National Power Scandal Haulted by Aggressive Consumers

Recently National Power Company out of Houston Texas sent out a notice to possibly all of their electric customers who signed an electric contract during a monthly term that was contrary to corresponding natural gas futures prices NPC gambles against in order to make potentially more profit. This notice is mandatory to be sent out if a Texas electric company decides to raise Texas power rates on their customers. So the PUCT sent out the mandatory letter letting most of Nation Power customers know their rate of 11- 12 cents kWh will be raised to 15 cents kWh. This may sound normal for those that sign up on those variable electric rate plans that fluctuate up and down with the market but these National Power customers signed a fixed electric agreement, some for 12 months and longer. This notice of change in price all happened around the middle of May 2008 and we quickly saw a few thousand National Power customers hit a few consumer sites to post their experience on the phone with both NPC and the PUCT (Public Utility Commission of Texas) regarding this bait and switch on their National Power electric price.

Consumer Fight Back Against NPC and Broken Contract

Beyond just the PUCT and calling National Power many NPC customers posted negative comments on consumer blogs, news sites and were even calling a host of news organizations. The problem fueled an increasing fight over the next few days from May 9 - May 15 2008 against National Power with some customers calling for a boycott of NPC. A handful of electric providers do this practice of locking people into a fixed contract, not hedging the energy they sold, and then when fuel prices skyrocket, passing this cost on to the customer by breaking the contract and raising the customers electric rate. Some electric companies who first started this practice are Tara Energy, TriEagle, and Cirro Energy. Tara Energy is the first electric company in Texas we know of that some would say wrote the book on breaking customers fixed electric rate contracts based on multiple customers of theirs who had their commercial fixed energy agreement prices raised on them in the middle of their term commitment. The PUCT investigated Tara Energy and sided with Tara over their customers back in 2002. Tara is still under litigation by the Greater Houston Retailer Association, Inc. and as far as we know the verdict is still out (Cause no 2006-45366, 157th Judicial Court of Harris County, Texas). Tara also was in litigation with Gordon Swanson Properties Case 34635-1 as well as multiple other cases (33936, 33937, 34648, and 35049. You can read the complaint by Gordon Swanson Properties here: Tara Energy Complaint You can read Tara Energy’s old Terms of Service here: Tara Energy Terms of Service Most of these complaints against Tara Energy were mysteriously dismissed after a lengthy bit of litigation at the Public Utility Commission of Texas to allow for resources and time to go towards settlement arrangements. Tara Energy’s lawyers seems to have put up quite a fight with those who have complained against them for raising their fixed electric rate agreement. A look at a few of the lawsuits shows that they usually go on for 6 months to a year and then a settlement is made with the Tara Energy customer and Tara Energy. The dismissals do not show what the settlement arrangements were between Tara and their customers but you can probably imagine.

Note to Tara Energy and to Texas Electric Customers

If Tara Energy has information to clear up anything that we may have written incorrectly please feel free to enlighten us to what we have mistated, misquoted. You can leave a comment below and we would be glad to correct any mistakes. One reason we have determined for the hardship with fighting a broken fixed commercial energy agreement in Texas is the fact that consumer protection laws are created primarily for residential customers (The little guy). When it comes to a Texas commercial energy contract you are pretty much in a buyer beware market. If fixed electric rates can be changed and broken at will it really hurts the whole commercial energy industry. Not all electric providers raise their fixed energy prices when they promise you a rate. Usually a fixed electric rate is fixed and will not change. A law that has been used succesfully to fight back when an electric company breaks a fixed electric agreement is the “Deceptive Trade Practices Act”. The Attorney General of Texas would love to hear about any bait and switch energy agreements you may have been lured into. If you were with an electric company that broke your fixed electric rate you signed and agreed to you can file a complaint online with the Attorney General of Texas here: Complaint Form

If you have signed a contract with Tara Energy, or any of the other electric providers we have mentioned we do not recommend that you cancel your contract. You will need to make your complaints to the proper authorities if you feel you have been wronged but please do not break your energy agreement. We do not condone, request, or encourage you to break an energy agreement.

Potential Trend in Broken Fixed Electric Agreements

Some new companies as of 2008 that have broken their customer energy agreements or indicate they might have been with National Power Company, Riverway Power, and some are now saying that YEP (Your Energy Provider) has a clause in their contract allowing for them to raise their fixed rate as well. The PUCT requires that any energy provider that raises their fixed electric rate send a 45 day notice to their customers of the change in the rate. This gives the customer the time to investigate the matter and for the PUCT to make sure the rate change is allowed. Because of the recent uproar to the PUCT by NC consumers, National Power Company, Federal Trade Commission, Attorney General of Texas (Gregg Abbot) and a few other consumer organizations consumers have won with National Power Company. NPC decided to rescend their Texas electric rate change and honor their electric customers fixed rate contract. At this point we don’t know if this was the decision of NPC or of the PUCT requiring NPC to honor the rate but we assume they will be eating any potential profits for some time now. The state of Texas Power To Choose website has removed both Riverway Power and National Power Company from their comparison site. There is no indication as when they will include these providers energy rates back on the site.

Internet Used as a Consumer Forum to Engage Fraudalent Companies

The web is increasingly being used as a tool for consumers to fight back against unfair trade practices and it appears to have worked this time with National Power. Texas consumers are facing higher and higher electric rates because of higher fuel costs. If a Texas electric customer wants to insure they have an affordable energy fixed rate that will not change it is important to know whether or not the electric company selling you an electric rate is hedging their energy so that if their are fuel increases they have already insured that their profit margin, costs, and risk are not hindered and that the consumer does not end up footing the bill. Fixed electric contracts are more expensive because the electric provider has to put up additional capital to hedge the energy they sell but it also provides insurance and peace of mind that your electric rate will remain the same for the entire length of the contract. One company in particular that maintains a competitive and affordable energy rate while offering accurate billing, good customer service, and a reputable track record is a Texas electric provider by the name of Champion Energy. Champion Energy is our suggestion for a quality energy company in Texas that does not jack around with hidden fees, false promises, or insufficient capital to properly hedge their energy.