Frequently Asked Questions
1. What is electricity deregulation?
Deregulation is a new system under which one power company no longer has exclusive rights to serve a specific geographic region in Texas. Instead, various electric companies are free to compete for consumers’ power services at prices they set.
2. When did deregulation begin in Texas?
Texas first started deregulating the wholesale market in 1995 and didn't fully open the retail market until January 2002.
3. What is the PUCT (Public Utility Commission of Texas)?
The state agency which regulates electric and telecommunications service. The PUCT regulates the delivery of electricity and enforces customer protections.
4. What is ERCOT (Electric Reliability Council of Texas)?
It is a private (non-profit) industry group that monitors electric energy supply in the state. It oversees the state's power grid and a variety of behind-the-scene operations required for deregulation. ERCOT is overseen by the PUCT.
5. Does electricity deregulation in Texas have to answer to several overlapping government agencies?
In the 1960s, Texas utilities officials avoided ties with other state's power grids so they wouldn't be subject to oversight by the federal agency now known as the Federal Energy Regulatory Commission.
6. What are some of the key advantages that electricity deregulation has over the deregulation of the telecom industry?
The energy industry has leveraged the lessons-learned from the deregulation of the telecommunications industry enabled by the Telecommunications Act of 1996. Given this hindsight Texas has approached deregulation of the electric energy industry in a precise fashion to enable competition for the elements of the energy supply chain which are advantaged by competition (i.e. generation and retail sales) and controlling those elements which lend themselves to continued regulation in the best interests of the public (i.e. transport & distribution via existing power grid).
7. What is a Retail Electric Provider (REP)?
A Retail Electric Provider or "REP" is an entity certified by the Texas Public Utility Commission to sell electricity to retail customers. A retail electric provider may not own or operate generation assets.
8. Do Retail Electric Providers own the transmission systems?
No, wires companies own the transmission systems. Incumbent investor owned electric utilities like TXU were required to split into two companies. In the case of TXU, Oncor is the wires company that owns and operates the transmission and distribution systems, while TXU Energy provides retail sales and services.
9. How does the new competition law protect the environment?
Requires "grandfathered" power plants (those that predate the 1971 Texas Clean Air Act) to reduce nitrogen-oxide emissions by at least 50% and sulfur dioxide by 25% before May 1, 2003.
Encourages upgrade or retirement of older power plants to meet emissions standards by allowing utilities to recoup the costs of retrofitting or retiring certain older power plants; Provides incentives for energy efficiency programs that will result in less production of electricity, and requires retail electric providers to buy an additional combined 2,000 megawatts of Texas renewable generation capacity statewide by January 2009, from sources that include wind, solar, hydroelectric, biomass or geothermal.
10. What happens if I want to switch back to my old provider?
You are free to do so. However, the retail electric provider may charge a fee.
11. What is an aggregator?
An aggregator is a buyer’s agent. Aggregators combine the power requirements for many consumers to create a buying group and negotiate service contracts with a retail electric provider on the group’s behalf. Because of the volume, the Aggregator is generally able to secure lower prices and better contract terms.
12. Why should you use an aggregator instead of a retail electric provider?
Because you gain the benefits derived through volume purchasing power.
13. How much will I be charged for Community Energy’s aggregation services?
Nothing. Community Energy is compensated by the Retail Electric Provider. The fee is typically 3% of the negotiated commodity rate and is disclosed in the service agreement you will receive from the REP.
14. Is it difficult to switch to Community Energy?
Not at all. Just fax us the Authorization Form so we can provide you with an estimate of your savings. If you like what you see, then we will be pleased to include you in our buying group and act as your agent.
15. Do you provide a satisfaction guaranteed?
If we are unable to negotiate a contract that saves you at least 10% on the commodity portion of the rate, then we will not enter into a service contract on your behalf. You will still be free to select an electricity provider of your own choosing.
16. What is the Electricity Facts Label?
An information sheet that provides customers with information on a REP's prices, contracts, sources of power generation and emissions, to allow customers to make apples-to-apples comparisons of offers.
