Power to choose: Here's what Lubbock consumers should know as electric providers enter open market

Starting this week, the electric market officially opens in Lubbock, leaving many life-long residents with questions on how they can start the process.

Two experts, one from a customer advocacy group and another official from Lubbock, took the time to answer some of the biggest questions, including what to look for and how to get help.

Stephanie Mace, the associate state director of advocacy and outreach for AARP Texas, answered several questions about how people can make the right decision for their household. Matt Rose, public affairs and government relations manager for Lubbock Power & Light, also gave further insight on upcoming transition to the open market. Lubbock's transition from the Southwest Power Pool to Texas' ERCOT grid was a decision that was more than a decade in the making, and has come in phases. A portion of the city shifted to the ERCOT grid in early 2021, although LP&L continued to serve as the sole power provider during that interim period.

LP&L will continue to be responsible for long-term maintenance and will continue to own transmission lines, in which it will receive a "rate of return" revenue from every provider that uses them, the A-J previously reported.

Related: Competitive electric shopping window to open Jan. 2024, LP&L says

When does the electric market open in Lubbock?

The market will open on Jan. 5, and the shopping window will end on Feb. 15.

When will people receive their last LP&L bill?

The final bill from LP&L will be issued in March. The first bill from the new provider will arrive after a 30-day billing cycle.

People will still receive a bill from the city utilities office for other utilities, such as water, storm water and solid waste.

What happens to customers' LP&L deposit?

In 2015, LP&L enacted a policy where customers' deposits would automatically be returned to them after a year of consistent payments. That was returned in the form of a credit on customers' bills.

People who have not had that credit refund yet will receive it on their final bill from LP&L.

What happens if a Lubbock resident does not choose an electric provider? Can they stay with LP&L?

Everyone in LP&L's area must choose a provider, and cannot stay with LP&L. If a customer does not choose, they will be randomly assigned one of three providers - Octopus, Reliant or TXU. Those three providers were blindly selected by a committee.

If a customer does not choose, the customer will be placed with one of the three providers for a 90-day term. The assigned provider is required to offer mid-market rates.

During that 90-day period, customers can choose a different provider at any time. If they don't pick another provider, they can be rolled into a plan with the assigned provider.

"They will not be left in the dark," Rose said. "This is a way to make sure that everybody makes it across the line, and nobody falls through the cracks."

Customers with the South Plains Electric Cooperative do not need to choose a provider.

More: LP&L clears hurdle to move remaining customers into ERCOT in 2023

How can people research electric providers and compare plans?

"It is very nerve-racking and overwhelming to have to start researching your options and having to pick an electricity provider," Mace said. "It's important to find some time to put toward researching."

Rose suggested that everyone begin their research by visiting lpandl.com. The site has instructional videos, documents that detail what to look for, and a frequently asked questions section.

"Every single thing that you need in order to make this choice, come January fifth, has been and is currently listed on our website," Rose said.

Mace and Rose both offered powertochoose.org as another researching site. The website details companies, plans, fees and contact information for all providers. The site also allows people to filter results through various criteria, including:

• Contract length.

• Variable rate, which changes by usage, or fixed-rate, which locks in one rate for the contract length.

• If customers must hit a minimum usage, otherwise they will be charged more.

• Renewable energy power.

"The main thing that you're going to want to look for first, before you start (the choosing) process, is to look at your own personal usage," Rose said.

People can view how much they use through LP&L. Customers should look at their bills from the past year to determine their average. The typical customer averages 1,000 kilowatt hours per month.

"We see that on average, our residential customers used about 700 kilowatt hours from October until May, then we see our customers use about 1,400 in the summer months," Rose said. "Today, our rate is around $0.132 per kilowatt hour for our standard residential customer."

That rate has fluctuated between $0.11 and $0.169 within the past 24 months. Rose said people should look for a rate within that range.

Mace, who is a homeowner, said that using an energy broker is helpful for people who find the process overwhelming. An energy broker is paid a monthly rate to handle customers' contracts, including comparing plans and securing rates.

For people who want to visit with electricity provider officials, the city will host several shopping fairs. Providers will be present to explain plans and help people get signed up.

How should people choose their electric provider? Fixed rate vs variable rate, hidden fees and other factors to consider.

"This process is more than just trying to find who offers the lowest rate," Rose said. "The goal is to try to find a plan that you can lock in, and has an acceptable rate for the electricity, and has other customer service features."

Those features could include:

• A phone application.

• Customer service available in Lubbock.

• An easily understandable website.

• Bill assistance if a customer falls behind.

• Special energy days off.

• Using more power from renewable resources.

"Some of these companies that are going to be the low cost providers have very low customer service rankings," Rose said. "If you are somebody who values that, you're going to want to look for a company that has some customer service features."

Mace warned shoppers to watch out for hidden fees. Some plans require customers to use a certain amount of power, and if the customer does not meet that threshold, they will be charged more for not meeting the minimum.

"Definitely read the fine print before you lock in your rate, before you sign the contract," Mace said.

Additional contract items to watch for include if the provider will require customers to use automatic pay or only receive email communications. If a customer does not notice this requirement, and chooses not to do them, they could have to pay more per month. Other fees could include a deposit in order to start service.

On the topic of fixed rates versus variable rates, Mace explained that variable rates are how people ended up with expensive bills after Winter Storm Uri.

"The PUC (Public Utility Council) increased the prices up to like $9,000 per kilowatt hours (during the storm)," Mace said. "So those that were on a variable rate, they saw their bill skyrocket up that month. Keeping a fixed rate allows you to lock in a rate, which is key when we're seeing more of these kinds of extreme weather."

How are electricity rates calculated?

An electricity rate, according to Mace, can use several factors. Common factors include the cost of the energy provider's service and ERCOT.

"That's why you'll see the different changes in the rate, because it's really calculating based on some kind of predetermined monthly fees or distribution fees," Mace said. "Then it is determined based on an estimated usage."

What should renters do during the electric open market?

This depends on whose name appears on the LP&L bill. If the renter's name is on the bill, the renter will need to choose a provider. If the property owner's name is on it, the owner will need to choose the new provider.

For renters who will be shopping for a provider, make sure the provider's plan fits the timeline of your lease. This advice also applies to people who plan to move residences.

"Some plans will charge you if you're needing to break your contract," Mace said.

How can people file a complaint against a provider, or seek assistance?

"If someone has questions, or a complaint, there are some great consumer protection places for people to go to," Mace said.

People can file a complaint against a provider with the Public Utility Commission of Texas' Consumer Protection Division. The division, which is based in Austin, can be reached at puc.texas.gov. People can call the assistance hotlines at 888-782-8477 or 512-936-7120.

The division also assists with telephone and water utility complaints and concerns.

The Office of Public Utility Counsel is able to assist residential customers who have received high electricity bills and customers who may have concerns. The office can be reached at opuc.texas.gov, 512-936-7500 for the Austin office, or 877-839-0363.

Mace also said people should reach out to their state legislators if they have concerns with the Public Utility Commission.

This article originally appeared on Lubbock Avalanche-Journal: Lubbock electric market opens soon, here's how to choose a provider