Electric Customers Helped by New Provider of Last Resort Rule
Improved Rule to Result in fewer POLR Customers

Contact:
Terry Hadley 512-936-7135
Pager: 512-322-1457

Thursday, August 22, 2002 -- Fewer Texas electric customers will be switched to the Provider of Last Resort (POLR) in areas under competition under a new rule adopted by the Public Utility Commission (PUC) on Thursday. Beginning Sept. 24, customers who have switched to competitive retailers but are later terminated for non-payment would be transferred to an affiliated provider at the Price to Beat instead of a higher POLR rate.

"The new rule provides POLR service only to those who absolutely need it," said PUC Chairman Rebecca Klein. "It could save thousands of Texans from having to pay extra deposits and potentially higher POLR rates."

Beginning Sept. 24, residential and small commercial customers of competitive retail electric providers will not be switched to the POLR because of non-payment. Instead, they will be switched to the affiliated REP and be charged the Price-to-Beat rate, which is lower than current POLR rates. Customers already belonging to the affiliated REP are subject to disconnection for non-payment after a 10-day notice and will not have the additional burden of being switched to a POLR.

The Texas electric restructuring law established POLR service as a temporary safety net if a REP leaves the Texas market and its customers are not transferred to another competitor. POLR service is relatively high-priced due to planning costs and uncertainty at any given time in the number of customers and electricity load. The PUC discourages customers from relying on POLR service.

The PUC encourages customers who have difficulty paying their bills to contact their REP for information on available payment plans and eligibility for the LITE-UP Texas program for a low-income discount.

"Customers who may get behind in their bills should work out a payment plan with their provider," said PUC Commissioner Brett Perlman. "Customers already on POLR service should shop for a new provider immediately."

Beginning in 2003, the PUC will designate a POLR for a two-year term through a bidding process which limits residential rates to 125 percent of the Price to Beat. If the bidding process does not result in a POLR selection, then the PUC will use a lottery to determine the POLR.

The law requires a POLR to ensure continuous service, offer a standard retail package at a fixed rate, and follow customer protection rules. The law also requires a POLR to provide the same benefits for low-income customers as other REPs.

Customers receiving POLR service before Sept. 24, 2002, have until Dec. 31, 2002 to choose another REP. If a choice is not made, then the customer will be served by the POLR's competitive affiliate at an unregulated rate.

In 2004, the PUC will determine if all REPs should be authorized to disconnect customers for non-payment.

Last Updated: 08/23/02