January 18, 2023

Controversy Around PM's "Always On" Practice for Electricity Service

By
Team Nutiliti

The Public Utility Commission (PUC) of Texas is taking a hard look at the "always on" practice of property management companies, particularly FirstKey Homes and Texas Excel Property Management.

As a reminder, the Public Utility Regulatory Act and the PUC’s substantive rules require that tenants occupying an individually metered unit – whether in a multifamily complex or a single family rental – must have electric service provided in the tenant’s name unless the electric service is provided as an incidence of tenancy. Furthermore, a tenant may not be obligated to use any specific retail electric provider. Residents of Texas in competitive choice areas are guaranteed the right to choose their own retail electric provider.”

In FirstKey Home's case involves a former tenant, Arnulfo Araguz Jr., who rented a home from FirstKey and received electric service through TXU Energy Retail Company LLC as part of a contract that FirstKey had made with TXU. His complaint includes FirstKey's statements that the company managed his electric account and chose his electric provider for him.

New tenants like Arnulfo were being billed for TXU Energy's services that were in FirstKey Home's name and were not allowed to shop around for their own provider - something which the PUC is now trying to ensure does not happen in the future.

In the Texas Excel Property Management case the PUC received information regarding eight different apartment complexes operated by Texas Excel that appeared to require tenants of individually metered apartments to maintain electric service in the complex's name. Following that, the Texas Public Utility Commission launched a formal investigation of Texas Excel Property Management Corporation (Texas Excel) for possible violations of PURA and Commission rules, regarding potential violations related to the denial of tenants' rights to choose a retail electric provider in areas of the state in which retail customer choice has been introduced, as well as the unauthorized resale of electricity.

Barksdale English, Division Director of Compliance and Enforcement provided some additional commentary in regards to the investigation and noted:

“It's also serving a little bit as a notice to the public at large that there seems to be a business model that might be taking root in the state where property management companies that are leasing out either single family homes or apartment units that are separately metered are requiring their tenants to use the retail electric provider that the property management company selects for them."

The PUC is making sure tenants have freedom of choice when it comes to electricity providers, so they can find an option that is affordable without having it chosen for them by a third-party. It remains to be seen how this investigation will pan out, but it has certainly been brought up as an important regulatory concern when it comes to electricity services in Texas."

If you're interested in learning more about Nutiliti's Energy Choice platform for property managers - please reach out. See here for more detail.

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