April 29, 2008 admin

A Fixed Electric Rate is Not Always Locked In

Who are These Energy Providers?

With over 60 different retail electric providers in Texas operating in the state, for the time being you find yourself with a mix of electric companies that many people have never heard of before. Some of these energy providers have not been heard of before because of coming from out of state. An out of state Texas electric provider might be very capable of handling your commercial business or residential homes Texas power needs but the name just has never made it to your state until they came in and began operation. Consider Green Mountain Energy as a good example of an electric company most people have never heard of before. Prior to deregulation there were a few companies like TXU Energy and Centerpoint Energy but other then that most people had no clue of who the energy companies were in other states nor did they have a reason to care. I would guess that quite a few people now have heard of Green Mountain Energy even though they were not even operating in Texas prior to Texas deregulating the retail electricity market.

Prior to Deregulation There Were Many New Companies

Spark Energy is another company that no one had heard of prior to Texas deregulating but they have made a pretty good name for themselves in certain cities. Texas Power is another electric company that has quickly gained ground in name brand recognition in the state of Texas. A common element among these electric companies is a long history in the energy business. Spark Energy’s ownership has always had a very strong past in the natural gas related industry. Spark’s ability to hedge their energy correctly allows them to confidently price products for commercial and residential consumers without worrying that they will at one time have to break the contracts and raise the rates on their customers. Having experience trading commodities and hedging energy by buying natural gas futures contracts is a needed skill in the Texas electricity market. There are several companies that came into Texas with little skill and knowledge about how to properly run a Retail electric company. Because of limited experience or just bad management some of these companies have gone bankrupt or just raised there promised fixed priced electric contracts on their customers. Tara Energy, TriEagle, Texas Commercial Energy, and Riverway Power are a few companies we are aware of that have broken their electric agreements with their customers and raised rates on them despite the fact that they signed a binding agreement for a fixed electric rate.

More About, Tara Energy

Tara Energy has been involved in litigation with multiple electric customers of theirs regarding the hike in their fixed electric rate price. Most of these complaints filed with the PUCT have been settled out of court according to documents on file with the PUCT. The litigation with Tara Energy and their customers generally would go on for 6 months to 1 year before some type of settlement arrangements were made. There is a confidentiality agreement worked out with Tara and the electric customers that settled with them so we were not able to determine what type of settlement was offered to their customers who fought them in court. If you would like to read a sampling of a few of the multiple litigations that were waged against Tara Energy you can read it here: Tara Energy. Here is another from a furniture store against Tara Energy which was also settled for some undisclosed amount. Tara Energy verses Edelstein Better Furniture

Why Do Providers Cancel Their Energy Agreements?

The reason a few electric providers in Texas have renegged on their commercial or residential electric contracts has to do with plain and simple bad business. Best practices for the energy market were not used most likely in the buying and hedging of their energy. Some companies may not have hedged their bought energy at all. When the market went against them they were upside down on a large block of energy as they were in reality just betting on the market just the same as me or you were to buy a stock and hope it goes up.

Recently a new upstart electric company in Texas has broken the energy agreement for their fixed electric rate with their Texas residential electric customers. We have received several comments and phone calls from people that were told they would have to accept a higher Texas Power rate or go shopping for a new provider. It doesn’t do an energy customer any good if they go to lock into a fixed electric rate if the company is only going to break the agreement if the market does not go their intended way. Riverway Power Electric Company is a recent example of an energy company breaking their customers fixed rate energy agreements. We had an overflow of people call in around mid April saying they were not able to get a hold of Riverway Power. Riverway Power was not answering their phone calls as they probably had way to many callers calling to protest the hike in the rate they had thought was locked in all year. For those considering using Riverway Power with their supposed guaranteed lowest electric rate price we would like you to consider their track record. They are new to Texas and it didn’t take them log to break customer contracts. Below we have included their most recent description of their rate and their prices in the 5 different TDSP zones in Texas.

Riverway Power Electric Rates

Riverway Power Rates

What Texas Electric Provider Do You Recommend

If you need a low cost electric provider we recommend Startex Power. They are a large discount electric provider offering low cost residential and commercial energy to Texas homes and businesses. You will find a promotional link to their electric rate at the top left of this page. The rate offered from our site is the cheapest rate they offer. If you call them on the phone the rate will be a little higher.

Tagged: , ,

About the Author

admin Donny started ElectricityBid.com back in 2007 from his parents basement and has since married his wife Melody and had three sons, John Adam (7) and Noah (4) and our new 20 month old son. He enjoys tech related things, softball, kickboxing, going to the gym, excursions and activities together with his wife Melody. Our service allows you to shop and compare commercial and residential electric rates and providers. Would you take the time today to try our service and see how you like it. Thank you! and God Bless You!

Comments (5)

  1. shortcircuit

    I just don't see how it's fair that Riverway can cancel your 12-month contract when they have a no-out (not even death) policy for customers. If you break your contract, you are charged $150 bucks for early termination.

    I think it only fair, that if they break the contract, they owe you $150 bucks.
    Tell me again how great deregulation has been in Texas?

  2. cindyrace

    I was under the impression that Chapter 11 was a way to reorganize your "debts" – not get out of a responsibility that you made to a customer who agreed to a year long contract – BECAUSE YOU ADVERTISED SUCH A LOW RATE THAT YOU GOT THEM TO SWITCH TO YOU????? "OH WELLLL – we've decided that we didn't charge you enough – we'll just fill Chapter 11 and start all over"?????? How ridiculous is that. AND NOW….the customers have to LOSE MONEY because the rates are much higher now then when we made our "year long agreement" with them. I can't belive this legal.

  3. It looks like Riverway wanted to file for bankruptcy so they could keep their customers but for some reason this wasn't going to be an option either because it was illegal or their lawyers had their own reasons. Now the public utility commission is taking over Riverway Power's electric customers and is putting them all on the POLR rate. This rate has been around 22 – 30 cents kWh in the Houston area. I would switch providers as soon as you can as an electric bill like that would be a killer bill. For instance, .30 cents X 1000 kWh = $300. Instead of paying a little over $100 you will have to pay $300. Check the rates at the top left of the page for some low cost electric providers that will be around a couple years from now without changing their rate on you.

  4. Scott

    The PUC in Texas is "supposed" to protect consumers. THEY DO NOT. They are nothing more than civil servants that abhor their responsibility to the public. No one is protecting no one. Riverway is great evidence of that.

  5. liqd_eyes

    I am surprised you haven't said much about First Chice Power. That is one company I will never do business with again when my contract is over. Customer Service gives you the run-around on rate prices depending on who you talk to. I think they price gouge their customers, and the PUC doesn't seen to care.

Leave a Reply to Scott Cancel reply

Your email address will not be published. Required fields are marked *

Electricity Bid helps you find an electric rate and provider to save you money and keep life simple.

Get in touch with us!