What is a Provider of Last Resort?
The Provider of Last Resort (POLR) becomes your provider when your Retail Electric Provider (REP) exits the market for any reason. If your REP were to go out of business, the POLR becomes your temporary REP so that you do not experience an interruption in service. Think of the POLR as a safety net.
If the REP for your home or small business goes out of business, you can expect the following:
- The POLR for your area is determined by the Public Utility Commission of Texas.
- You will receive communications from up to three sources notifying you that your current REP is going out of business:
- Public Utilities Commission of Texas (PUCT): The PUCT will contact you by mail with the news that your REP is going out of business and that you are slated to be moved to the POLR. This communication is dependent on whether your correct contact information is available. The PUCT may also contact you by email or phone.
- Your Current REP: Your current REP may send out a notice to its customers about the change.
- Your POLR: Once you have been assigned to a POLR, this provider will send a notification letter with information about your new POLR electricity plan.
- The rate you are charged by the POLR can be much higher than standard industry rates because the POLR has to account for a sudden influx of customers when your REP goes out of business. You should contact your POLR about their competitive rates or shop for a fixed-rate electricity plan with another REP to avoid price spikes.
- Your POLR may require a deposit to be provided after 15 days of service if you have not selected another plan with your POLR or switched to another REP.
- If you choose to stay on the POLR rate, you will have 60 days to switch to another electricity plan with your POLR or another provider. During this time, you may switch to a different REP free of charge if you do not want to stay with the POLR.
Read more information about POLR policies on the Texas PUC website.
If you're looking for a long-term energy plan, check out electricity plans from Direct Energy. We offer a variety of fixed-rate plans so you can find one to fit your home and avoid price spikes from market changes.
Why does Texas have POLRs?
Before Texas energy deregulation, utilities controlled both the energy supply and the process of selling energy to consumers in their service area. Now these utilities are only in charge of distributing electricity to consumers while competitive REPs sell electricity to consumers, allowing customers to choose their own electricity providers, plans and prices. To keep the utilities out of the business of selling energy, policymakers created the POLR structure, which requires competitive REPs to serve customers if their REP leaves the market.
Every two years, PUCT designates certificated REPs to provide POLR service for each service area. The largest providers are required to serve as POLR and smaller providers may volunteer to participate.
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