As a watchdog, I’ve spent more than a decade trying to teach Texans how to buy the cheapest electricity. It’s a gamble.
I’ve given out thousands of “cheat sheets” and tried to publish an online shopping guide every two years.
Studies show that many Texans pay too much for their electricity, and given the complexity of choices, pricing, and options, it’s no wonder. The 2024 Watchdog Guide to Buying Cheap Power was created to help consumers navigate the landscape.
But I got stuck. I’m tied to an electric co-op so I can’t shop like most people.
That’s where Plano’s Paul Hart comes in. Mr. Hart, 74, retired after a long career in information technology. A citizen of my Watchdog Nation consumer rights movement, he offered to help me create a new guide, so I thought I’d share some highlights with you.
watchdog alert
“I wanted it to be simple enough that anyone could do it within 15 minutes without thinking,” he said.
RELATED: One crusader vs. power broker’s lone battle: He feels cheated and won’t rest
For the first time, we’re publishing the latest guide for Oncor customers. You still need to choose a retailer.
Guide introduction
All electricity is the same, right? So why pay more than your neighbor? And why pay a broker $100 a year when you can make the decision yourself and do it in less than 15 minutes?
date of expiry
If you don’t choose a new plan before your current plan expires, it can be costly. New customer plans usually offer the lowest rates. However, when the contract expires, the price increases.
We recommend that you shop around and change to a lower-priced plan about two weeks before the expiration date.
basic
The state-run powertochoose.org shopping site, flawed but still useful, allows companies to offer a variety of kilowatt-per-hour (kWh) rates. Prices are 500 kWh, 1,000 or 2,000 per month. These numbers are not part of your bill. These are examples of average charges for specific electricity usage. They confuse almost everyone.
If you signed up for 12.1 cents and used exactly 1,000 kWh, your price for the month would be $0.121 x 1000 = $121. Every extra cent can add $10 to your bill.
detail
These numbers are not helpful, but each plan’s “Electricity Facts Label” or EFL is required and provides details about the plan. EFL includes core parts such as a base monthly fee, cancellation fees, rebate information, and other fees (what critics call gimmicks).
“Terms of Use” may also be displayed. Ignoring these fact sheets is at your peril. Understand the details before signing up for a plan, which is an actual contract.
There is also an Oncor fee for shipping, but you don’t need to worry about that. Everyone pays the same price.
Basic fee
Base prices range from $5 to $20 per month. Some companies do not charge a fee.
The average prices shown are only a rough comparison of plans. This is the source of a lot of confusion, especially since there can be hidden costs that need to be unearthed.
seasonal rate
Just like airline ticket prices, almost all companies’ electricity prices can change on a daily and even hourly basis. It is wise to lock in when interest rates are low. The opposite may not be an option.
Please pay attention to the season. Prices are typically lowest in the spring and highest in the summer. Avoid long-term contracts that start in the summer. If your current plan expires in the summer, it’s safe to make a shorter three-month plan for the fall buying season.
long term plan
Long-term plans range from 12 to 36 months. Without reliable multi-year forecasts, it becomes a guess based on intuition. If the rate is lower, go for it.
Variable rate plan
Hi. Prices may change monthly for these plans. At best, you’ll pay a little less. To make matters worse, interest rates may rise so high that your budget may be in jeopardy.
Cancellation fee
Once you sign up with a company for a set price, something better will come along. Cancellation fees can run into the hundreds of dollars. It may not be worth it. No cancellation fee will be charged if the change is made up to two weeks before the expiration date.
final note
These retail power companies you deal with do not generate electricity. They are the intermediaries between Oncor, the companies that supply your power, and you. These retailers negotiate prices with power generation companies to set the prices they offer.
Many websites can help you find the best deal for you. Some places charge a minimum fee. Some companies receive compensation from retailers for providing leads. Some sites pretend to be consumer-oriented, but are actually retail outlets.
Still, when signing a contract, it’s preferable to do it online rather than over the phone with a sales representative. why? The salesperson may mislead you into switching, but there may be nothing in writing. When you sign up on a company’s website, you should be able to get exactly what you choose.
If your plan isn’t listed on PowerToChoose.org, that could be a red flag. Vendors must be transparent and follow regulations to list their products on state websites.
Don’t be fooled by copycat sites that use variations on the term “power of choice” to confuse people who visit the wrong site.
On the left side of the site there is a menu where you can filter out what you don’t want. We recommend filtering for: Plans without minimums. Correction rate. Prepaid plans and time-of-use plans are not displayed.
One of the clues we’ve found that indicates strange business is when the difference between an average of 500 kWh and an average of 2,000 kWh is more than 1 cent.
Use simple strategies to choose a low-cost plan without any special tricks. You accept the final decision.
As I’ve said many times, it’s a gamble.
