I heard about this on the radio yesterday (Marketplace NPR) and was curious what others thought about it.
Here is an article:
TXU to peg some customers' rates to credit scores
As far as I know this is only an idea that is being kicked around in TX..but I could be wrong...altho. I have read that many states restrict this form of 'credit scoring"

Question for debate...

Do you feel it is fair or unfair to use credit scoring to determine customer rates for things such as utilities and why?

Seeing as customers wont be borrowing money but using power I don't think this is a fair practice at all. Now is that customer had been late with that same company I can see the justification. But as it shows in the article now I believe it to be very wrong.

Do you feel it is fair or unfair to use credit scoring to determine customer rates for things such as utilities and why?

There is already a penalty for late payment in utility bills, and a means of preventing further loss (shutting off the power). Why should credit rating have anything at all to do with your rate?

In general, credit scores are being used for a great many more things than they should be. Auto insurance rates are another example. This raises the question--if you have falsities on your report which lead to higher rates on utilities or insurance--should the provider have to refund you the difference once the error is corrected? If not--why not?

Well, arguably, it's no different than being charged a premium on insurance.

Do you feel it is fair or unfair to use credit scoring to determine customer rates for things such as utilities and why?

I don’t think “fair” is the right term here, isn’t that illegal?!? Either way, I think it is wrong. It’s not like we’re talking about buying a Gucci sweater here; this is a basic (21st century) need. A personal example; I declared bankruptcy in 1994, which trashed my credit rating, HOWEVER, my utility bills were always paid on time. Under TXU's philosophy, I would have been penalized merely for my "credit rating" and not my good standing with utilities. Wrong, wrong, wrong!

I agree with Hobbes; there are plenty of ways to penalize non-payers other than this shady, unethical price structure. I notice the company isn’t telling its customers up front about this little detail, either.

As for TXU claiming that customers can always choose another provider, I don’t know how easy that would be. Doesn’t that all depend where you live, and whose power lines you end up using? Can anybody weigh in on that? I’ve only ever had one electric company – Southern California Edison, and they’re the only game in town. I wouldn’t swear to it, but I think there are only 2 electric companies in CA; the other being PG&E in Northern California.

The other provider in Dallas is Reliant Energy, but that is a recent development (last 2 to 3 years). Also, you forgot the LA Department of Water & Power But as far as I know in CA you don't have a choice, the state is just broken up regionally.

Do you feel it is fair or unfair to use credit scoring to determine customer rates for things such as utilities and why?
It is completely unfair, I don't really see how your credit score should factor in. Hobbes had it right, they already have measures in place if you fail to pay. They will assess fees, ding your credit and eventually shut off your power if you don't pay.

This is actually a fairly common practice in the insurance industry as well; particularly concerning auto insurance. The companies argue that they are merely protecting themselves from insolvent customers; but more recently consumer opposition is growing.

Whoopsie! My bad! Maybe it was a subconscious thing...I worked briefly for the Metropolitan Water District in LA and it is an experience I would dearly love to forget.

But, thanks, I did think who you paid had more to do with where you lived in CA and not by getting a choice.

I don't understand the comparison to auto insurance. There are so many other factors that affect the cost of auto insurance, such as the theft and accident rates in your area, age, gender, number of drivers, type of vehicle, number of vehicles on the policy, the amount of coverage...and on and on. How does that equate to energy costs?

It seems like this is part of a larger trend in our society: the de-personalization of personal data. This may seem counter-intuitive given that there is so much of our personal data floating around between corporate interests. Here in San Diego, there is a scandal about Albertson's being sued because they are selling prescription data to healthcare companies.

But this isn't really personalization, it's just giving companies better ways of moving large amounts of data from one column into another. Instead of looking at individuals as individuals, data like this makes it easier to look at us as classes of individuals, and therefore makes it easier and faster to make decisions about it.

A credit score is just another way of creating different data classes of customers. This helps to take the decision of whether or not to do something (e.g., raise rates, move up on the rolling blackout heirarchy, sell selected customer data, etc.) out of the hands of people and into an algorithm that you can't debate with (or don't need to). I am sure there are many other pieces of data that can be used like this, like driving records, grocery store purchasing behavior, and school transcripts.

In my opinion, this is an example of collected data being used as something it was never intended for. If they really wanted to verify the ability of their customers to pay, they would have used a different measure. But since this is a pre-existing, quantifiable financial score, it seemed like an ideal outsourced source of information. I don't know about you, but I usually pay utility bills first (or second) because I like my electricity, so I would think my credit score would have nothing to do with my ability to pay utility bills (SDG&E, by the way -- another regional California utility with no competitor).