CONSUMER ALERT: What you should know if your electricity provider goes out of business

Power lines are seen in Houston in this undated file image. (KPRC)

HOUSTON – The fallout continues after last month’s historic winter storm that crippled the Texas power grid.

The Electric Reliability Council of Texas announced this week that retail providers are behind by $345 million in payments. The power providers that are in default of payment are now trying to figure out what is next for their companies and what to do with their customers. Other providers on the ERCOT list say they are not behind on payments and their customers do not have to make a change.

KPRC 2 Investigates has reached out to companies that ERCOT says are behind on payments to get more information for customers across Texas. Below are their responses.

Glossary for key terms electric customers should know

Retail Electric Provider (REP): This is the company you pay for your electric service.

The Provider of Last Resort (POLR): This company becomes your provider when your REP exits the market for any reason. If your REP were to go out of business, the POLR becomes your temporary REP so that you do not experience an interruption in service.

Volunteer Retail Electric Providers (VREP): A REP that has volunteered to provide POLR service.

ERCOT releases list of retail providers it claims are behind on payments

Retail providers respond

Energy Monger: It’s time to start ‘moving your customers’

Energy Monger sent a letter out to employees and brokers that said, in part: “At this time I think it is appropriate to start moving your customers to another provider of your choice. I have not been given any specific date of an ERCOT breach, but the POLR process looks to be imminent.”

Entrust Energy: Rhythm Energy is taking over all contracts

Entrust customers received a letter indicating their contracts would be rolled over to Rhythm Energy.

According to Rhythm Energy, the process started last week and will continue this week. Entrust Energy customers will not need to seek a POLR. Entrust Energy customers will not have an interruption in service.

Entrust Energy is based in Houston. According to its website, Entrust served over 170,000 customers throughout the United States.

Read more here.

Griddy: Removed from Texas market

Last week, it was reported that Griddy customers were moved to other energy providers after Griddy was removed from the Texas market.

Instead of being switched to POLRs immediately, many Griddy customers will go to VREPs. There are three in the greater Houston region (Reliant, Gexa and TXU).

Brazos Electric Power Cooperative, Inc.: Chapter 11

Brazos Electric Power Cooperative, Inc., has filed for Chapter 11 bankruptcy protection. According to its website, the Waco-based company is, “Texas’ oldest and largest, generation and transmission power cooperative serving 16 distribution Member cooperatives that serve more than 1.5 million Texans.”

Rayburn Country Electric Cooperative: Owes $41 million

ERCOT reported that Rayburn Country Electric Cooperative owes $41,619,069.04. According to CEO David Naylor, Rayburn Country Electric Cooperative is in dispute with ERCOT over the amount. It is working through that with ERCOT.

“We are sensitive to the impact it has on the members,” Naylor said. “We are making sure that all the costs are legitimate and valid and that it does not pass through any illegal costs to customers.”

Rayburn is a wholesale provider and members are still serving new customers. Other than the invoice dispute with ERCOT, it’s business as usual.

GridPlus Energy: Business as usual

GridPlus Energy was listed as in default on the ERCOT website. GridPlus said it’s an ERCOT error.

Company officials issued the following statement:

“GridPlus Texas Inc. began communicating (emails, recorded phone calls and voicemails) with ERCOT on February 26, 2021 regarding settlement obligations. Despite our numerous questions and being assured that ‘the Credit desk was reviewing’, we received no answers (and still have not as of the time of this statement). In the absence of answers, GridPlus Texas Inc. fulfilled all stated obligations and entered into a credit position on March 2, 2021.”

“New customers can enroll and current customers can renew. GridPlus Texas said it has no intention of filing Chapter 11. GridPlus Texas Inc. (“GridPlus Energy”) is current with all of its financial obligations, including ERCOT. GridPlus Energy has no plans to default on any obligations and allow our customers to be dropped to the Provider of Last Resort (“POLR”).”

Volt Energy: ERCOT Error. Volt is in good standing

KPRC 2 Investigates spoke with Volt partner David Santucci. Santucci said that Volt is in good standing. He believes it’s also experiencing an accounting error within ERCOT. Volt has called and emailed ERCOT to get the accounting error corrected.

“While ERCOT issued a market notice stating that Volt Electricity Provider short paid the market $1,341,690.61 on Feb 26th 2021, Volt strenuously asks ERCOT to reexamine their books. Volt only became aware of the issue after reviewing the market notice. Volt and the market must question ERCOT’s accuracy and proficiency with these important calculations. As per both Volts books and ERCOT credit reports, Volt had and still has a positive account balance since the date in question - Feb 26th 2021. Volt asks ERCOT to review their accounts and correct the notice before more harm is done to Volt and the market, as well as correcting all short pay calculations before payment is required.”

Note: 1) Volt never received any short pay notice from ERCOT. If ERCOT really thought Volt short paid the market, they would have notified us before the notice to the market.

2) Contacting ERCOT credit to rectify this issue has been difficult. We hope they return our email/calls this morning.

David Santucci / Volt Partner

Bulb Energy: “Protecting customers from price shock”

Bulb Energy also found itself on the list. It told KPRC2 Investigates that it is not going out of business. In fact, it sent a letter to the Governor urging him, “...to take immediate action to avoid irreparable harm to the Texas electric market, its participants, and the public.”

Bulb Energy released this statement:

Our priority throughout the storm has been our customers. It’s not right to ask providers to pay exorbitant ancillary charges to generators knowing that Texas consumers will end up paying much of the cost. And while Bulb won’t pass on costs from the storm to our customers, these charges could have a negative effect on many other Texans across the state, some of whom are already facing soaring energy bills.” Vinnie Campo, General Manager, Bulb US

What if your REP goes under?

VREPs must charge these new customers the competitive market rates in month-to-month variable plans. For example, if you were a Griddy customer and you were switched to Reliant as a VREP, your rate would be about 11.6 cents a KW.

According to Reliant, each VREP has told the Public Utility Commission of Texas how many customers they can take on from REPs that fail. After they have filled all of those customer spaces, then customers would roll over to POLRs, when there is no more room on lower-priced plans.


About the Authors:

Passionate consumer advocate, mom of 3, addicted to coffee, hairspray and pastries.