With the deregulation of electricity in the Texas market, there are many electricity companies to choose from.  Approximately 300 providers at this time.  There is a website called Powertochoose.org that lists all of these companies.  The problem with sites like these is that electricity companies may advertise their rates differently.

Looking at this site as a consumer can be very confusing.  There is the “energy rate” that will be charged by the provider AND another charge going to the delivery company in that area.  This could be AEP, Centerpoint, TNMP, or Oncor.  On the bill…..these charges are listed separately.

What is most important when it comes to billing is- the total price per kWh, including the energy rate AND the delivery fees.  When checking rates on websites like these,  some companies are only going to advertise the lower number – the energy rate only.

Don’t fall for the Electricity Companies’ Scams.

If a company will not tell you the “total” price per kWh including the delivery fees, do not sign up with them.

I have seen this many times over the 7 years I have worked in the electricity market here in Texas.  A customer will sign up with a company because they advertised a very low price per kWh, and then they get locked into a contract most of the time.  When they receive the first bill they are shocked to find out the bill is exceptionally high.

After looking at this customer’s bill closely, everything “seems” normal. The advertised energy rate is correct…..then why is the bill SO high?  What you want to do now is figure out what your “actual rate” is.

Simply take the total of your bill (all fees included) and divide it by your usage (kWh used in that billing cycle)

For example,  if the total of the bill is $221.56 and the Kwh usage is 928:

Take 221.56 divided by 928 = .23875 or 23.8 cents per kWh total.

This customer was under the impression that they would be charged 12 cents per kWh……when their actual rate is nearly double at 24 cents per kWh.

I have seen examples where the customer’s actual rate was over 3 times the advertised rate.

How does this happen?

There are 3 entities involved here:

  • The power plant – produces the electricity
  • The delivery company – maintains the power lines, and delivers the electricity from the power plant to our homes, they also own the meters and they do the monthly meter reads.
  • Retailer – billing you monthly for energy rate and delivery fees

After reading the meter, the delivery company will send that bill to whatever electricity provider you have chosen. Your electricity retailer will then pass that charge onto you on your final bill.  If a company never tells the customer what the “total” price per kWh will be including all delivery fees, then some of these companies will take that delivery fee and upcharge it, and then put it on your bill.  That is how they make their money while hiding extra costs in the delivery fee.

I have seen it many times; a customer thinks they will be paying a super low advertised rate but they don’t know to ask what the total will be including all delivery fees.  If they don’t advertise or tell you the total, some companies go ahead and upcharge it as much as they want to.

How to Find the Best Electricity Provider

When shopping for a good electricity provider, make sure to find out both numbers.  You want to know the energy rate itself, and more importantly, the total cost per kWh including all fees.

Some companies will only advertise the TOTAL rate which may not seem like the best option at first, but if you look at “plan detail” to see the energy rate itself and how the fees break down, you’ll notice these companies have integrity and are advertising their rates properly.  No surprises when you receive your bill.

The problem with Powertochoose.org

It is deceiving because the lowest rate will show towards the top of this list.  But these super low advertised rates are the energy rate only, and not the total price including delivery fees, service fees, and many other hidden fees companies will not advertise.  It is deceiving, and picking the right energy provider can be intimidating, but not when you understand the game.

I hope this will help you make a smarter decision when it comes to your electricity provider.