The Public Utility Commission praised utility companies during an emergency meeting this week for stepping up to help consumers by suspending disconnections for nonpayment as millions of residents face financial turmoil during the coronavirus pandemic.

But the widespread move to suspend utility disconnections by utilities including CenterPoint Energy, which transmits power to most of the Houston area, is putting financial pressure on retail electric providers that rely on the threat of disconnection to get consumers to pay their overdue bills.

Retail electric providers have to pay their own wholesale power suppliers and pass along the distribution and transmission fees they collect on behalf of utilities. But if enough consumers don’t pay their bills, retail electric providers could find themselves out of business and electricity customers involuntarily moved to high-dollar plans to keep the lights on, one energy expert said.

Many retail electric sellers don’t have much of a financial cushion, existing from one bill cycle to another, said Ed Hirs, an energy economist with the University of Houston. Many also are earning thin profit margins of 2 to 3 percent.

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The disconnection suspensions are scheduled to expire later this week. But it’s likely they could be extended, he said, which could throw the Texas electricity market into turmoil if the fallout continues another 60 to 90 days.

“It won’t take very many nonpayments to send a retail electric provider over the edge,” Hirs said.

Joshua Pesikoff, chief executive officer of Infuse Energy, a midsize retail electric provider based in Houston, said the suspension of disconnections puts his company in a difficult position because it can’t operate if it can’t pay its suppliers.

He suggests it’s time to bring back Lite-Up Texas, the state-run fund that helped low-income residents with their utility bills. The program was funded by utility customers who paid a fraction of a cent per kilowatt hour into a special fund. But it was canceled by the Texas Legislature and ran out of money four years ago.

“It’s a rainy day fund and it’s now raining, but the fund doesn’t exist any more,” said Pesikoff.

The commission said it is working closely with companies to find a suitable solution to the challenges presented by this unprecedented situation.

“We are confident that the dynamic resilience of the competitive market will get Texas through this season of uncertainty,” said commission spokesman Andrew Barlow.

But energy experts are questioning whether it should be utilities making the call to suspend disconnections because utilities in Texas don’t face any financial consequences if they continue providing power to customers who aren’t paying their bills.

“It should be a decision made by retail electric providers,” said Frank Lacey, president of the consulting firm Electric Advisors Consulting in Pennsylvania that represents retail electric providers. “It’s misplaced to leave the decision to utilities.”

The commission asked utilities on Monday to step up after receiving complaints from consumers whose power has been disconnected for not paying their bills during the coronavirus crisis outbreak.

Texas utility rules prohibit retail electric providers from cutting off customers during times of extreme weather but there are no stated exceptions to the rules during times of emergency. Texas Gov. Greg Abbott declared a state of emergency over the coronavirus last week.

Utilities need to address it, commission Chairwoman DeAnn Walker said.

CenterPoint has a commitment to the communities in which it lives and works and is working with the commission and retail electric providers to develop a longer term plan to help customers having difficulty paying their electricity bills, spokeswoman Alicia Dixon said.

The commission also is encouraging retail electric providers to help consumers affected by coronavirus.

TXU Energy, the retail electric provider owned by Vistra Energy of Irving, is waiving late fees and extending payment due dates to customers facing finanical problems because of the coronavirus outbreak.

"The coronavirus is causing uncertainty and many hardships, and during this time, we don't want our customers to worry about their electric bills," TXU president Scott Hudson said. TXU is one of the biggest electricity sellers in Texas.

NRG Energy, the Houston and Princeton, N.J.-based company that owns several retail electricity brands including Reliant Energy, Green Mountain Energy, Cirro Energy and Discount Power, is offering similar accommodations of customers who can't pay their bills on time.

The NRG brands also are pausing payment-related disconnections for residential and small commercial customers.

“Together, we face this unprecedented global health crisis, and we are doing our part by providing additional assistance so our fellow Texans can focus on their health and well-being," said Reliant President Elizabeth Killinger.

Direct Energy, the British-owned power retailer that is the third-largest seller in Texas, has suspended disconnections until April 30 for customers eligible for low-income assistance.

lynn.sixel@chron.com

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