About Texas Electricity Bills
The majority of Texans live in an area where the electricity market has been deregulated allowing them to shop for competitive electric rates. While some parts of Texas remain regulated, large cities such as Houston, Dallas, Fort Worth, Corpus Christi, and Brownsville, host over three dozen energy rate plans for consumers to choose between.
If you are new to Texas, your electricity bill options could get a little confusing. The first thing to know is that your electricity bill is divided into two sections: delivery charges and energy charges. The delivery charges are charged by your local utility for transmitting the electricity over the power lines. In Texas, the charge is often in the form of a set monthly fee. Electricity bills will list the delivery charge as a TDSP charge, which stands for transmission and distribution provider.
The local utility companies are given the responsibility of maintaining the power lines and responding to power outages and emergencies. Though Texans have a choice of who to buy their electricity from, they do not get a choice of who delivers that power to their homes. The delivery of electricity remains a regulated by the Texas Public Utility Commission. No matter which electricity company you choose to buy your power from, your delivery charges will be the exact same. Your local utility company informs your electricity provider of how much you owe for power delivery every month, and then the provider passes the charges onto you in the electricity bill.
The second part of the electricity bill is the supply section, which makes up the majority of your bill. This is the part of the bill where consumers have a choice and can shop for the lowest electricity rate, or other purchasing incentives that might include contract length, renewable energy sources, or other rewards programs. When shopping for low electricity prices, it is important to look for the fixed rate and monthly charge, both of which are stated on the offer’s “Electricity Facts Label”.
By Texas state law, every electric rate offer must have an Electricity Facts Label which states all of the charges associated with rates. Some providers will offer a low rate with a high monthly charge, in addition to the delivery fee, in hopes that shoppers will not pay attention to the extra charge. However, a $5 monthly charge for a customer who uses an average of 1,000 KWh a month will wind up paying half a penny more on a rate; So a $0.082 rate with a $5 monthly charge will end up being a total of $0.87. Perhaps while shopping for the lowest electric rate you chose this offer over a rate of $0.0855 with no monthly charge thinking it was the lowest price. In reality, the $0.0855 with $0 monthly charge would be the best offer.
If you are trying to lower your Texas electricity bills in the coming months, or even years, make sure you take the time to compare electric price offers through the electricity facts label. Offers are not always apples to apples. You can also use an electricity comparison site like ElectricRate.com so that you can see all offers on the same playing field.