With so many retail energy provider choices in deregulated areas of Texas, comparing electricity rates can be tricky. Many customers don’t realize that when comparing rates, they are not comparing apples to apples (more like apples to bananas).
Comparing Texas electric rates is not as easy as looking at one company’s rate vs. another. You need to do a little homework first. Are you looking at the energy charge rate or the average rate? Is the rate bundled or unbundled? Or is the rate you are being quoted based on a usage of 2,000 kilowatt hours (kWh), 1,000 kWh or 500 kWh? All these things make a big difference.
Find the Average Rate
The best way to compare rates is to make sure you are looking at the “average rate.” This includes the energy charge rate and the fixed fees (before taxes). Some companies will only display or quote you the energy charge rate, which obviously is less before you factor in the fixed fees, such as a base charge and the delivery charge from your local delivery company, for example, Oncor in North Texas. Be careful of this because some companies will display a low energy charge rate only to show way too high of a delivery charge.
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The average rate is displayed on most bills like this: “The average price you paid for electricity during this billing cycle was 11.5 cents per kWh.” This is the rate you want when comparing other companies’ rates. The Reliant Energy bill example below shows an energy charge rate of 11.5 cents per kWh but an average rate of 15.1 cents. That’s a big difference when you are using 1,000-2,000 kWh.
Compare Rates at 1,000 kWh Usage
The most common kWh usage over a 12-month period is 1,000 kWh. Of course, your usage will likely increase during the summer and decrease during the fall and winter. But 1,000 kWh is a good average to use when comparing rates. Again, some companies will quote you a rate based on 2,000 kWh of usage, which would obviously result in a lower average rate when compared to an average rate at 1,000 kWh usage. Why? Because the fixed fees get stretched out more over 2,000 kWh than they do over 1,000 kWh.
So, make sure you are comparing average rates at the same kWh of use. Again, different companies display this differently on their bills, so you have to know what to look for.
Make Sure It’s Not a Variable Rate
Variable rates can change at different times of the year. Locking in a fixed rate over six, 12 or 24 months is almost always cheaper. But if you are on a variable rate plan, make sure you are not using your most recent billing cycle rate when comparing it against a fixed rate. These are two completely different things.
One leading retail energy provider that takes the guess work out of comparing planes is Ambit Energy. Currently the sixth-largest energy company in America, Ambit clearly displays average rates for you to check out. And you can even toggle between different kWh usage to see what your rate would average out to when using different kWh.
The Ambit Energy Texas rates and plans example below shows the average rate at 1,000 kWh. You can also see the energy charge rate in the plan description. And the buttons at the top allow you to toggle between kWh usage and automatic billing. With Ambit, the e-plan automatic billing saves you .2 cents per kWh.
For more on Ambit and more tips on finding the right provider and rate for you, visit www.JoinAmbitiousEnergy.com.