Power to Choose Electricity Companies
The power to choose electric companies was given to consumers in Texas in 2002 when Bill 7 (SB7) was passed in the Texas Senate, deregulating the state’s electricity market. This was expected to reduce Texas electricity rates significantly and provide cheaper electricity to consumers.
While the jury is still out on whether this has been good for Texas energy consumers, the fact remains that Texas electric choice is here and growing. There are quite a number of Texas electric providers that offer different electric rates and plans to private and corporate customers. The electricity choice for Texas can actually be a bit daunting for the casual consumer, who might have difficulty to compare electricity prices between the various electricity companies in Texas.
There are a number of points one should keep in mind when attempting to compare electricity rates in Texas. There is of course the basic parameter of price per kWh, which is what most people end up using to make their choice. This is, however, not necessarily the wisest way to make a selection.
First of all, the environmentally conscious should be aware that some electricity companies offer rate plans which are based on green energy only, or that include renewable energy in their portfolio.
In addition, it’s important to be aware that there are several different types of electricity rate plans: fixed, variable or indexed. As the names imply, fixed rates will generally not change throughout the contract, whereas variable rates will normally fluctuate from month to month based on electricity prices (although the way in which they fluctuate is defined differently by different electricity providers in Texas). An indexed rate is one which varies according to a formula as determined by the Texas electric provider. Every individual will have to decide which rate type is best for him or her.
Fixed rates will normally be higher than variable rates at a given point in time, although if electricity prices go up, so will the price you pay for it if you have a variable rate plan, whereas a fixed rate plan will stay at the same price throughout the duration of your contract with the electric company. Conversely, if power costs go down, the clear advantage is normally with the variable electricity rate plan.
Some electricity providers in Texas also have hidden costs, such as termination fees. Make sure to ask the representative from the electric company you’re considering how much of a “fine” you’ll have to pay if you break the contract if you’re not pleased with the service or if you move.
In view of the above, it’s of particular importance to find a good service to help you compare Texas electricity prices and rate plans as offered by the different Texas electric providers. There are several such services available, although not many will provide you with ALL the information you need about ALL of the Texas electric companies providing service in your area.
Source by Igal Nevo, Ph.D.