PUCT to Consider Proper Disclosure for Teaser Rates

April 15, 2011
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PUCT Commissioners will consider the treatment of teaser rates for retail electric products at a future open meeting, after Commissioner Donna Nelson raised concerns with whether current disclosure requirements are sufficient.

Nelson's concerns were prompted by a variable priced offer from First Choose Power currently listed on the Power to Choose chart at 0 cents per kilowatt-hour, as First Choice will provide the customer's first month of usage free of charge. The associated Electricity Facts Label linked through Power to Choose lists the current variable rate for the product (at 1,000 kWh usage) as 10.3 cents at Oncor and 12.1 cents at CenterPoint.

Nelson was unsure whether the current Sustentative Rules would need to be further amended, or whether the disclosure concerns can be addressed solely through changes to how prices are listed on Power to Choose. As noted, the EFL for the product does list what the actual rate per kWh for the first month of service would be, were First Choice Power not providing service in the initial billing period free of charge. Only on the Power to Choose price listing does the rate appear as 0.

Nelson, as well as Commissioner Kenneth Anderson, stressed that they do not have any issue with the offering of teaser rates, but want to ensure that there is adequate disclosure of the underlying rate.

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