Residential electricity has gone through a major change in the past couple decades. That change is known as deregulation. Deregulation opened up the energy market to competing businesses that offer different energy plans to consumers. How does this affect you? It gives you choices. Residential electricity is now an open market, where you can compare and shop for the best prices on the energy your home needs.
All electricity is the same, so why should it matter who sells it to you? The biggest differences between plans are not the quality of the electricity itself, but rather the details of a specific plan, the generation of the electricity, and the distribution of it. Residential energy plans vary in their contract length, price, and features, but the core of it, the electricity itself, always remains the same.
How does this help you? It allows you to pick and choose what goes into your plan. Think of it like buying groceries. You can buy a steak from two different processing plants, but the amount of packaging, the distance the meat has to travel, and the cut of meat all affect its price. At its core, it’s still steak. But is it redeye, flank, or prime rib? With energy plans, some offer more features than others, and this can affect their price. Two plans may both have a three month contract term, but one offers a $25 credit on your first bill and the other doesn’t. The one offering the credit is charging a few tenths of a cent more per kilowatt hour than the plan which offers no bonus.
This kind of bundling of plans is pretty common throughout the energy market, but don’t let it discourage you from exploring your options. With Shop Texas Electricity, we provide you with easy access to the energy plans in your area, including highlights of the plans, as well as the electricity facts label (EFL) for each and every plan. Knowing exactly how a plan works and how the average price is derived will help you understand how best to utilize the energy plan.
Some plans offer a very low rate, but only if you use a certain amount of electricity, such as 500 to 1000 kilowatt hours. Anything above or below that range could drastically change the actual rate you would pay, by as much as a few cents per kilowatt hour. Other parts of your bill could be affected as well, such as the base charge for service. Some companies waive this charge if you use a certain amount of electricity or more.
Electricity plans offering special incentives like bill credits, “free” thermostats, or other offers usually build these into the cost of the plan. While it can be tempting to go for such a plan, thinking you’re getting a good deal like an expensive Nest Learning Thermostat, you have to consider that you might actually pay a lot more than the incentive is worth over the course of your contract term.