17. Will I be required to sign a contract?
If you choose Community Energy to act as your agent in negotiating a service contract with a Retail Electric Provider, you will be asked to sign an aggregation agreement with Community Energy and be bound by the terms of the supply agreement negotiated with the Retail Electric Provider.
18. Can non-affiliated retail electric providers turn away customers they consider credit risks?
Yes, and they can also require deposits.
19. What happens if I switch to a new provider and I find another company with a better deal?
You are free to switch to that company. However, you may be liable for any early termination payment required by the selected retail electric provider and for any additional costs incurred by Community Energy L.P. and the other members of the buying group as a result of your early termination.
20. If I live in an apartment, can I select a new provider?
If you currently pay your own electricity bill, you can.
21. What is the Price to Beat?
The rates affiliated retail electric providers are required to charge residential and small commercial customers during the price to beat period. All residential consumers and non-residential consumers with a peak demand less than or equal to 1,000 kW are eligible for the price to beat.
22. How is the "Price to Beat" set?
The Texas Public Utility Commission sets the Price to Beat using a complex formula that separates a provider's cost into various pots, including those known as the "base" portion and those that reflect the cost of fuel.
23. How long will affiliated retail electric providers like TXU or Reliant have to offer the "Price to Beat"?
An affiliated retail electric provider can't cut the base portion of the "Price to Beat" for three years or until it loses 40% of its customers. It can be adjusted for changes in fuel or power price costs twice a year. An affiliated retail electric provider can't raise the base portion for 5 years.
24. Does TXU Energy have to offer the "Price to Beat" to anyone who wants to sign up?
Yes, TXU Energy must offer the "Price to Beat" to all residential and non-residential consumers with a peak demand less than or equal to 1,000 kW. It can't turn away consumers with bad credit histories, but it can require deposits. It won't charge a customer sign-up fee.
25. What is Fuel Factor?
An electric utility is allowed to recover its costs for the fuel used to generate electricity such as coal, natural gas, wind, water, nuclear, etc. through the fuel factor. This cost is set by the PUCT and is charged on each customer's bill based on kilowatt-hour usage. A utility is prohibited from making a profit on the fuel costs.
26. What is Unbundling?
The separating of the total process of electric power services from generation to metering----into its component parts for the purpose of separate pricing or service offerings.
27. Can my new provider disconnect me if I don't pay?
If you are a commercial customer with a peak demand less than 1 megawatt, your new provider may not disconnect your service for non-payment. However, they may transfer you to the provider of last resort, which can require a deposit or advance payment for service. If you don't pay your bills to the provider of last resort, you can be disconnected. If you are a commercial customer with a peak demand greater than 1 megawatt, your new provider may disconnect your service for non-payment if you do not make the appropriate payment by the disconnect date stated in the disconnect notice they send to you.
28. How can I get an apples-to-apples comparison of competing offers?
Request something from providers called an electricity facts label. It will contain average per-kilowatt-hour rates for several levels of typical monthly power usages.
29. Will there be Billing Options?
Options to help manage cash flows and enhance financial performance, such as Choose Your Own Bill Date and Summary Billing.
30. Who will I receive my bill from?
Your bill will come from the REP that has responded with the best service package for our buying group. You will also receive periodic statements from Community Energy L.P. informing you of your savings, rebate earned, and donations to Community Energy Foundation.
31. Will I receive a separate bill from the wires companies?
No. They will charge the REP. The REP, in turn, will pass those transmission costs on to consumers as part of their monthly bills. The Texas Public Utility Commission will continue setting rates for electricity transmission.
32. What are some of the rights to cancel?
Once Community Energy L.P. signs a supply agreement on your behalf with a retail electric provider, you will be sent the terms of agreement. You can cancel your contract within 3 days of receiving the contract without any penalty if you change your mind.
You can cancel your agreement without penalty if you move.
You also have a right to get out of any contract without penalty if the provider changes the terms of the contract.
