Thousands of electricity customers in Texas are dealing with high bills by skipping out on them and signing up with new providers.

They are called "energy hoppers," and electricity companies don’t like to talk about them. Who can blame the companies?

"It happens all the time," one administrator at a Tarrant County social-services agency told me. "A whole lot of people do it."

A Reliant Energy spokeswoman said, "We see unpaid balances on thousands of closed accounts."

Because other electricity providers don’t know who they are, delinquent customers have no trouble finding a new company to serve them.

A spokesman for the Public Utility Commission calls it "gaming the system."

The practice has become so widespread that PUC Chairman Barry Smitherman spoke out on it this month. Customers who owe money should "work it down" with the providers to whom they owe money rather than switch to a different company and leave the old company with unpaid bills, he said.

Energy hoppers don’t get away with it entirely. Their credit ratings can suffer, and some electricity providers threaten to take wayward customers to small-claims court, although none acknowledges doing that yet.

But electricity providers are hampered by state rules that prohibit the creation of a statewide database showing customers’ payment histories. If there were one, providers could see which customers are big risks.

Providers get only coded summaries from credit agencies of a customer’s general history of utility payments to phone, electricity and cable companies. Apparently, that’s not enough to tell them who the delinquents are.

It’s also not enough for them to figure out how much a new customer should pay as a deposit.

The worst part about energy hoppers? In the end, good customers who pay on time end up footing the bill, providers say.

I discovered this when researching the case of Lori Conway of Fort Worth. She complained to The Watchdog that she received a $2,600 bill from Ambit Energy of Dallas and that she had been accused by Oncor, which reads her meter, of meter tampering, which she vehemently denies.

When I contacted Ambit and Oncor, I learned that Conway had not received an electric bill for eight months. Her big mistake? She never called to ask why.

"They didn’t send me a bill, so I thought, 'Don’t worry about it,’ " she told me.

Ambit cut off her electricity, which forced her family to find other lodging for four days, and told Conway that she had to pay $2,600 to get the power turned back on.

Instead, she signed up with another company, which did not require a deposit despite her big bill with Ambit and a 2-year-old personal bankruptcy filing listed in public records. Among her creditors in that bankruptcy: TXU Energy for $1,100.

She has electricity again, but Ambit says it’s not done with her. Her debt is being referred to a collection agency and she may be sued in small-claims court, Ambit co-founder Chris Chambless told me.

Conway said she realizes that she should have jumped on the matter when bills stopped showing up each month. Now, she said: "I live from paycheck to paycheck. How I would ever come up with $2,600. It’s had me stressed, to say the very least."

State law used to allow an electricity provider to get records from other providers when assessing the risk factor of a new customer. But that provision expired 20 months ago.

Despite pleas from some providers, the state has not created a rule allowing a statewide database because of concern that it could place an unfair burden on some customers, especially lower-income households. It’s up to the Legislature to fix this loophole and put an end to energy hoppers.

But because electricity bills are so high, there has been a reluctance to make matters worse, The Watchdog concluded after talking to consumer and energy groups.

Without a database, companies say they have to be smart in deciding how much of a deposit to require. Under Texas law, electricity providers cannot deny anyone service based on credit history. A deposit is their only leverage.

Current law allows utilities to charge deposits to residential customers of up to one-fifth of an estimated annual billing or the estimated sum of the next two months’ worth of bills. Customers with good payment histories are usually allowed to forgo a deposit, companies say.

Deposits are not required from Texans over age 65 with good payment records, people with medical problems, victims of family violence and people receiving government aid.

I checked with several companies for their policies, and they vary, so consumers should always ask.

Not all providers agree on the need for a statewide database. Stream Energy, for example, says it "would not be in favor of anything that would create unfair barriers to consumers looking to exercise their options in the marketplace."

TXU acknowledges speaking to state regulators about such a database. Direct Energy says it would support one, too, because nonpayers result in higher rates for people who pay on time, spokeswoman Lisa Dornan said.

In Conway’s case, her meter stopped and showed zero electricity usage for more than seven months. Meter readers thought the house was unoccupied. But in the summer, a meter reader noticed that the air conditioner was running but that there was still no usage shown.

An investigation showed that someone had stopped the meter, but Conway says she knows nothing about it.

Still, when it came time to switch companies, she easily signed up with a new one.

The required deposit: zero.

Eviction was not an option: That's what Melonie Griffiths-Evans kept telling herself, even after the bank had foreclosed on her home in 2007 and was preparing to oust her so the house could be resold.

After a series of financial setbacks, including the loss of a job, the single mother of three had fallen hopelessly behind in her mortgage payments. But Griffiths-Evans, 38, wanted dignity for herself and her children, a way to negotiate their departure without being thrown out.

