Powering Down
June 5th, 2008 at 5:28 pm
We’re now up to three power companies in a month that have bitten the dust in Texas’ Wild West deregulated electricity industry. Over 26,000 customers have been transferred to “providers of last resort,” a desperate-sounding regulatory term for companies that provide power to consumers left in the lurch. Last-resort companies charge rates as high as 30 cents per kilowatt-hour, more than triple the rates consumers pay in Austin and San Antonio, where the utilities are city-owned.
The most recent casualty is Decatur-based E-tricity (aka HWY 3 MPH LLC), which had been in business only a little more than a year. In the face of spiking energy prices, the retailer failed to maintain its financial obligations and the state had to pull the plug. The Internet is now awash with former E-tricity customers looking for answers.
Businesses come and go all the time, but the Public Utility Commission has set the bar very low for entry into the already-crowded retail electric market. Basically, all you need is $100,000 in the bank and an office somewhere. Apparently, HWY 3 struggled to even achieve that threshold. In 2007, the PUC rejected the company’s application because the financial requirements posted by HWY 3 were personal in nature and “primarily invested in retirement and educational savings accounts.” (Using your retirement kitty and kid’s college fund as collateral to start a business – now that’s some brass balls!)
The PUC gave HWY 3 more time to scrounge in the couch, eventually approving the company’s application in March 2007.
According to state filings, the company’s principles include one Marla J. Hanley. Incidentally, Hanley was also involved in another tainted outfit operating in another deregulated industry, this time telecommunications. Houston-based Choctaw Communications, d/b/a Smoke Signal Communications, sold local phone services around the nation, including Texas.
In Georgia, Choctaw – along with 13 other companies – lost its license in 2003 after an investigation found that the company had not set aside required refund accounts. In Oklahoma, the attorney general filed suit against Choctaw for not turning state-mandated 911 fees over to the state. In California, a consumer group accused Choctaw of “gouging” low-income customers and failing to offer assistance to deaf and disabled customers. In 2001, former CHiPS actor Erik Estrada sued Choctaw for $1.5 million, claiming the company continued to use his likeness after an endorsement deal had been terminated. Choctaw went out of business in Texas in 2003.
The Observer left a message for Hanley at her office. We will post a response when she returns the call.
