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Houston expert: Texas energy customers deserve transparency

No one should be overpaying for energy, especially as a result of sneaky price hikes that they didn't know about. Photo via Getty Images

As Texas continues to grapple with fallout from Winter Storm Uri and state regulators determine the next steps forward to strengthen the electricity grid, protecting consumers and providing transparency regarding their energy bills must be the top priority.

When you think about it, asking for transparency from energy suppliers in the state is a simple and direct request. Free markets thrive only when customers have full transparency and information. There are large discrepancies, however, between notification requirements when it comes to variable rate products—where energy prices change monthly based on the market, versus fixed-rate energy products—where prices are locked in for a defined amount of time. Often, consumers are presented with variable rates that can be twice as much as the original fixed rates, and more transparency is needed to fix this.

Due to new regulations enacted recently as a result of HB16, suppliers are required to notify residential consumers of any change to their fixed rate plans. The legislation falls short, however, in protecting the larger segment of energy consumers, those who are already on a variable rate plan either because their plan expired in the past or they actively chose variable short-term rates, by not requiring notification of rate change for these variable rates. As a steadfast, customer-focused energy provider, we are encouraging the Public Utilities Commission of Texas to adopt legislation that would require that any customer on a variable rate be notified ahead of time of a change so they can make more informed decisions — a pricing notification that 82 percent of consumers are in favor of.

Why are notifications important? 

Unfortunately, many energy suppliers thrive by remaining opaque and confusing to the very customers who have invested their trust, and hard earned dollars, in them. In fact, many suppliers have crafted entire business models around the idea that customers will forget that they are on variable rate products and take gross advantage by not notifying customers when the rate changes. This is not a good business practice.

In this type of system, energy providers hike up rates and count on their customers to not notice — it is how they make the most money and secure their bottom line, all at the expense of the customer. As a result, energy consumers are potentially overpaying significant amounts for their energy. We have found some customers were paying almost twice our standard rate before they switched to us.

Second, it is incredibly low cost for energy suppliers to provide this basic notification while also extremely high value to customers. It is consumer protection at its core: providing the consumer with necessary information so that they can make informed decisions about their energy.

Transparency by consumer services is the norm

Rather than keeping business as usual, new legislation should be introduced to mandate email or text message notifications well in advance of any rate change on a variable energy product. If a customer is on a monthly variable rate, for example, this means suppliers would be required to send a notification every month before a rate changes, providing consumers with the opportunity to change energy providers or products as they see fit. These notifications on price hikes and slashes are already in demand: The majority of customers (83 percent) have noted that it is important that their energy provider is transparent with rate changes. We are simply advocating that customers want and should be informed. Life is busy. Customers should have all the important information, such as their energy rates, at their fingertips.

Other consumer services that we use every day, including streaming platforms such as Netflix, Hulu and Disney+, regularly provide this information to their customers. When prices increase on these platforms, customers are notified ahead of time via email and can choose whether to continue service at the new rate or cancel. This simple act of consumer transparency, no matter how long a customer has been a subscriber, is simple, effective and shows trustworthiness from the companies. Most importantly, consumers are always informed and are provided the information needed to make a decision that best fits their lifestyle. Despite the energy industry's long history of opaqueness, the same should be the case for energy suppliers and their customers.

New age of innovation and consumer choice

In addition to acting in the best interest of consumers, legislation requiring energy suppliers to provide timely rate updates to customers on variable energy products would also encourage healthy market competition and spur more innovation within the energy industry. Suppliers would be pushed to think more creatively about the types of products they offer their customers, creating even more options for consumers to choose and benefit from.

No one should be overpaying for energy, especially as a result of sneaky price hikes that they didn't know about. While HB16 tries to address this, it doesn't go far enough. Transparency in energy pricing is necessary and simply the right thing to do.

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Michael Lee is the CEO of Octopus Energy. He is based in Houston.

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According to a new report, Rice University's Jones Graduate School of Business has all the ingredients or a top MBA program. Photo courtesy of Rice

Rice University's Jones Graduate School of Business has raked in yet another top spot on an annual list of top MBA programs.

A new ranking from Poets & Quants, which covers news about business schools, puts Rice at No. 3 among the world's best MBA programs for entrepreneurship. That's up from No. 15 on last year's list.

The Olin School of Business at Washington University in St. Louis grabbed the top spot in this year's ranking. Elsewhere in Texas, the University of Texas at Austin's McCombs School of Business lands at No. 14, the Neeley School of Business at Texas Christian University in Fort Worth at No. 35, and the Cox School of Business at Southern Methodist University in University Park at No. 36.

Poets & Quants judged the schools on 16 metrics related to their entrepreneurship initiatives.

Poets & Quants says Rice's Jones Graduate School of Business "itself is less than three decades old. But entrepreneurship was baked into its DNA from the get-go. The late Ed Williams and current professor Al Napier are credited with starting the entrepreneurial focus. But it wasn't until 2013 when Jones plucked Yael Hochberg from Northwestern's Kellogg School of Management that the program really started to surge."

Rice's entrepreneurship offering combines academic courses and associated programs led by the Liu Idea Lab for Innovation and Entrepreneurship (Lilie) with programs offered by the Rice Alliance for Technology and Entrepreneurship.

"The ability to be a student while working on your startup in class, under the expert guidance of our world-class faculty, gives our Rice entrepreneurs a competitive advantage over any others out there," Hochberg, head of the Rice Entrepreneurship Initiative and academic director of the Rice Alliance, says in a news release.

The Rice Alliance's OwlSpark Accelerator supplements the MBA program. The accelerator serves as a capstone program and launchpad for students seeking to start their own businesses. Meanwhile, the Rice Business Plan Competition, the largest intercollegiate student startup competition in the world, lets students pitch their startups in front of more than 300 judges. And the Rice Alliance Technology Venture Forums allows students to showcase their startups to investors and corporations.

"The ability for students to launch their nascent startups, obtain mentoring from members of the Houston entrepreneurial ecosystem, and then pitch to hundreds of angel investors, venture capitalists, and corporations provides a unique opportunity that cannot be found on many campuses or in many regions," says Brad Burke, managing director of the Rice Alliance.

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