The Boston resident concedes that her home in the Dorchester neighborhood, assessed in February at $265,000, was basically unaffordable when she purchased it in 2004 for $470,000 with no down payment. She had taken out two loans in order to buy the home without private mortgage insurance -- one at 8.5% on 80% of the purchase price and the other at a whopping 12.5% on the remaining 20%. Her monthly payments totaled about $3,500, but, she says, she was assured by her lender that she could soon refinance into a lower-cost fixed-rate mortgage.

But she found herself unable to refinance, and the lender, whom the state attorney general eventually barred from making loans in Massachusetts, stopped returning her calls.

Unfortunately, troubles like Griffiths-Evans' are becoming more and more familiar.

Over the past decade or so, single women have become a major force in the housing market. The proportion of single female homebuyers climbed from 14% in 1995 to 22% last year, according to the National Association of Realtors. And by 2010, single women will make up about 28% of homeowners, Fannie Mae estimates.

But those gains haven't come without a price. Several studies have shown that women -- and women of color, in particular -- are more likely than men to be targets of subprime and predatory lenders, and that many of the women who have lost their homes to foreclosure could have qualified for lower-cost loans. And although there are no data comparing foreclosure rates between men and women, subprime loans have a higher rate of default. So with foreclosures soaring, experts say women are at particular risk of losing their homes. "Even women with similar incomes as men were more likely to get subprime loans," says Anita Hill, a professor of law, social policy and women's studies at Brandeis University in Waltham, Mass. "Women were more likely to get subprime loans, and African-American women were even more likely. Women were advised they weren't qualified for prime loans, and in many cases that was erroneous information."

Even women at high socio-economic levels were more likely than men to receive subprime mortgages and other loans, according to a December 2006 study by the Consumer Federation of America. Women earning double the median income were 46.4% more likely to receive subprime mortgages -- which carried interest rates at least 3 percentage points higher than the standard lending rate -- than men with similar incomes, the study said.

The numbers were even worse when race was factored in: African-American women earning double the area's median income were nearly five times more likely to receive subprime mortgages than their white male counterparts.

About 75% of the women facing foreclosure in the Washington, D.C., area between 2005 and 2007 could have qualified for better loans, according to one study by the Urban Institute, a think tank for economic and social policy.

"There's a lot of blame to go around," says Alan Fishbein, the director of credit and housing policy at the Consumer Federation. "The borrower has to take some of the blame, but the mortgage industry gets most of the blame for the current crisis."

Fishbein suggests the reasons for the disparities are numerous and open to interpretation. Single women's wealth and earnings lag behind those of men and married couples, so these women have more difficulty obtaining credit even though their credit scores are generally higher. Another study says women are more reluctant than men to bargain for the best mortgage deals. And then there's always the specter of gender and racial discrimination.

Among the "highly toxic" loans marketed to women, Fishbein says, was the 2/28 adjustable-rate mortgage, usually starting with fixed payments at a "teaser" rate, often about 7.5%, and then two years later switching to an adjustable rate, initially rising about 4 points. Many borrowers who tried to refinance after the two-year teaser period could not. As home prices in their areas plummeted, the women's mortgages had become greater than the value of their homes.Many people were deceived by these low teaser rates, says Stuart Katzenberg, the head organizer of the Maryland chapter of the Association of Community Organizations for Reform Now, or ACORN, a nationwide grass-roots advocacy group. The real impact was often undisclosed or hidden in hundreds of pages of paperwork, he notes. Many borrowers simply weren't aware that their fixed-rate mortgages would convert to adjustable-rate and/or balloon-payment mortgages, which require the owners to pay the entire principal loan balance after several years.

Darina Tolano, a housing counselor for Neighborhood Housing Services in Phoenix, has witnessed the fallout firsthand. In May, she was receiving 50 foreclosure-related phone calls a day -- although that has dropped since the state set up an emergency hot line -- with many of her clients single and recently divorced mothers facing potential default or foreclosure.

"I do see more single women facing foreclosure," she says. "It's very emotional. People are in such an emotional state that it's difficult for them to focus on what needs to be done. They cry; they don't know what else to do."

Recently, Tolano counseled a single mother with a subprime adjustable-rate mortgage who was in danger of losing her home. Because she earns more than her ex-husband and they share child custody, she pays child support while also juggling loan payments on the house. She can't afford the mortgage's rising interest rates and isn't able to refinance at a better rate.

Tolano recently sent a proposal to her lender requesting a lower mortgage payment but knew the lender might reject the proposal.

In Griffiths-Evans' case, having an advocate bought her some time and dignity. Earlier this year, the organizational muscle of City Life/Vida Urbana, a local community activist group, helped her block two eviction attempts. City Life organized a "blockade," a grass-roots protest on Griffiths-Evans' front porch aimed at publicizing her plight and pressuring the lender into discussing options other than eviction.

