HOUSTON – As if finding the best electric rate and plan wasn’t hard enough, now some electric companies are trying to keep brokers from helping consumers get the lowest rates.
KPRC 2 investigative reporter Amy Davis is looking into this battle between an electric provider and an energy broker that has customers caught in the middle.
If you don’t want to spend the time finding the lowest electricity plan, you can outsource that to a broker. We’ve interviewed many of these companies over the last 10 to 15 years. For a small fee, brokers compare shops and handle all the paperwork so you don’t get stuck paying more than you should for electricity. It’s great for the consumer; but not all retail electric providers like the arrangement.
Bridgette Crawford is a busy mom of two. As a real estate agent and an appraiser, she can help you find a home. But when it comes to finding an electric provider, she didn’t feel as knowledgeable about the process.
“I actually got on the Power to Choose, knowing my contract was coming up and starting trying to research it and just found it really frustrating,” said Bridgette Crawford.
The high rates, the choices, and the gimmicks. She decided to let Thigbe, an energy broker, wade through all of it.
“You know what,” she said. “I’m going let them do it because that’s what they do every day.”
“We come in and work for the customer, not for the supplier,” said Mike Brasovan, Thigbe owner.
In March, Brasovan signed Crawford up with Rhythm Energy for a 4.7 cent rate, 9 cents a kilowatt all-in.
If you’ve checked rates lately you know that’s really good. Brasovan signed up close to 200 other customers on Rhythm plans through the state’s Power to Choose website.
“The customers are happy with it?” Davis asked.
“Yes, customers are very happy,” Brasovan said.
“The electric company’s not so much?” said Davis.
“The electric company’s not so much,” Brasovan confirmed.
Electric provider said public rates are just for individuals
In fact, Rhythm reached out to Thigbe and said the plans on the Power to Choose website are for individuals only, not customers using brokers. They said if Thigbe didn’t move those customers to other high-priced plans, “we will be disconnecting their service.”
“I don’t think it’s fair at all,” said Crawford.
Brokers say many of the plans on the Power to Choose website are teaser rates or loss leaders. Electric companies want you to sign up and forget when your plan expires so your rate will double.
“They want the customer to come in at a low price and then stick around for a higher price. If we’re always there making sure that the customer is shopping, and getting the best deal, that doesn’t happen... so they see that as a threat to their profit,” said Brasovan.
When brokers in any industry do work on behalf of a customer, they ask you to sign a limited power of attorney, an agreement that gives them permission to act as you. That’s exactly what Thigbe did. But Rhythm now says all those Thigbe sign-ups were fraudulent.
“It’s almost like saying ‘You can go buy a house or I’m going sell you a house, but you can’t use a real estate agent to help you negotiate the deal.’ That’s not right. Or you can’t use an attorney to review a contract, that’s not right. So why would it be okay to say you can’t use an electricity consultant to help you buy electricity?” said Brasovan.
“So why am I being penalized because I found somebody to do the legwork for me? It doesn’t really make a lot of sense to me,” said Crawford.
Investigation into electric contracts being canceled
The Public Utility Commission is investigating these issues. And it’s bigger than just Rhythm and Thigbe. Can retail electric providers discriminate and restrict access to their lowest priced plans? Make them off-limits to brokers?
In this instance, the Customer Protection Division has told customers Rhythm will violate PUC rules if it disconnects service to customers with contracts through Thigbe.
But the PUC did tell us in a statement that electric companies may refuse to provide service to anyone as long as they’re not discriminating based on race, religion, sex or any other class protected by federal energy brokers are not a protected class. (Read the PUC’s full statement below.)
This is an issue we are following closely. We will let you know what happens.
Statement from Public Utility Commission
The investigation by our Division of Compliance and Enforcement is ongoing, so I can’t share additional information.
PUCT rules explicitly clarify when a retail electric provider (REP) is allowed to refuse service to an applicant or customer and when they are not.
