Consumer Protection in the Texas Retail Power Market, Part 2

Michael Giberson

The Dallas Morning News is back with the second half of its investigative report into consumer protection problems in the Texas retail power marketIn this article the DMN focuses on the owner of Freedom Power, one company serving the prepaid power segment of the Texas retail market. (Yesterday I commented on part one of the story.)

The story reveals that Ken Weaver, when he became the owner of Freedom Power, lied about his past on state licensing documents.  Among the problems: failing to disclose his felony record and prison time, claiming college degrees he didn’t earn, and reporting a three-sport varsity career as an undergrad.  State officials said that the felony convictions may not have disqualified Weaver from receiving a license (though presumably extensive lying on the licensing application is a problem).  The story suggests, reasonably I might add, that any checking into the background of potential licensees would have revealed the deceptions.

Of course just because Weaver lied to state licensing officials doesn’t make the company he bought a bad apple, right?  Well, the DMN reported:

For some, the consequences were painful.

Weaver’s Freedom Power developed a track record of cutting power to customers in midsummer, despite a state-imposed moratorium on cutoffs during a heat emergency. It also compiled the highest rate of consumer complaints in Texas and one of the highest rates of rule violations of any electricity provider in the state.

The Public Utility Commission, which is supposed to protect consumers in the deregulated market, ultimately fined Weaver’s company $21,050 for a few electrical cutoffs. But it took no other action even after The Dallas Morning News informed it of Weaver’s criminal history and false statements his company made in filings to the commission.

I don’t know whether the $21,000 fine is comparable to fines assessed to other companies with similar violations, if any, but this story is pretty thin on actual consumer harm.  The single consumer harm mentioned is the midsummer loss of power during a state-imposed moratorium on cutoffs. (Yesterday I commented on the likely consequences for prepaid customer rates of forcing retailers to be charities during emergencies.)

Yes, Weaver lied on his licensing application and generally seems to mix business with a great deal of self-promoting fiction, and his fast-and-loose play with the facts may be tied to those record-setting number of consumer complaints, but the story does not document that connection. After reading the article, I wouldn’t trust Weaver with my money nor would I sign up as a customer to one of his businesses, but it doesn’t look like he set out to defraud his consumers.  Instead, it looks like he has tried to run a business.

Despite the evidence, in both the first and second half of the report, of problems in licensing review and weak efforts put into consumer protection at the PUC of Texas, the reporters came up with little direct evidence of harm to consumers due to these problems.

2 thoughts on “Consumer Protection in the Texas Retail Power Market, Part 2

  1. Sure, the article does not seem to show significant harm to consumers, but it does show that the PUC is incompetent when it comes to consumer protection. By failing to look into the claims on the application (or at least to prosecute Mr. Weaver for his lies when they came to light,) the PUC has lost any credibility it might have had as a consumer protection agency.

    From your comments, the reporters have produced strong evidence of lack of adequate policing. Even if Weaver did not do significant harm to consumers, the whole episode undermines the credibility of the consumer watchdog. This, in turn, encourages other would-be abusers of electricity consumers to lie and flout the law without fear of any significant leagal reprimands.

    Consumer protection laws are worthless if would-be abusers do not believe that those laws will be adequately enforced.

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