The tactic worked, says Steve Meacham, City Life's tenant organizing coordinator. After first giving Griffiths-Evans time to try to find a buyer, the lender permitted her family to stay in the home for three months. When a buyer didn't materialize, the lender gave her an additional month to find a rental apartment.

Deborah Williams, 39, a single mother who lives in the Roxbury section of Boston and lost her home in an eviction she's now challenging in the city's housing court, says lenders are a big part of the problem.

When buying the house in 2002 for $430,000, she hired a real-estate lawyer -- referred by her lender -- to make certain she would avoid any financial pitfalls. But she says now that she's had nothing but pitfalls. Williams believed she had obtained a fixed-rate mortgage at 6.8%, but within two years the rate adjusted to 10%, and her monthly payment rose from $1,400 to $3,800. After falling behind in her payments, Williams filed for bankruptcy protection.

She acknowledges that she made mistakes, but she also believes mortgage lenders need to share responsibility and be more closely regulated.

"There are guidelines that need to be revised, laws that need to be changed," Williams says. "If you're given fraudulent loans, someone needs to go to jail. Someone needs to be held accountable."

By Matthew L. Wald

August 26, 2008

When the builders of the Maple Ridge Wind farm spent $320 million to put nearly 200 wind turbines in upstate New York, the idea was to get paid for producing electricity. But at times, regional electric lines have been so congested that Maple Ridge has been forced to shut down even with a brisk wind blowing.

That is a symptom of a broad national problem. Expansive dreams about renewable energy, like Al Gore’s hope of replacing all fossil fuels in a decade, are bumping up against the reality of a power grid that cannot handle the new demands.

The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not.

The grid today, according to experts, is a system conceived 100 years ago to let utilities prop each other up, reducing blackouts and sharing power in small regions. It resembles a network of streets, avenues and country roads.

“We need an interstate transmission superhighway system,” said Suedeen G. Kelly, a member of the Federal Energy Regulatory Commission.

While the United States today gets barely 1 percent of its electricity from wind turbines, many experts are starting to think that figure could hit 20 percent.

Achieving that would require moving large amounts of power over long distances, from the windy, lightly populated plains in the middle of the country to the coasts where many people live. Builders are also contemplating immense solar-power stations in the nation’s deserts that would pose the same transmission problems.

The grid’s limitations are putting a damper on such projects already. Gabriel Alonso, chief development officer of Horizon Wind Energy, the company that operates Maple Ridge, said that in parts of Wyoming, a turbine could make 50 percent more electricity than the identical model built in New York or Texas.

“The windiest sites have not been built, because there is no way to move that electricity from there to the load centers,” he said.

The basic problem is that many transmission lines, and the connections between them, are simply too small for the amount of power companies would like to squeeze through them. The difficulty is most acute for long-distance transmission, but shows up at times even over distances of a few hundred miles.

Transmission lines carrying power away from the Maple Ridge farm, near Lowville, N.Y., have sometimes become so congested that the company’s only choice is to shut down — or pay fees for the privilege of continuing to pump power into the lines.

Politicians in Washington have long known about the grid’s limitations but have made scant headway in solving them. They are reluctant to trample the prerogatives of state governments, which have traditionally exercised authority over the grid and have little incentive to push improvements that would benefit neighboring states.

In Texas, T. Boone Pickens, the oilman building the world’s largest wind farm, plans to tackle the grid problem by using a right of way he is developing for water pipelines for a 250-mile transmission line from the Panhandle to the Dallas market. He has testified in Congress that Texas policy is especially favorable for such a project and that other wind developers cannot be expected to match his efforts.

“If you want to do it on a national scale, where the transmission line distances will be much longer, and utility regulations are different, Congress must act,” he said on Capitol Hill.

Enthusiasm for wind energy is running at fever pitch these days, with bold plans on the drawing boards, like Mayor Michael Bloomberg’s notion of dotting New York City with turbines. Companies are even reviving ideas of storing wind-generated energy using compressed air or spinning flywheels.

Yet experts say that without a solution to the grid problem, effective use of wind power on a wide scale is likely to remain a dream.

The power grid is balkanized, with about 200,000 miles of power lines divided among 500 owners. Big transmission upgrades often involve multiple companies, many state governments and numerous permits. Every addition to the grid provokes fights with property owners.

These barriers mean that electrical generation is growing four times faster than transmission, according to federal figures.

In a 2005 energy law, Congress gave the Energy Department the authority to step in to approve transmission if states refused to act. The department designated two areas, one in the Middle Atlantic States and one in the Southwest, as national priorities where it might do so; 14 United States senators then signed a letter saying the department was being too aggressive.