Companies do not have to inform you of rate increases if those rates are indexed in the contract, so read the contract carefully.
33. What is Slamming?
Slamming occurs when the electric service provider switches a customer without their approval.
34. Will it be possible for consumers to get transferred to a new provider without their permission?
It is not supposed to. So-called slamming is illegal. Before your service is switched, you will get a notice in the mail that a request has been received to switch your service. If you don't want to switch, the notice will give you a number to call to cancel it.
35. What is Cramming?
Adding charges to a bill without a customer's approval.
36. What happens if my electric company goes out of business?
You should get enough advance notice so you have time to shop for another provider. If you don't have enough time, your lights won't go out. You would be rolled over to a company offering provider-of-last resort service.
37. What happens if my lights go out?
You would still call your REP for service calls. Remember, Community Energy has purchased your power in bulk on behalf of you and other Community Energy members in your area.
38. Who will I call if there's an outage?
That depends on your retail provider, which is required to tell you how to report an outage. The number you should call will be on your bill.
39. Who is responsible for handling power outage problems?
Wires companies, not your retail electric provider.
40. If I switch, will I be given a lower priority if there is a power outage?
No. The job of restoring service after a power outage will remain the responsibility of the local wires company. The local wires company must respond to all reported outages on a non-preferential basis. To ensure this happens, the local wires company will continue to be regulated by the Public Utility Commission of Texas (PUCT), and the PUCT will ensure that all customers receive the same level of services as they have always received. In most cases, the service technician will not even know who the electric provider is for a particular location.
Common Questions about power?
41. What is the electricity grid?
The layout of an electrical distribution system.
42. What is Kilowatt (kW)?
One thousand watts. A standard measure of demand for power or capacity.
43. What is Kilowatt-hour (kWh)?
The standard unit of measure for electric energy. One kilowatt-hour is one kilowatt of electricity supplied for one hour.
44. What is a Megawatt (MW)?
One thousand kilowatts or One Million watts. One megawatt is enough energy to power about 1,000 homes.
45. What is Renewable Energy?
Electricity that is made from environmentally friendly fuel resources----such as wind, water, organic waste or solar. Sometimes called "green" energy.
46. How much of a provider's electricity will come from alternative sources such as wind?
That depends on the provider. Each provider is obligated under state law and PUC rules to have at least some portion of renewable resources in their portfolio of power. Provider's electricity facts labels will contain information about their sources of power.
The Community Energy Foundation
47. What is the Community Energy Foundation?
The Community Energy Foundation is a tax-exempt 501(c)(3) organization, and is the charitable organization that will receive the portion of each customers rebate that is directed to charity. Customers will be able to make nonbinding recommendations to the Foundation that all or a portion of their contribution to the foundation be distributed to other qualifying charities. The Foundation will provide regular reports of grants made from the contributions of Community Energy L.P. customers.
The foundation is the cornerstone of the value Community Energy L.P. brings to the neighborhood’s we serve, and distinguishes our mission to give something back to the community we live
48. What is the benefit of the Foundation?
Community Energy’s mission is to provide a great electric energy service to our customers, while supporting the communities we serve. The Foundation provides Community Energy L.P.'s customers the ability to direct a portion of their electricity cost savings to charity. The Foundation also thoroughly evaluates each recommended grantee which saves you time gathering information about the charity yourself.
49. How do I donate money to charity?
The Foundation will set up an account, accessible via Community Energy L.P.'s home page, where you will be able to track the charitable donations you have made to the Foundation. You will also be able to track grants that have been made from your contributions to the Foundation.
50. May I influence who receives grants from the Foundation?
Yes. The Foundation will identify specific local charities, including school foundations, churches, hospitals, The American Red Cross, or other organizations to whom it will make grants. You may select from the list those charities that you would like to receive grants and the size of the grant you recommend. The Foundation will review the historical stewardship record for each charity and the recommendations of its donors prior to making any grants. If there is a charity that is not on the list that you would like to see considered, you may recommend that the charity be added to the list.