part of what I do is to try and help educate people on how the market works I’m going to paste some reviews that I didn’t let through the website for various reasons, which I will explain at length below.
These first two reviews go together:
1.) StarTex Power:
I switched my electric service to StarTex Power about June 3, 2011. I selected their Residential Promotional Variable Price Product. My electric bill began to rise significantly after October, 2011 and upon review I saw that the electric rate they were charging me had almost tripled. My initial rate for the selected plan was 4.75 cents per KWH. That plan allows them to change the rate at their sole discretion. The following month my rate almost tripled to 13.68 cents per KWH. My rate has remained above 12 cents per KWH for the rest of the year 2011. I see from the EFL on their website that their Residential Promotional Variable Price Product is now charging 6.84 cents per KWH. However, they are billing me almost twice that amount. They shouldn’t switch me to another much higher plan without notifying me first. But that is their business plan: Trick customers into signing up for a great rate for one month and then triple their rate and hope they won’t notice.
and
As many have noted, this company will sneakily jack up your rates if you’re not paying attention. They’ll lure you in with a low introductory rate, induce you to autopay your bills, then double your rate immediately at the end of your term and hope it takes you a while to notice. Exceptionally sketchy business model. I’ve used several providers and this company is by far the worst.
Ok, my issue with these reviews is that these people are complaining specifically about their variable rates increasing and attributing it to StarTex. But the fact of the matter is, this is just how variable plans work, regardless of providers. Introductory rates are just that, and they expire. Additionally, in the first review, part of the reason the guy’s plan tripled by October was due to the August record-breaking heatwave and prices combined with his variable plan. So it isn’t a StarTex thing, it’s a variable plan thing. It’s the main reason I always suggest a fixed-rate plan. I’m highlighting these reviews to help people understand how variable plans work and the pitfalls of signing up for them without understanding that customers have to watch their rates diligently.
2.) First Choice Power:
I was new to the DFW area a few years back and didn’t have a good idea on where to move. I choose a semi crappy apartment complex. Several individuals who gave their notice to move out during my stay there warned me that their electric bill had skyrocketed the last couple of months. When I gave my notice, my next bill went to just under $400 (from avg $100 a month). I called First Choice Power and expressed my concerns about the apartment complex. I spoke to several folks there and asked them if someone could come investigate. There was no care from customer service and I was told that I needed to be more responsible/reduce my usage. The day I moved out, I turned everything off in the apartment, including fridge, micro, etc. I went out to the box and sure enough the ticker was still moving. I called FCP and told them that they really needed to investigate. Their new excuse was… I’m sorry but you don’t live there anymore so there’s nothing we can do about it. Thanks for nothing
While the woman has a legitimate gripe about First Choice’s customer service, the issue I have with this review is that the woman’s angst with First Choice Power in regards to her meter and usage is misplaced. First Choice isn’t responsible for any meter issues. And asking First Choice to investigate was also fruitless…again, the woman should have contacted Oncor. And while First Choice should have HELPED her to understand that she needed to contact Oncor (again, questionable customer service), I’m highlighting this because some people still struggle with the difference between the electricity company that bills them (First Choice Power, etc.) and the pole and power company (Oncor, Centerpoint, etc.) that are responsible for meter issues and the like. People confusing the responsibilities of their REP (Retail Electricity Provider) and TDSP (Transmission and Distribution Service Provider) is still one of the biggest misunderstandings in deregulated electricity in Texas, even 10 years later.
3.) Tara Energy:
Watch out! This is a bate and switch kind of a company. They hook you showing a low price per KW and bill you excessively for some fee called T & D charge. I asked them what this was and was told it is what Oncor charges us. I called Oncor and asked if my KW usage has stayed the same can this so called charge go up? They said no! I will be calling the PUC next!
This guy is going to be sorely disappointed when he calls the PUC because he won’t find their response very satisfying. T&D charge stands for Transmission & Distribution charge. It, along with a number of other potential charges, are passed directly to the customer and have nothing to do with whichever electricity company someone might use. It is listed in the Electricity Facts Label (EFL) for every plan of every electricity company on the market. Also in every EFL is a disclosure that those rates can change at any time based on decisions that have nothing to do with an REP. Other TDSP charges that can be passed down to customers are charges for things like Smart Meters, or Hurricane Recovery fees, etc. Again, this person’s anger at Tara as misplaced, as they have as little control in those fees as the person who lodged this complaint. I’m not certain what the person he spoke with at Oncor was talking about at all. In fact, Tara Energy themselves explained the charges pretty clearly on their website:
Transmission & Distribution Utility Charges (“T&D Charges”)
The amount you owe your local utility for transmitting your electricity, and maintaining wires, poles and meters. The amount billed by
Tara Energy, on behalf of the transmission and distribution utility (TDU) shall not exceed the amount of the TDU tariff charge(s).
4.)Stream Energy:
A bit of a note before I delve into the next review, as it’s not so much education as something that I generally roll my eyes at when they come through my website. They would more accurately be classified in a blog post titled “Fun with Customer Reviews.”
After being a satisfied Stream customer for 3 years and so pleased with both their pricing and service, that I joined Ignite, Stream’s marketing group, as an Associate to help share my wonderful experience with others and share the knowledge to friends and family about how easy it was to switch and how much money they could save. I can’t say enough good things about Stream, but their prices are lower and their customer service is better. They were actually Rated #2 in TX by JD Power & Associates!
Ambit and Stream reviews can be difficult because they often come from their Marketing Associates and are thus, by definition, biased. There aren’t many instances of people who willingly sign up to be a salesman for a product to make money and turn around and bad-mouth said product. So when I see reviews like the one above, I have a hard time taking them at face value because they come from people who have a financial interest in making Stream (or Ambit) look good. Case in point: Stream didn’t rank #2 in TX by JD Power & Associates…they were ranked 7th.
In 2010 Stream Ranked 8th. In 2009 they were 6th.
Anyway, I hope this article was helpful to some people in regards to learning some new things about how the deregulated Texas electricity market works.