Energy Department leaders say that, however understandable the local concerns, they are getting in the way. “Modernizing the electric infrastructure is an urgent national problem, and one we all share,” said Kevin M. Kolevar, assistant secretary for electricity delivery and energy reliability, in a speech last year.

Unlike answers to many of the nation’s energy problems, improvements to the grid would require no new technology. An Energy Department plan to source 20 percent of the nation’s electricity from wind calls for a high-voltage backbone spanning the country that would be similar to 2,100 miles of lines already operated by a company called American Electric Power.

The cost would be high, $60 billion or more, but in theory could be spread across many years and tens of millions of electrical customers. However, in most states, rules used by public service commissions to evaluate transmission investments discourage multistate projects of this sort. In some states with low electric rates, elected officials fear that new lines will simply export their cheap power and drive rates up.

Without a clear way of recovering the costs and earning a profit, and with little leadership on the issue from the federal government, no company or organization has offered to fight the political battles necessary to get such a transmission backbone built.

Texas and California have recently made some progress in building transmission lines for wind power, but nationally, the problem seems likely to get worse. Today, New York State has about 1,500 megawatts of wind capacity. A megawatt is an instantaneous measure of power. A large Wal-Mart draws about one megawatt. The state is planning for an additional 8,000 megawatts of capacity.

But those turbines will need to go in remote, windy areas that are far off the beaten path, electrically speaking, and it is not clear enough transmission capacity will be developed. Save for two underwater connections to Long Island, New York State has not built a major new power line in 20 years.

A handful of states like California that have set aggressive goals for renewable energy are being forced to deal with the issue, since the goals cannot be met without additional power lines.

But Bill Richardson, the governor of New Mexico and a former energy secretary under President Bill Clinton, contends that these piecemeal efforts are not enough to tap the nation’s potential for renewable energy.

Wind advocates say that just two of the windiest states, North Dakota and South Dakota, could in principle generate half the nation’s electricity from turbines. But the way the national grid is configured, half the country would have to move to the Dakotas in order to use the power.

“We still have a third-world grid,” Mr. Richardson said, repeating a comment he has made several times. “With the federal government not investing, not setting good regulatory mechanisms, and basically taking a back seat on everything except drilling and fossil fuels, the grid has not been modernized, especially for wind energy.”

Don LaFontaine was admitted to Ceders on Friday. His family sent out the letter below:

Dear friends and family, I need your help and I'm reaching out to all of you. My wonderful husband is in critical condition at Cedar Sinai hospital; a blood clot is lodged in his lung and he is fighting for his life. This happened on Saturday after I'd taken him in for shortness of breath on Friday. He was doing very well and I left him talking and being funny on Friday evening. Without all the details, I got a call on Saturday morning as I was heading there to visit. There has been some lovely improvement yesterday but he is very sick right now. We need your concentrated prayers! Have your churches synagogues, temples send out prayers for Don's healing and wellness. Light a candle, chant, whatever you do to send that loving energy and light to him, I would appreciate. And save a little for the girls and me. We have had small miracles already and if we all shout up to God collectively, I know how powerful that can be. He is fighting and we all are fighting with him. He is strong and is a warrior so I thank you in advance for your prayers, good wishes and kindness on behalf of my family. With a hopeful heart, Nita and family Don has blessed us with his powerful voice, so let's bless him with ours! We can't think of any stronger energy than THOUSANDS of voice talents, actors, directors, producers and entertainment colleagues. If we all stick together and put out positive energy, prayers or whatever your believe, we can collectively make Don well.

Please join with us to help bring Don back home to his loving family.

Jim & Penny

When Tracy Holmes of Belleville sold three DVDs for $10 at her garage sale Aug. 15, she thought she was doing well. She was getting rid of some movies that she and her husband hadn't watched in a long time and making a little money as well.

About a week later, when her husband, Fred Holmes, asked her what had happened to the DVD of "Sin City," she suddenly felt sick.

Her husband had been secretly saving up money, at least $1,200 so far, for a Christmas family trip to Disney World in Florida for the couple and their three children, Nick, 11, Trevor, 7, and Isabella, 2.

"He thought apparently (the DVD case) was a great spot to hide it from me, and it was," Holmes said. "I didn't think to look there."

As best she can remember, Holmes thinks the man who bought the DVD was about 6 feet tall and in his 50s or possibly 60s. She's hoping that if she gets the word out, the buyer will return the money.

"My kids are pretty upset about the whole thing, and I feel just heartsick," Tracy Holmes said. "It's always been a dream of mine to go to Disney World at Christmas."

Her husband, who had been saving for a couple of years for the trip, stashed the money behind an advertisement inside the cover of the DVD, she said.