How a Missed Payment Can Lead to Higher Electric Bills

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How One Late Bill Can Spiral into a Financial Nightmare

We’ve all been there. Life gets busy, and sometimes, a due date slips through the cracks.

But when it comes to your electricity bill, even one missed payment can trigger a cascade of consequences that can quickly turn a small oversight into a significant financial headache.

The Slippery Slope of Missed Payments

Just ask Sarah, a single mother from Houston.

“I had always been on top of my bills,” she shared, “but then my daughter got sick, and I had to miss a few work days. That one late payment turned into a nightmare. The fees kept piling up, and before I knew it, I was facing disconnection.”

Sarah’s story is all too common in Texas, where strict regulations and unique market structures can make it difficult for consumers to navigate the consequences of a missed payment.

Consequences of a Missed Payment

In Texas, Retail Electricity Providers (REPs) can charge a late fee of up to 5% on the delinquent balance.

That might not seem like much, but remember that fee applies to your entire past-due amount, not just what was originally due.

Here’s an example: Your original bill was $100, but you missed the payment.

With a 5% late fee, you now owe $105.

If you can’t pay that and your bill remains unpaid after the 16-day grace period, your REP can pay another 5% penalty.

Now you’re looking at a bill of $110.25, and that’s not even counting your next month’s charges.

Accumulated Charges

Each month your bill goes unpaid, it grows.

Late fees, penalties, interest (which REPs are allowed to charge), and your original unpaid amount feed into each other.

A missed payment can quickly escalate into hundreds of dollars owed.

This is especially devastating for lower-income households.

A 2020 report by the National Energy Assistance Directors’ Association (NEADA) found that the average low-income household in Texas pays 12.6% of their annual income on home energy costs, compared to just 3.7% for non-low-income households.

Service Disconnection

If your bill remains unpaid, your REP can request to have your electricity shut off. However, there are some restrictions:

• Notice: Your REP must provide a written disconnection notice, generally at least ten days before potential shutoff. Check your provider’s specific terms; some may offer more extended grace periods. [PUC Substantive Rule §25.483].
• Weather Protection: Disconnections are usually prohibited during extreme weather advisories.
• Medical Necessity: You may qualify for disconnection protection if someone in your household relies on electricity for a critical medical device. Contact the Texas Public Utility Commission (PUC) for details.

Getting the lights back on if your service is disconnected isn’t as simple as paying your overdue balance.

You’ll likely have to pay a reconnection fee, ranging from $25 to $50, plus a deposit to reestablish service.

For anyone struggling, coming up with these extra funds can be an insurmountable challenge.

Resources and Rights: You’re Not Alone

If you’re facing mounting electricity bills and the threat of disconnection, knowing you have rights and options is important.

Payment Plans

Texas law requires REPs to offer deferred payment plans to customers who request them.

These plans allow you to spread your overdue balance over several months, making your debt more manageable.

Don’t be afraid to ask your REP about this option. They are required to offer it.

Assistance Programs

There are programs available to help households struggling with energy costs.

The PUC: Your Ally

If you can’t reach a fair resolution with your REP, the PUC’s consumer protection division will help. You can file a complaint here, and they’ll investigate.

Strategies for Staying on Top of Payments

The best way to handle the consequences of a missed electricity payment is to avoid missing payments in the first place.

Here are a few strategies to help ensure you stay current on your bills:

• Set reminders: Mark your due date on your calendar, set a reminder on your phone, or sign up for email alerts from your REP.
• Enroll in autopay (with caution): Many REPs allow you to have your payment deducted automatically each month. Ensure you have sufficient funds in your account to avoid overdraft fees.
• Budget and prioritize: Treat your electricity bill like your rent – a non-negotiable expense that you budget for each month.
• Communicate early: If you anticipate having trouble paying, contact your REP immediately. Many providers offer hardship programs or payment plans to help you avoid missed payments and the associated fees.

Breaking the Cycle

For many Texas households, a single missed electricity payment can create a chain reaction of fees, accumulated debt, and the looming threat of disconnection.

But you’re not powerless. If you’re struggling, contact your provider, explore assistance programs, and consider shopping for a more affordable plan.

With the right support and a proactive approach, you can break the cycle of electricity bill debt and regain control of your finances.

Remember, you’re not alone in this. There are resources and people ready to help.

Don’t be afraid to reach out and advocate for yourself. You’ve got this.