This story originally appeared on Houston Public Media.
Frank St. Claire knows numbers and contracts. He graduated from MIT and became a lawyer and did big real estate deals. He’s now retired. Which is all good to know as you consider what now is challenging his analytical abilities. He’s been spending hours reviewing complicated contracts and pricing formulas.
“This is labor intensive. I had to do a spreadsheet in order to make any sense of it,” St. Claire told News 88.7.
What’s taking up so much of this retiree’s time? It’s his electricity bill.
St. Claire lives in Dallas, which like Houston and much of Texas, is part of the so-called competitive electricity market. That means you pick from dozens of electricity providers who each offer many different billing plans. But despite St. Claire’s hard work, he says he still ended up with bad deals.
How much money does St. Claire think he’s lost by not being signed up with the best plans available over the years?
“It would amount to the thousands of dollars,” he said.
St. Claire says a big problem he found is the state’s own Power to Choose website. It’s supposed to allow you to compare all those rate plans to find the one that’s the best deal for your household. But customers, including St. Claire, have filed formal comments with the Public Utility Commission of Texas.
One customer alleged that electricity providers we’re using “artificial pricing schemes” to mislead consumers who use the Power to Choose website to find the best plans.
“As far as I can tell these plans are designed to make it difficult to compare,” says Robert Poor. He’s not a customer, he’s in Los Angeles where he’s the founder of a web venture called Blue Dot.
His company promises to provide an unbiased analysis comparing your current plan to others. Poor says they’ve found — by analyzing the electric bills of several hundred Texans —- that a lot of people are paying way too much.
“Some people can save less, some people can save more, but on average, Texas consumers could cut down on their utility bills by 50 percent, by half,” said Poor.
(For our previous reporting on what Texans actually pay for electricity, click here.)
Poor says the problem is that the state’s Power to Choose website will often pull up plans with what look like cheap rates. But that in the fine print of the contracts you eventually sign, he says there can be fees, or higher rates if you don’t use the amount of electricity the offer was based on. And of course, what you will actually use fluctuates with the weather and other factors.
“So what will happen is you’ll end up paying a lot more,” said Poor.
But state officials defend the way electricity is marketed in Texas. Donna Nelson, chairman of the Public Utility Commission of Texas, was on a conference call with reporters Tuesday to talk about how she said Texas consumers could be saving money on electricity if they took the time to shop around. The media event was organized by a consulting company, DEFG, which was releasing a report on deregulated utility markets in North America.
But in light of what we’d been hearing, we asked Nelson about those complaints that the Power to Choose website can be deceptive. We asked if it is time to do something about the Power to Choose website to make it more protective of consumers.
“First of all, I am not aware of what you’re talking about,” responded Nelson.
But nonetheless Nelson told us: “Over the years we’ve worked really hard to make it more and more friendly to customers, and easier to use.”
Nelson said the utility commission is now making electricity marketers spell out that some rates are just short-term, promotional prices. She also said that a “fact sheet” for each plan should make it easier to compare one plan with another.
That hasn’t been the experience though of some consumers like Frank St. Claire.
“You have to pick up the phone and call each provider,” said St. Claire, explaining that he now goes off-line and calls directly to the companies to find the best deals.