If you live in Texas or the North East there’s a good chance you have different electricity rates to select from. Plans have evolved over time and are not so Black & White these days. Some offer free electricity usage during certain times. Others offer different rates depending on your monthly usage. UtilityHound a ReloTech concierge scans multiple electric rates from different companies. Furthermore, they do this for new tenants and homeowners for free. We’ll discuss how they break down an electricity bill and make sure clients get the best electricity rates.
How to Breakdown Electricity Rates and Plans
There are several things that go into an electric plan. This can be tricky for many people. Let’s break down the different electricity rates within a plan. Below are some terms and charges on an electricity facts label, which details your specific plan.
Energy Charge
This is the cost the energy company passes through to produce the kWh associated with your plan. You can take this number and multiply it by the number of kWh you plan to consume or did consume.
Ex .075 c/kWh(Energy Charge) x 2,000(Monthly kWh Used)= $150 Monthly Energy Charge
TDSP (TDU) Charge
The Transmission Distribution Service Provider typically owns and provides maintenance on power lines that deliver power to your home or apartment. This charge that is passed through to residents helps to cover maintenance for damaged power lines or to restore power when it’s out. You will also multiply it by the number of kWh you plan to consume or did consume.
Ex .0367 c/kWh(TDSP Charge) & $3.25 per month x 2,000(Monthly kWh Used)= $76.65 Monthly TDSP Charge
Base Charge
This charge is added at the discretion of the REP (Retail Electric Provider). Not all plans have them. You would simply combine this charge with your Energy Charge & TDSP Charge.
Ex. $150(Monthly Energy Charge) + $76.65(Monthly TDSP Charge) + $5 (Base Charge)= $231.65 Monthly Electricity Bill Charge
Average Rate
Electricity rates on your electricity bill are normally broken down to 3 average rates. This helps a resident gauge what their bill might be depending upon how much electricity they plan to use each month. They are usually broken down by 500, 1,000, and 2,000 kWh monthly avg usages. The avg. rate is the Energy Charge, Base Charge, and the TDSP charge all bundled together.
Termination Fee
When a resident enters a fixed rate term with a Residential Electric Provider. They’re not allowed to start a new contract with a different provider, at that same address, during the initial companies contract period. If this type of action occurs the original provider can access an early termination fee (usually around $150) to the customer. However, in Texas, when a resident moves to a new property. The current contract is void and they can select a new contract with no penalty. This is because the contract is only enforced to the address service was started at.
Ex 1. You entered a 12-month contract at your new home in Texas. Within 4-months at the same home decided to switch providers…you would be subject to an early termination fee on your last electricity bill.
Ex 2. Ex. You entered a 12-month contract at your new home in Texas. Moved to a new house 7-months later and decided to switch to a different provider at the new house…you would NOT be subject to an early termination fee.
Renewable Energy %- If you select a green (renewable) energy plan it should state in your EFL (Electricity Facts Label) what % of the energy provided on your plan comes from renewable energy. If you purchased a wind energy plan, then 7% of the energy on that plan might come from the renewable source. The rest will most likely be coming from the traditional methods of producing electricity.
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Electricity Rates by Term Plans
There are 2 types of basic term plans for residents to choose from. They are Variable-rate and Fixed rate term. Each type has their benefits.
Variable Rate
Allows residents to select a plan with no locked in term. You can keep this plan for a couple days or you can keep it for a couple years. The electricity rates with these plans have the potential to vary from month to month, which could cause fluctuations on your electricity bill. Making this plan ideal for someone who will only be living somewhere short term.
Fixed Rate
This type of plan locks the electricity rates for the resident for the term of the contract they agree to. This type of plan is desirable for most residents as they will get a very consistent electricity bill due to a stable energy charge. Great for someone that will be living somewhere for more than 6 months. When you sign up for electricity rates on a fixed-rate term plan. You have the choice to pick between a 3, 6, 9, 12, 24, or 36-month contract. This term is the contractual length of the plan. If terminated before this time frame is up there is the possibility of early termination fees.
Now you can understand a plan and sign up with one that has good electricity rates! According to the U.S. Energy Information Administration, the majority of Americans pay between 10 and 20 cents per kilowatt hour for electricity. Now that you’re educated on how to read and estimate an electricity bill. We believe that you can find an electric rate below 10 cents most of the time. If you’re too busy and would rather someone else look into this for you…visit utilityhound.com.