Electricity Fraud in Texas: Scams and Theft Hurt Customers and Providers

Retail electricity fraud is an old, but rapidly growing and evolving problem in Texas that hurts both residential customers and energy providers.

In 2024, NBC DFW reported a story about a man who lived in Phoenix, Arizona that was getting phone calls from a Texas electricity company regarding over $500 in unpaid, overdue bills from a home in North Texas.

Someone stole this man’s identity and used it to sign up for an electricity contract in Texas.

In 2021, KPRC Houston investigated a similar story in which one man’s identity was used to sign up for plans at seven different addresses with seven different energy providers. None of the people who lived at these addresses paid their bills and the man began to receive collection notices for over $4,400 in unpaid bills.

How electricity fraud impacts customers and providers

The stories above just skim the surface of the severity and abundance of electricity fraud in Texas.

An article from State Impact NPR estimates that in 2012, Texas consumers were robbed of $77 million through utility scams.

In 2025, a Houston man was sentenced to 54 months in prison following his involvement in a scheme that stole over $4 million from energy providers.

It is difficult to quantify the total financial impact to Texas energy consumers and providers, but it’s clear the actions of fraudsters hurt individual Texans in their wallets and credit scores, and that theft leads to millions in bad debt for providers.

Victims of identity theft get hit with collection calls and damaged credit scores
Customers pay fraudsters thinking they have a real electricity plan, but there’s no legitimate account in their name
REPs incur bad debt, which is priced into the rates they offer to consumers around the state
People with poor credit, non-English speakers, and the elderly are disproportionately targeted

Why is Texas a hotbed for electricity scams?

Texas is uniquely vulnerable to fraud in the residential electricity industry for several reasons:

The Texas energy market is deregulated, and there are dozens of energy providers to choose from
Texas energy is “non-POR” (non-purchase of receivables), meaning that energy providers are responsible for collecting payment directly from customers

Let’s dig into both of these factors:

How energy deregulation and the “power to choose” enables electricity scammers

The Texas electricity market is deregulated, meaning that residents of the state are able to choose who supplies or provides power to their home.

This “open” market allows many providers to join the space and compete for customers. As of May 2026, there are over 140 REPs in the Public Utility Commission’s (PUCT) directory list.

It can be argued that competition is good for the consumer, but this fragmented energy market with high competition also means there is not much cooperation or collaboration between providers.

Texas suppliers do not generally share information with their competitors the names, email addresses, phone numbers, and other consumer details that are associated with fraudulent activity.

This means it can be rather easy for one person to steal power from several electricity providers in a row. With so many options on the market, the system practically encourages thieves to hop from provider to provider, without paying their bills, leaving a trail of bad debt in their wake.

What is “non-POR” and how does that encourage energy fraud?

Non-POR stands for “non-purchase of receiveables.” In the Texas energy market, this means that providers are responsible for collecting payments directly from their customers.

Compare Texas to POR energy markets in the northeast United States, where regulated utilities are required to pay suppliers on behalf of the customer.

Thanks to the non-POR setup of the Texas market, REPs are very exposed to theft and bad debt.

Major types of energy fraud in Texas

In Texas, there are several major types of energy fraud, including identity fraud, consumer-facing scams, meter tampering, and solar power fraud.

Let’s dive into each one:

What is identity fraud in energy?

Identity-based fraud occurs when bad actors utilize stolen or synthetic identities to enroll in electricity plans.

Names, birthdates, SSNs, phone numbers, and address history can be bought on the dark web or collected through business fronts, then used to open real accounts with real providers.

In the case of the Houston man who landed in prison for 54 months, he and his team of scam artists created a fake REP, charged customers $80 per month, and signed their addresses up using stolen and fake information.

Consumer-facing scams in Texas electricity

Consumer-facing scams are those where the bad actors approach their victims online or in-person. They may threaten disconnection door-to-door while demanding payment, recommend fake plans and providers, or impersonate REPs over the phone to steal valuable consumer information.

How meter tampering works

Meter tampering is an old-school version of energy fraud that works by physically messing with meters on homes. For example, a bad actor may steal electricity from a neighbor or tamper with a meter to cause it to under-report kilowatt-hour consumption to the utility company.

Solar panel fraud, a new category of scam

Solar panel companies in Texas are under investigation for violations of the Deceptive Trade Practices-Consumer Protection Act. Actions that are under the microscrope include misrepresenting potential energy bill savings and solar panel efficiency.

Signs you’ve been a victim of energy fraud

Common warning signs that someone is targeting you for energy fraud:

You receive a bill, shutoff notice, or welcome email for an account you never opened
Service transfer notifications when you never requested to move your service to a new provider
Mail addressed to your home with names you don’t recognize

How to protect yourself from electricity scams

The best ways Texans can protect themselves from electricity fraud:

Freeze your credit scores with all three credit bureaus
Regularly monitor credit alerts
Be on the look out for phishing emails, fake websites, and spam calls
Shred documents that continue personal details before you throw them out

If you find yourself as a victim of fraud, here are some steps you can take to fight back:

Contact your utility company and energy provider immediately
Review your credit report for suspicious activity
File an identity theft report with local authorities and the Federal Trade Commission

How can electricity providers prevent creation of fraudulent accounts?

Texas REPs are fighting back against retail energy fraud by deploying several layers of identity verification and fraud prevention tools.

Soft credit checks, ID verification and fraud prevention software, and machine learning tools can flag suspicious behavior and activity before the bad actors successfully create an account.

At BKV Energy, we may request customers to provide additional details after an enrollment is submitted. This is to protect our own business, but also to protect the financial needs of our fellow Texans. We work hard to prevent bad actors from creating accounts with stolen information in order keep our families, neighbors, and colleagues safe.

Written by Graham Lumley

Graham Lumley, Growth Product Manager at BKV Energy, leads digital and traditional marketing strategies, focusing on educating Texans about the state's deregulated energy market. With over 10 years of marketing experience, he creates content to help consumers understand and save on their energy bills, bringing a fresh and dynamic approach to the industry.

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