How should you shop for cheap electricity in Texas in 2021? Very carefully
By Dave Lieber February 24, 2021
In the aftermath of the Great Snow Storms of 2021, Texans have realized how crummy our electricity system is. The Watchdog has issued warnings and exposed flaws for more than a decade. It’s been a lonely fight.
Most importantly, I’ve tried to show you how not to overpay on your bill — which, considering the complexities, is very easy to do. We’re going to cover a lot of areas in this update. First, let’s look at some basic rules.
Rule No. 1: Shopping for a retail electricity company in deregulated Texas is serious business. You need to read this power guide and know that if you commit to the wrong contract, you might be overpaying. The system is designed to lure you in with a low kWh (kilowatt-per-hour) rate, but learning how much the actual bill is can be more complicated. Why is that? The add-on fees that you have to work hard to find. More on that later.
Rule No. 2: Only go with a plan that has a “fixed rate.” The alternatives are a “variable rate” which floats up and down with the market. Steer clear. And there’s an “index rate” which is tied to an economic index. Forget that, too.
Rule No. 3: Don’t only look at the kWh rate. Read the “Facts Label” and the “Terms of Service.” This massive amount of fine print tells you the real story, especially what the add-on fees are. One study showed that electric companies have come up with 28 different add-on fees. Proponents of the system say we have the lowest rates. Not so when you add the fees.
Rule No. 4: Use the state’s PowerToChoose website to start. Funny thing about the state-sponsored site, though. A typical electricity plan will state “No hidden fees,” but when you read the fine print in the terms you see they charge $5 for a phone call to customer service or $20 if you ask them to send you a copy of an old bill. Just two examples. By the way. some electric companies use the phrase “power to choose” to buy ads online so you think you’re at the state site, but you’re not. Go directly to PowertoChoose.org.