Why You Should Evaluate Electricity Providers and Rates
Residential customers can save money by choosing an electricity plan that’s cheaper than the default rate offered by their local utility company. In addition, some plans offer perks like free intelligent thermostats or LED light bulbs. But beware: Dubious competitive supplier sales agents may ask to see your utility bill and use that information to switch you to a plan without authorization. It is a common tactic.
Save Money
If your community offers Energy Choice, switching power providers might help you save money. Remember that your utility is still in charge of handling the delivery aspect of your electric service. The first step in identifying savings opportunities is to review your current costs. For instance, if you reside in Texas, look at the “electric supply charges,” typically displayed in cents per kilowatt hour on your account. You can use this figure to compare prices offered by third-party suppliers. Your price to compare is an estimate based on averages from your rate class and may not reflect the actual cost for your home or business. Once you’ve compared the cost of different suppliers in Texas, you can determine whether they offer a plan that fits your needs. You’ll want to choose the best electricity rates in Texas that offers a competitive price for the duration of your contract. Or, you can select a variable rate plan to take advantage of low rates during low demand. Many utilities also offer time-of-use (TOU) plans that vary the cost based on when you use your energy. These plans charge more during peak hours, such as after 2 pm, and less at off-peak hours. You can save more by using your high-usage appliances during off-peak hours.
Avoid Volatile Rates
The best way to manage energy rates is by being aware of the factors influencing them. The first is supply and demand. When the weather is warm, demand increases which leads to higher prices. The other major factor is fuel costs. Both fossil fuels like coal and natural gas, as well as alternative energy sources, can have an extensive range in price. You can better plan choices by understanding how these elements affect electricity rates. For example, choosing a fixed-rate plan can help protect you from price volatility because the rate won’t change for a specific period. Avoiding high energy bills this summer and beyond is an excellent option.
Another tip is to look for a provider that offers flexible contract terms. For instance, you can lock in a rate for one or two years and switch to a variable-rate plan if market prices are low.
Also, check the supplier’s state license number to ensure they are a valid retail energy provider. The website of the utility provider serving your area has this information. Also, read any plan’s fine print to ensure you understand the details. For instance, some plans may not include transmission and other charges that the utility typically passes to customers.
Choose the Right Supplier
If you spend money with a supplier, ensuring they are the right fit makes sense. To do this, list the qualities you’d like to see in a potential provider – including customer service, quality, and price. Next, prioritize your needs and decide based on the best matches. It’s easy to find competitive energy rates in Texas since the state government deregulated its energy market, separating the charges for delivering power to homes and businesses from those for actual electricity. It allowed competition between many Energy Service Companies (ESCOs). Local area regulations also influence your energy prices, as they dictate how much your utility company can charge for its services. Your local electricity authority should know your region’s current rules and rates. Once you’ve found a suitable provider, it’s time to start your new contract.
Identify Saving Opportunities
When comparing electricity rates and providers, looking at the total cost of your energy usage is essential. It includes both the supply charge and the delivery charge. You can shop for a company to supply your electricity, but you must continue to pay for the delivery of that power through your local utility. When shopping for a new electricity plan, you can use your current utility bill to find the rate charged on the supply portion of your bill (known as your Price to Compare). Then, find a supplier that offers a rate lower than your Price to Compare and calculate your potential savings.
Some plans offer a set price per kilowatt-hour for your contract term. However, there are also a variety of variable-rate plans available. These plans allow you to save money when market prices are low but can result in higher bills if rates increase. If you have a plan that charges different rates based on your usage level, using an electricity bill calculator to determine the average kWh used for each month is helpful. That will help you compare rates and ensure the plan fits your needs. You should also be aware of any introductory pricing or other factors that could change monthly.
