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Most people in Texas are becoming familiar with how deregulated electricity service works as the state is into year number 6 for Texas deregulation. Prior to 2002 the state of Texas had only 5 different monopoly companies in each region of the electric grid in Texas. These companies were monopolies and a Texas electric consumer could not pick a competitive provider as there was no choice. Now there are about 150 different electric providers in Texas and they are not all reputable or even smart in how they operate their business. The truth is you need about $100,000 and a couple of people to start a Texas retail electric provider. Electric energy is almost a gold rush at times with the way these energy companies have jumped into this state offering multiple electric rate plans, and gorilla marketing efforts at your door step. It is not uncommon to have a van full of people canvas a neighborhood, knocking on doors, and leaving door knob pamphlets touting the latest electric rate plan.

Spark Energy is a Texas energy company known to resort to these gorilla marketing methods and it has worked for them. This particular provider has had a bad reputation in their past but have cleaned up their act since they started in 2002. The energy company has grown to be one of the largest providers in Texas and because of their strong expertise in the natural gas trading sector have been able to compete with some of the larger electric companies like TXU Energy and Reliant Energy. Several years ago Spark would inflate their pole and wires charges and decrease their part of the energy rate to make their price look better. Many customers fell for this and once it was noticed what they were doing they changed their policy. Most people don’t even remember this and there are only a handful of energy companies left that still do this type of thing.

At the start of Texas deregulation we saw a few companies who came into Texas and bought power but did not hedge their energy investment. When fuel costs surged they had no way to protect themselves from going upside down in their investment. Instead of eating the loss in a bad energy investment, these Texas electric companies passed the cost onto the consumer. Tara Energy wrote the book on this in 2002 and caused a large class action lawsuit that is still in the works today as of 2008. TriEagle Energy tried this same tactic in 2003 and they had a harsh ruling and fines imposed by the Public Utility Commission to discourage this type of deceptive trade practice. Most people in the Texas energy industry believed this type of tricky behavior was over after TriEagle’s fine but some energy providers must have failed to do their research.

In 2008, National Power Company and Riverway Power both attempted to pass on their unhedged energy mistake to their customers. This mistake cost them dearly as the PUCT (Public Utility Commission of Texas), consumers, legislators, news columnists, and angry consumers were immediately hot on pursuit to, ban, boycott, sue, and lash out in any and all ways to make sure these electric providers did not succeed. The internet and news backlash worked as both companies had to eat the loss, were taken off the state governments Power To Choose website and had to honor the low 12 month fixed electric rate they originally promised their customers.

The internet is increasingly used as a tool for consumers to patrol the Texas electricity market. Energy providers no longer have an easy time of it when trying to deceive the Texas consumer. If a company does attempt a bait and switch or anything like it, the news could get out and leak across the web as a big scarlet letter A, reminding everyone, this Texas electric company is not to be trusted. For those interested in learning more about consumer news related to Texas Electricity we invite you to visit this site: Texas Electricity