What Is a Disconnection Notice?

This blog explores the main elements that may result in a disconnection, the legal notification you will receive in advance, and the possible financial repercussions of failing to make payments.

In Texas, the freedom to choose your retail electricity provider (REP) comes with the responsibility of keeping up with payment deadlines to prevent service interruptions. Although disconnections may feel like a worst-case scenario, they are carefully regulated by the Public Utility Commission of Texas (PUCT or PUC).

These regulations ensure REPs give proper notice before disconnecting service. Understanding the causes of disconnection, the process timeline, and how it might affect your credit is essential for preventing such disruptions.

When Can My Power Be Disconnected, and How Long Does It Take?

What Can Trigger a Disconnection?

Known as "DNP" (short for "did not pay"), disconnections can happen for several reasons.

The most common reason is failure to pay your electricity bill, regardless of the balance. Other potential causes include:

• Not adhering to the terms of a deferred payment or other agreement with your REP.

• Using electricity in a way that disrupts service for others or interferes with nonstandard equipment.

• Failing to pay the required deposit to your REP.

• A guarantor not fulfilling their payment obligations as outlined in a signed agreement allowing for disconnection of the guarantor’s service.

Will You Be Warned Before a Disconnection?

Your REP will alert you of missing payments and potential late fees immediately if a bill becomes past-due. Starting the day after your unpaid bill’s due date, you will also be at risk of being sent a legally required notice.

For best understanding, below are the official rules as they appear on the “Know Your Rights” PUCT webpage:

Prior to disconnecting your service, your REP must provide you with a disconnection notice. This notice must be mailed to you separately (or hand-delivered) no earlier than the first day after the date your bill is due, or, if the REP has offered and the customer has agreed to receive disconnection notices from the REP by email, be a separate email with the words “disconnection notice” or similar language in the subject line.

The disconnection date must be 10 days from the date the notice is issued and may not fall on a holiday or weekend (or the day preceding) unless the REP's personnel are available on those days to take payments or make payment arrangements and service can be reconnected.

Please be mindful of two commonly confused terms that have entirely different meanings:

• Disconnection Notice: A legal notice that a customer’s power will be disconnected at the earliest 10 days after the notice is mailed if the balance is not paid.

• Disconnection Order: The request a REP sends to a TDSP to have a customer’s power turned off starting 10 days after the disconnection notice was sent.

It’s also important to know, like the disconnection notice, that not all REPs send a disconnection order to be executed right away after the 10-day disconnection notice period ends. Some may take longer due to customer volume and/or priorities set within that company. But, most likely, the REP will send the disconnection order to the TDSP as soon as possible.

What Should I Do If My Power Is Already Disconnected?

If your power has been disconnected, pay your past-due balance directly to your REP. Once the payment is processed, your power should be restored within 4-6 hours, depending on weather conditions and the workload of your TDSP.

Does a Disconnection Impact My Credit History?

A disconnection itself, or prior late payment notices and fees, does not directly affect your credit score. However, there are potential indirect impacts:

• Non-Payment Reports to Credit Bureaus: While REPs typically do not report unpaid balances to credit bureaus like banks or credit card companies, unpaid balances left unresolved for months can eventually be sent to collections.

• Collections: If your REP disconnects your service and the balance remains unpaid for about 60–90 days, they may transfer your account to a third-party collections agency. This can severely impact your credit score for years.

  
  

Each REP has its own policies regarding when to send accounts to collections. However, unresolved balances are generally referred after multiple late notices, calls, and letters go unanswered. To avoid these long-term financial consequences, it’s crucial to address overdue bills as soon as possible.

Conclusion

The competitive electricity market in Texas gives consumers the freedom to select their electricity services, but it also demands careful attention to payment deadlines and the consequences of missing them. Disconnections, while accompanied by clear notices, can lead to significant costs, including service interruptions, late fees, penalties, and potential long-term financial impacts if the balance ends up in collections. By understanding the disconnection process, staying mindful of deadlines, and addressing any issues with your REP promptly, you can avoid unnecessary stress and financial difficulties.