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Breeze Energy, the Dallas-based retail electric company with thousands of customers in Houston, was powered down by Texas regulators after the company defaulted on its financial obligations.
The Electric Reliability Council of Texas, the non-profit group that runs the state’s power grid, notified Breeze Energy’s 9,800 customers in Texas on Wednesday that they would be shifted to other electric utility providers. Notices went out by email.
ERCOT would not say how much Breeze Energy was in default. Power retailers must meet certain collateral requirements based on market share.
Breeze Energy could not be immediately reached for comment. The company, which sold wind power plans, has been in business for six years, according to records from the Public Utility Commission.
Industry analysts speculated that the demise of Breeze Energy may reflect the recent spike in wholesale electricity prices, a consequence of higher temperatures and the recent closure of several coal fired power plants. Retailers have to pay more for electricity as prices rise yet they can’t ask their customers locked into fixed rate contracts to pay more.
“I suspect other retailers are in a similar boat,” said Fred Anders, the founder of Texas Power Guide in Houston, a website that calculates the cost of retail electricity plans.
Breeze Energy has been a low-cost leader in Houston for about the past 18 months, he said.
Reliant will take over about 30 percent of Breeze’s customers in Houston, according to spokeswoman Pat Hammond. Other providers will also step in to provide power.
When electricity customers are involuntarily shifted to other providers, their electricity rates increase overnight because the new rates are market prices with no incentive pricing. Customers who are switched like that should shop immediately for new plans and the Public Utility Commission of Texas encourages customers to use the website powertochoose.org to find one with more favorable rates.
Customers who are involuntarily switched do not have to pay cancellation fees to their previous provider, according to the utility commission.