Bay Area Houston

Before electricity deregulation consumers in the old HL&P area were paying just under 8 cents a kWh in a long term, no maintenance, contract. Now after 13 years of deregulation consumers have the ability to “Shop, Compare, Choose” according to the Public Utility Commission’s website, the PowerToChoose.org. Unfortunately choosing using the tools provided by the PUC is complicated and deceiving. Don’t take my word for it, even the Commissioner agrees. From Jim Malewitz of the Texas Tribune:

Donna Nelson, chairman of the Public Utility Commission, said Thursday at a public meeting. “They’ve [electricity resellers] got all these tricky little things in their prices, and whatever the fact sheets are called – the nutrition label – that makes it really difficult for customers.”

I’m putting the final touches to a presentation titled “How to Select a Cost Effective Electricity Reseller” and in doing so stumbled upon a plan that is about as close to what we had pre-deregulation. Is it the cheapest? Maybe not for your specific usage and your home but if you are looking for a no gimmick, no extra fees, no hidden costs, with a relatively low rate, this is the one for you.

Recommendation:
Discount Power has a 12 or 24 month plan at 7,.7 cents per kWh no matter how much electricity you use during the month. Many plans have variable rates, discounts and extra fees depending upon your usage during a specific month. It can be very complicated to compute a real rate and sometimes it isn’t as low as it seems, but knock yourself out if you want to try.

With this plan you have a long, no maintenance contract, at 7.7 plus tax. If you appreciate a relatively low rate, a longer contract, and no gimmicks, this is the one for you. Discount Power Saver No Gimmicks 24 signup can be found here. The electricity fact sheet is here.

BTW I do not receive any referral fees from Discount Power and I have signed up myself.

If you listen to to those who support Ken Lay’s electricity deregulation you might think choosing an electricity plan that’s right for you might be as easy as visiting the Public Utility Commission of Texas website, the PowerToChoose.org. Well it ain’t but go ahead and visit. Using the website, enter a zip code of 77062 and display the fixed rate, 12 month plans. Go ahead. I’ll wait.

The lowest rate displayed is by Discount Power for 7.4 cents a kWh, lower than what we were paying before deregulation, but it isn’t the rate you will pay if you select this plan. Open the Electricity Facts Label. I’ve written about this about a year ago. It wasn’t easy then and it’s harder now.

A year ago I created a spreadsheet to calculate the real rate based upon the kWh used, the penalties, and the monthly fees based upon my usage from last year. This year the tricks and gimmicks broke my spreadsheet. So I had to call Discount to understand their plan.

The rate for this plan is actually 11.64 cents multiplied by the kWh used, minus $45.00 if the usage is over 1000 for that month. Got that? And add the $3.05/month charge for electronic metering. This rate includes the TDSP delivery charges but not the taxes.

After many phone calls I gave in and extended by plan with PennyWise at a calculated rate of about 9.7 cents.  After all someone has to pay the middlemen with the complicated rates.

Electricity prices are not very easy to compare, almost impossible. Recently I evaluated the claims by Reliant Energy’s “Sweet Deal” plan. Here is an evaluation of TXU’s “Texas Choice 12“. The bottom line is that Texans should choose a different provider.

First this plan is advertised at 12.90 a kWh, a 3% cash back, and a $150 cancellation fee. Unfortunately that rate is for usage of 2000+ kWh per month. Most individuals would never reach that threshold to qualify for this rates. The rate for using between 1000 and 2000 is 13.60, which is what I used for my calculations. They also have a $4.95 monthly fee for the “privilege” of being charged for electricity. And don’t forget if you conserve energy and use less than 500 kWh per month, the charge is an outrageous 15 cents! From TXU’s website:

Based upon all of the above and my usage over the last year the bottom line is $1541.60 for the entire year with an average of  13 cents a kWh. That includes the whopping $38 cash back for the entire year.

I would rate this TXU Energy Texas Choice 12 Plan nothing more than a gimmick. Look elsewhere. There are much better deals. I went with PennyWise, but there are no guarantees the same plan exists today.

