Yesterday, an acquaintance, who will remain anonymous, advised me that their electricity contract was about to expire in a few days. I learned the contract was with one of the legacy providers for a 24 month term and no switch was planned nor being investigated or considered. The party stated all was fine and there was no reason to choose another provider. Little homework had been undertaken to even determine what rate plan product and term would be selected for the renewal. WRONG!!!
Our discussion continued to reveal the individual really didn't know how to read the monthly bill and wasn't familiar with the customer protection features contained on the statement since 1 April, 2010, i.e., total usage stated in kWh, rate charged, average price (inclusive of all fees and charges less taxes) paid for electricity for the month in format 0.00 cents per kWh, and contract period. For months past, the bill was received and paid without any real review. WRONG AGAIN. I say all need to be more knowledgeable and attentive to these details.
I inquired about the past twelve months history of usage for the account. That was unknown. Not all the records had been retained for file. That data is very important because of the tiering of rates into usage increments by most REPs (500,1000,1500,2000) as shown on the EFLs (Facts Labels).
Many REPs assess added charges for low usage any given month. Those charges inflate average price. Generally, REPs assign higher kWh prices to lower usage tier and lower prices to the higher usage tier. In my opinion, this is an industry gimmick and a misleading practice that favors only the REP. It permits the advertisement of a lower price at the 1000 kWh usage level on Power To Choose (PTC) and generates more revenue. A flat rate inclusive of all charges with no tiering would be more acceptable. Some REPs follow that practice.
In the case of this account for the past twelve months, 1 month fell into the bracket 1001 to 1500 kWhs, 4 at 1501 to 2000 and the other 7 months usage exceeded 2000 kWhs. Likely, no low usage added charges applied to this account, but this account isn't the average residential usage account. Incidentally, the PUC requires all TDSPs or TDUs (CenterPoint, TXU, etc.) to provide to the customers the past 12 months historical usage data on their websites. You don't have to file all your bills if that is your preference. The info is available online.
Finally, this person was intending to contact the current provider and decide then what to do on the renewal. WOW, REALLY WRONG. On this date, 11 other REPs offered much lower rate prices with the very same reliable service for a 12 month fixed rate plan.
At time of contract expiration, the responsible person in every household needs to study the current market and seek out the REP of their choice with the lowest price if this competitive market is going to work to our advantage. Bluntly speaking, complacency and skepticism must vanish.
The merits of using Power To Choose to do your homework for selecting a new REP and instructions on how to do so is well covered in earlier postings to this blog. PTC is your best tool. If you need help contact the PUC Call Center at Toll-free 1-866-PWR-4-TEX (1-866-797-4839).
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