When it comes to your electricity bill, understanding the rate per kilowatt-hour is crucial. After all, those pennies on your kWh can add up over time.
Thanks to deregulation, most Texans can shop in a competitive market for the best energy rates and plans. But it can take a lot of work to know where to start.
Know Your Meter
Whether you have a fixed or variable rate, your electricity rates are based on how much energy your household consumes each month. The amount you use is reflected on your monthly bill in total kilowatt hours, and you can track consumption trends on your electricity dashboard.
The best way to find cheap Texas electricity rates depends on your unique needs and priorities. For example, time-of-use rates charge different fees based on the times of day you use energy, with rates higher during peak demand periods (typically mid-afternoon to evening) and lower during off-peak hours. Running your energy-intensive appliances during off-peak hours can reduce your overall power costs.
Other factors that impact Texas electricity rates include seasonal demand, fuel prices (natural gas and coal), and transmission distribution utility (TDU) fees. TDUs manage the infrastructure — meters, wires, poles, and cables — that deliver electricity to homes. These fees are added to all plans regardless of which retail energy provider you choose.
With many options in deregulated markets, it’s essential to understand that there is more to a plan than just its price per kWh. Read the fine print to ensure you don’t end up with hidden charges or a contract that costs more than expected.
Know Your Utility Company
In a deregulated electricity market like Texas’s, the transmission and distribution utility (TDSP) is separate from your retail electric provider (REP). The TDSP handles the physical delivery of energy to your home or business. However, it is the REP that will ultimately determine your electricity rates.
You can find out who your TDSP and REP are by examining your most recent electricity bill. You’ll want to note the plan details and charge summary sections. Your ESID, or Electric Service Identification Number, will also be listed here, although it doesn’t appear on your meter. This is your unique identifier on the Texas electricity grid, and it tends to remain the same.
The TDSP is responsible for sending your meter readings to the REP, which then calculates your energy charges based on those usage levels and the information in your ESID. This is how your average price per kilowatt hour is determined.
As a homeowner, you must know how to compare your options, select the best electricity provider, like EnergyPricing.com, and plan for your needs. Tools websites are great resources because they allow you to enter your preferred preferences and see your top local options in one place. You should also pay close attention to factors that impact your electricity rates, such as contract length, seasonal fluctuations, fuel costs, and demand.
Know Your Plan
You can choose your retail electricity provider in Texas’ deregulated energy market. But you’re also responsible for choosing the right plan for your needs and budget.
Many different types of plans exist, including fixed-rate and variable-rate energy options. Fixed-rate plans charge a fixed amount per kilowatt-hour for the duration of your contract. Variable-rate plans, on the other hand, are linked to market conditions and will fluctuate by them. If you decide to go with a variable-rate plan, be sure to read your contract carefully to understand what to expect.
Another essential thing to remember is that your local transmission and distribution utility (TDU) is still responsible for delivering electricity to you. The TDU manages the state’s electricity grid and maintains power lines. Regardless of which plan you select, the TDU will charge a delivery fee that is added to your overall bill.
Before you sign up for a plan, take the time to compare the rates and other terms available in your area. Consider factors such as price per kilowatt-hour, contract length, cancellation clauses, and the company’s history and customer service ratings. A tool can help you find a plan that fits your home’s size and usage. Its unbiased algorithm considers your home’s characteristics and your past energy bills to make recommendations in minutes.
Know Your Options
In Texas, you can choose your electricity provider because of energy deregulation. That means you can compare different electricity plans and rates to find the best option for your needs and budget.
But before you select a plan, it’s essential to understand what factors affect your electricity rates. One factor is the price per kilowatt-hour (kWh), but other fees can add up quickly.
For example, the electricity company may charge a delivery fee that’s added to your monthly bill. And it’s essential to understand your household’s energy usage to help you choose the right plan size. Then there’s the seasonal demand, which can cause electricity prices to increase in the summer months as people turn on their air conditioning more often. Finally, there are the fuel costs for generating electricity. The prices for natural gas and other fuels impact the wholesale market’s electricity rates.
Another thing to consider when evaluating electricity providers is the company’s history and reputation. The number of customers a supplier has, its stability, and whether it offers customer service in your area can all influence your decision.