Chapter 25 §25.477 states that a REP “may refuse to provide electric service to an applicant or customer for any other reason that is not otherwise discriminatory pursuant to §25.471(c).” §25.471(c) prohibits a REP from unduly refusing to provide electric service or otherwise unduly discriminating in the marketing and provision of electric service to any customer because of the following: race, creed, color, national origin, ancestry, sex, marital status, lawful source of income, level of income, disability, familial status, location of customer in an economically distressed geographic area, or qualification for low-income or energy efficiency services.
Except for cases involving fraudulent enrollment, a REP may only disconnect the service of a residential customer for a defined set of reasons that are spelled out in §25.483. residential PUC Staff continues to share its serious concern with all the parties to this investigation that no customer’s service is illegally disconnected.
Statement from Rhythm Energy
Rhythm plans offered on powertochoose.org (“PTC”) are only available directly to customers. As such, Rhythm requires customers signing up for its PTC offers to confirm they are the actual customer, not a 3rd party agent acting on the customer’s behalf.
Earlier this year, Rhythm became aware that someone who now claims to be a client agent seemingly (i) provided Rhythm with false information by misrepresenting they were the customer, and (ii) on numerous occasions held themselves out as the customer instead of a client agent acting on the customer’s behalf. Rhythm has evidence that indicates a third-party took steps to conceal their identity during the attempted enrollment process and took actions to prevent Rhythm from being able to have any direct communication with the actual customer.
Rhythm looked into this and concluded that each service address enrolled with false information, it was providing electrical service without a valid contract. Rhythm reached out to Thigbe and asked that they validly re-enroll those customers’ plans with Rhythm or move the accounts to a different REP. Rhythm provided Thigbe more than a month to do so; however, no changes were made.
Additionally, Thigbe has failed to provide any client agent agreements associated with any current Rhythm customer showing Thigbe’s authority to act on behalf of the customer, despite Rhythm having asked for these agreements, which under PUC rules they are required to provide upon request from the REP.
Brokerage services are not what is at issue here. The issue is that a 3rd party client agent, who happens to be a broker, appears to have: 1) misrepresented their identity during the enrollment process, 2) deliberately and falsely claimed to be the customer while attempting to make changes to various customer accounts during phone calls with Rhythm’s customer support center, and 3) instead of resolving the problem they caused, appears to have encouraged their clients to file complaints with the PUC against Rhythm. Rhythm has been collaborating with the PUC to minimize the impact on customers, who were likely unaware of Thigbe’s actions. When interacting with Rhythm, Thigbe falsely held itself out as the customer, not as a client agent acting on the customer’s behalf. Rhythm believes this type of fraudulent misrepresentation is serious. Additionally, Rhythm has provided the PUC with information regarding Thigbe’s actions, which we believe led to the PUC opening an investigation into Thigbe LLC.
Rhythm maintains direct contractual relationships with brokers, including those acting as client agents. However, in order to ensure customer protection, Rhythm takes steps to ensure that any customer accounts managed by client agents receive proper customer care. When Rhythm contracts directly with brokers, it does so with strict standards to ensure integrity and customer satisfaction.
MORE INFO: How to file a complaint against an electric company.
KPRC 2 Investigates spoke with other electricity brokers for insight on this issue. Texas Power Agents is another company that helps customers find the best electricity rates. Owner Chris Coulter explains a little history of why this is happening.
“Several companies preclude brokers by advertising plans on PTC (Power to Choose) since they are call-in only. At times, the entire couple of pages of PTC is filled with such plans from Amigo Energy/Just Energy/Tara Energy (same parent company) and Gexa Energy/Frontier Utilities (same parent company).
Overall, there is an illusion of choice for shoppers since the market has consolidated over the last few years. NRG (Reliant) and Vistra Energy (TXU) are the largest Retail Suppliers by far. When deregulation occurred the former vertically integrated utilities split the “retail electric provider” and “transmission and distribution” functions. As a result, CenterPoint became the monopoly transmission provider (poles and wires) company responsible for distribution in the Houston area and Oncor assumed this role for the Dallas/Ft Worth region. Reliant Energy and TXU assumed the Retail Supplier roles for those respective areas and have continued to grow and prosper.
They have absorbed numerous other companies that either went out of business or were simply purchased outright by the larger entities.”
The Public Utility Commission explains the rights you have as an electric customer.