Now, how is that electricity deregulation ushered in by Enron doing for you?

Who proposed to deregulate electricity? Ken Lay and Enron. How has that worked out fer ya?

After a week of attempting to find the best electricity provider I finally selected one, but it wasn’t as easy as “shopping around” or visiting the Power To Choose website. Here is what I found:

1. PowerToChoose.org website lacks the PowertoCompare. It does not have the ability to truly compare prices which would include penalties for conserving energy, monthly fees, credit check fees, fees for auto deduction, or application fees.
2. Hidden fees. Many, if not all, providers will charge you a fee of $9 – $20.00 if you conserve energy and use less than 1000 kWh in a month. Last year I had only 4 months over 1000.
3. Not so hidden fees. Some providers simply charge a monthly fee ranging from $9 to $15. 
4. No PowertoCompare. The PowertoChoose There is no capability to truly compare rates. My poorly crafted spreadsheet accepted the cost per kWh, the monthly fee, and the penalty and calculated a cost per month based upon last years usage and the average cost per kWh. (I’ll blog the results later)
5. Other plans. The Power to Choose does not have all the plans available. I was able to select a plan when I found the company had other lower cost plans available. 
6. Auto deductions. Some providers will also charge you a fee, about $12, if you are not enrolled in an auto deduction program.
7. Reversed hidden fees. I found a couple of providers out of the hundreds available, that actually charges less per kWh if you are below 1000 kWh. This blew my spreadsheet, so I need to research this a little more.

Centerpoint energy actually has a website (mytruecost.com) that can compare prices based upon your usage over the years if you have an electronic meter. Unfortunately not all the electricity providers participate. There’s always a catch.

OK this is my last update on my saga of selecting a new electricity reseller.

As I said last time:

I have finally settled on Penny Wise at an advertised rate of 8.7 cents per kWh. It’s not without caveats.

Yep. The caveats got me. It turns out this great rate was based upon using 2000 kWh per month, a limit I have never achieved in my 2400 sq ft home. My usage has not ever topped 1500 and only 4 months out of the year have I been over 1000 kWh. The 8.7 cent rate was based upon using 2000 kWh a month, a detail buried in fine print. The real rate for those using less than 2000 is 9.2 which in my case, based upon my historical usage and factoring fees and penalties, comes out to 9.8.

So, 9.8 is only .2 over my last rate but I had to scrap to find it. I do remember the 7 cent rate I had for many years prior to deregulation, but someone has to pay the salaries of the middlemen resellers.

Shopping around for an electricity provider isn’t as simple as comparing rates at the PowertoChoose.org. It’s easy if you mindlessly accept the lowest cost per kilo watt hour without reviewing the hidden fees or penalties.There are hundreds of plans available with enough options to make you think electricity deregulation has been a complete failure. (it is)

After a few hours of research, which included creating a spreadsheet to compare plans based upon last years usage, I found the following about the plans available:

1. Hidden fees. Many, if not all, providers will charge you a fee of $9 – $20.00 if you conserve energy and use less than 1000 kWh in a month. Last year I had only 4 months over 1000.
2. Not so hidden fees. Some providers simply charge a monthly fee ranging from $9 to $15. 
3. No PowertoCompare. The PowertoChoose website lacks the PowertoCompare. There is no capability to truly compare rates. My poorly crafted spreadsheet accepted the cost per kWh, the monthly fee, and the penalty and calculated a cost per month based upon last years usage and the average cost per kWh. (I’ll blog the results later)
4. Other plans. The Power to Choose does not have all the plans available. I was able to select a plan when I found the company had other lower cost plans available. 
5. Auto deductions. Some providers will also charge you a fee, about $12, if you are not enrolled in an auto deduction program.
6. Reversed hidden fees. I found a couple of providers out of the hundreds available, that actually charges less per kWh if you are below 1000 kWh. This blew my spreadsheet, so I need to research this a little more.

So, if you think it is easy to shop around, well it is, if you are willing to accept higher rates with hidden fees. KHOU has more on the hidden fees: