What if the government decided one day you may only purchase groceries from one grocery store chosen by the government unless you notified the government that you wanted to chose your own grocery provider?
And what if everyone not opting out" of such an imposed program would be forced to use the government-chosen one-size-fits-all grocery plan like it or not?
While most would surmise this as being an unfair and hideous consideration it is the precise situation being proposed by State Representative and Chairman of the House Energy Resources Committee Jim Keffer (R-Eastland) in House Bill 2780. The identical (companion) bill in the Senate is SB 1481 by Senator Wendy Davis (D-Ft. Worth).
The concept and practice likely remembered by most Texans from previous telephone debates known as slamming" will receive a hearing today April 8 2009 in the House Energy Resources Committee.
Here is how the Keffer-Davis plan would works should it be passed and be signed into law by Governor Rick Perry.
If the residents of city vote to opt-out of their current or existing utility set-up a city or county government is given the authority to negotiate with an electric company on behalf of their citizens to provide service in the future. All customers currently not on a contract with an energy provider would be forced to take service from the provider chosen by the city government unless they send an opt-out" notice to the government within a short timeframe probably 30-60 days.
Current law already allows citizens of a municipality to sign up with a municipal provider-aggregator if they believe the aggregator offers better prices and services but under the Keffer-Davis plan Texas residents will automatically be switched from their current utility company to the provider chosen by the city or county without the customers consent.
When this happened in the telecommunications sector in the late 1990s it was called slamming" the unauthorized switch of a customers telecommunications provider. First service is transferred and if a customer does not go through the often difficult process of opting-out" they are automatically left with a new city chosen provider.
Back in the 90s law enforcement officials caught perpetrators of telecommunications slamming and literally sent them to prison.
The Cities Aggregation Power Project or CAPP is a coalition of more than 100 Texas cities and political subdivisions that are lobbying for the bills and process. CAPP is chaired by Jay Doegey with the City of Arlington.
As specified in the bills the intent is to call for elections to force a government-selected electricity provider on local residents under the promise of cheaper electric rates in the future.
The coalition claims the deregulation of the electric market has contributed to spiraling electricity prices abuses in the wholesale power market and reduced profits for businesses. The Lloyd Gosselink law firm in Austin is representing the coalition as well as numerous other municipalities around the state involved with the Texas Municipal League (TML).
The Texas Municipal League has a historical record of opposing appraisal tax limitations or reforms and usually advocates for increases to sales and property taxes.
Opponents of the opt-out municipal aggregation" plan point to examples in other areas of the country where the idea has produced unsuccessful results.
In Ohio hundreds of thousands of electric customers have been put into higher priced service providers selected not by the customers but by their local cities after aggregators failed to deliver on promised rate savings and competition was frustrated by failed aggregation promises.
Peggy Venable of Americans for Prosperity says We strongly oppose the opt-out provision but also have grave concerns about cities having the ability to aggregate using taxpayer dollars to promote their plan. Tax dollars should not be used to compete with the private sector.
She adds This isnt the appropriate role of government. One CAPP city is Odessa and consumers there have as many as 54 different plans to choose from now. This legislation isnt needed and undercuts free market principles."
Proponents say the measure is meant to cover Texans who havent chosen" a power provider. In reality however most customers remain with the same company for years essentially choosing" to stay with their utility provider because of satisfactory service. Customers are not required" to signed utility contract they simply vote with their business allegiance and have chosen" to remain with the same company.
Under the CAPP aggregation plan customers would lose out on savings they currently chose" or have negotiated. Under the Keffer-Davis legislation customers including businesses lose that power or service provider decision-making authority as it is mandated over to their city government.
Furthermore many Texas customers who have chosen a new energy provider may not actually have a contract" with that supplier. These customers apparently could also be slammed because they dont have a formal contract.
Keffer says his bill would allow customers access to lower electric rates. Opponents point to currently existing competition for customers saying its hard to imagine rates would fall further under government induced slamming.
The authority to negotiate for other customers means big money for the governments involved. And opponents readily argue slamming" would be another way for cities to raise money for expensive facilities and amenities for other local government projects.
The policy of opt-out municipal aggregation has been considered and rejected every regular legislative session since 1999.
