My current 6 month fixed contract at 8.1 cents per 1000 kWhs expires within the next few days. This posting will report on the results of my study of the current market, some key findings and my personal decision to again switch providers.
First action undertaken was to investigate rate plan offers of my current REP and hold a chat with their customer service personnel to assess the possibility of a renewal. In this process, I learned no variable rate or 6 month product was being offered for my ZIP, within the CenterPoint service area.
My choices were either a 3, 12 or 14 month plan. The latter two had the exact same terms. The 3 month plan had prices 4 mils (tenths of a cent) lower than the longer term. I rejected off hand two green plans and the 24 month offer.
The 3 plans considered were structured with tiers for the 3 common usage levels (500,1000 and 2000). All plans imposed a $4.95 monthly charge for usage below 500 kWhs. Rate prices offered by this provider were well above low market for these products at this time. For this single reason I rejected this REP, but there are others.
I found that this provider reported on its own website an average price lower than what was reflected on Power to Choose. The price was marked by a very small asterisk and when reading the small print the price was qualified saying it represented 2000 kWhs usage. I believe this to be misrepresentation or a misleading tactic to entice sign-up.
Finally, a customer service agent with this provider offered me a product with a lower 1000 kWh average rate than those otherwise advertised plus a $25 first month bill credit if I would sign-up. Further questioning of that offer revealed unacceptable, more aggressive tiering of the rates that would have resulted in higher average costs.
Next, permit me to disclose another industry tactic employed by several REPs of advertising variable rate plans as low as 6.2 cents. I believe this is done so the industry can make false claims that the competitive market is working. I did take another look at month to month plans, although I don’t recommend them.
These low market 6.2 rate plans are mostly used as teasers or bait and switch vehicles to get customers on their rolls with intentions to switch them to alternative plans. Believe me, the REPs are not selling electricity to residential customers at this average price level.
One REP just began to offer this come-on plan. Its agent reluctantly acknowledged during inquiries that the applicable Terms of Service specified a switch after the first month to another variable plan in their portfolio with average rates ranging from 9.96 to 12.06 for the past year according to historical data required to be available on their website.
In the case of another REP offering a 6.2 plan, the Facts Label reflected rates for the 500 and 2000 usage tiers so radically higher that the average cost for the customer would have been much higher than the 6.2.
Now, to move on to fixed rate plan products. These are the safest to consider. The term is your decision. My search on Power to Choose and the websites of various REPs uncovered other tricks of the trade we all must guard against.
First, is the matter of bundling versus non-bundling. Have you noticed how many different formats are used by the REPs for their Facts Label (EFL) even though the PUC has standardized what information must be contained on the form. The extra hogwash is put there to confuse us.
The simplest, easiest to read and understand EFLs reflect bundling of the various charges. Some REPs are trying to mess with you by explaining pass-thru, smart meter, separate energy, hurricane recovery and other TDU unique charges approved by the PUC.
Average rate prices shown on all EFLs under each usage column are inclusive of all costs for your power, less taxes. If you find they aren’t, report the fact to the PUCT. Also, the price for 1000 kWhs should agree with what is posted on Power to Choose.
Let’s now discuss monthly service charges. I have found them to range from $4.95 to $9.99. Some are imposed as standard. Others kick in when usage drops below a specified level. All are gimmicks, in my opinion. They should be incorporated into the rate prices for simplification.
Beware of a particular REP that advertises on Power to Choose a rate price at the low end for its products to obviously lure customers, but after examination of the EFL for each plan you find the worst of average prices posted under the 500 and 2000 kWh usage levels.
The pinnacle of confusion was evidenced by a REP offering 28 different rate plan products. An idiot can see the motive here. When you call in as I did, most are usually sold the plan they want you to have within the parameters identified.
This Electricity Guy has again chosen a 6 month fixed plan with a new REP offering a rate structure of 8.5/8.2/8.0. The plan requires online sign-up, electronic billing and auto-pay via credit card for an additional $2 monthly fee. I readily agree to these terms in order to secure the lowest rates.
The plan chosen was advertised only on Power to Choose. To sign-up, it was necessary to click on the SIGN-UP icon on the Power to Choose webpage and be directed to a special site. The plan was excluded from the offerings on the REP's own website. Why do you think this is the practice followed? I know why.
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