Guest Blogger: Matt Oberle from TexasElectricityRatings.com (Part 1) – Understanding Month-to-Month Electricity Plans
By Texas Electricity, May 16, 2011, FAQs, News
Without question, the most common gripe I see come through to me are customers who are outraged over the changes made to their electricity rate over the course of their time with their electricity provider. And a vast majority of the time, this occurs with people who signed up for a month to month electricity rate. This is definitely confusing, because under Texas law, Texas electricity providers are legally allowed to advertise their month to month rates at their promotional price. What does this mean? Well, typically, every Retail Electricity Provider (REP) offers a discounted first month for electricity customers. And Texas law allows them to advertise their rate at this discounted price. But in almost every instance, this rate is going to skyrocket after that promotional time frame (typically the first billing term) has expired. This language is listed in the fine print of every electricity facts label, but it’s not always clear to customers on the surface who are ordering electricity.
When customers in Houston or Dallas sign up with an REP of their choice, they might see a rate around 5 cents per kilowatt hour (kWh), and they expect this is what they’re signing up for as an electricity rate. Well, this is a mistake. Chances are, after that first billing cycle (which could be anywhere from a week or a month depending on when you sign up and when your meter is read every month), your electricity rate will shoot up substantially, anywhere from the 10-13 cent kWh rate. It’s just a promotional rate, it will NOT last.
People need to understand this, just as much as they need to understand that the promotional term given out by the REP is based upon when the Transmission Companies (like Centerpoint and Oncor) reads your meter, so they have little control on how long that promotional period will actually last. This is the greatest piece of confusion I see from customers, and it results in a HUGE amount of angry emails feeling like they’ve been cheated and lied to by their electricity companies. Which is a perfectly understandable feeling. The problem is, as long as the Texas law allows companies to advertise this way, they essentially HAVE to advertise at the promotional rate. Why is this? Because one company will always advertise at that rate, which forces pretty much all the other companies to do the same simply to compete. It’s vital that customers understand exactly HOW, not to mention why, month to month plans work. Otherwise, you might be in store for a real shock on your second or third electricity bill when it arrives in the mail.
About Matt and TexasElectricityRatings.com:
Texas Electricity Ratings was created specifically to act as a place where customers could come to share and read about individual personal experiences with the different Retail Electricity Providers operating in Texas, as well as compare prices and plans these companies have made available. Until Texas Electricity Ratings, there wasn’t a single site where people could come to review all of these things, as well as take an active hand in the electricity market themselves.
Video Help from Bounce Energy
You may also view the following video on how to shop for month-to-month variable rate plans. This video will help you get an understanding of the pros and cons of these plans.
The views and opinions expressed in this blog/article are those of the guest writer, not necessary the opinion of Bounce Energy. For more information on being a guest writer for Bounce Energy, please email us at web@bounceenergy.com.
Follow @BounceEnergy
