How Can I Avoid Hidden Fees on My Electricity Bill?

November 13, 2019 Published by Categorized in: Tags: , , , , , ,

Each month, many of us look to save money on our electricity bill, yet don’t take the time to drill down and understand each and every aspect of the charges due.

Thankfully, there’s a way out of that conundrum. It starts with learning to read your Texas electricity bill.

We want to help you understand the difference between delivery charges, the cost of electricity, fees, and more. Figuring out the stuff you can’t change to focus on the stuff you can, gives you a clear path forward to lowering your energy costs.

How to Read Your Average Texas Energy Bill

In Texas, each individual Retail Electric Provider (REP) takes care of the billing and payment receipt for all of its customers. That means each REP can create its own way of formatting the information you see on your bill. And since Power Wizard isn’t a REP, we can’t show you a sample bill from each of the companies serving Texas energy customers.

But what we can do is explain the core charges and fees, that everyone does see on their bill – no matter how it’s presented.

Our thinking is simple: if you know what you’re being charged on a regular basis, you can better recognize when hidden fees actually appear.

Energy Charge

This is the core part of any bill. It’s the amount you need to pay for the electricity you used during any given billing cycle. It’s typically calculated by multiplying the energy you used in kilowatt-hours (kWh) by the energy charge for your plan. For example:

  • You’re on a 12-month fixed-rate electricity plan.
  • That plan has a rate of 10 cents per kWh.
  • You used 1,000 kWh during the most recent billing cycle.
  • 1,000 kWh x 10 cents per kWh = $100.

Thus, your energy charge portion of your bill would be $100. This is far from a hidden fee because you’re paying for the energy you used.

Base Charge

To be clear, not every REP charges a flat fee. Some do with no exceptions. Others do, but you can get that charge waived if you use over a certain amount of kWh during a billing cycle. While this isn’t a hidden fee, it’s one you could look past when signing up for an electricity plan. You can check if your REP assesses a base charge by reading the Electricity Facts Label (EFL) for your plan.

TDU Delivery Charge

This charge represents what the utility company for your area is charging your REP to actually deliver the electricity to your home. It’s calculated by first multiplying your energy usage in kWh by a set amount per kWh determined by the utility company, and then adding a flat fee. And it’s not a hidden fee, as every REP will place this charge on your bill because every Texas energy customer has to pay them.

Unfortunately – there’s nothing you can do to waive or avoid this charge, so it isn’t a hidden fee. It’s set by the utility company, and it’s the same for every customer in its service area. This fee is used to maintain the infrastructure of the energy grid – lines, poles, meters, etc. You could use ZERO kWh in a billing cycle, and you’d still be assessed the flat portion of this fee due to the upkeep of the poles and lines in your area.

Miscellaneous Charges

Here’s where we get into the stuff that could be seen as a hidden fee. Not only are these charges not related to your energy use, but many of them aren’t even attached to your REP or the utility company for your area. The bulk of them are assessed by the Texas Public Utility Commission (PUC) or ERCOT, the Electric Reliability Council of Texas, the two governmental organizations responsible for taking care of the Texas energy grid. They include:

 

  • Gross Receipts Reimbursement
  • Advanced Metering System Surcharge
  • PUC Assessment
  • System Benefit Fund
  • Nuclear Decommission Fund Fee

 

For more detailed information about those charges – including why they’re assessed – we recommend visiting the PUC website. Most of these are flat fees, and everyone has to pay them on every single bill.

The other charge you need to look out for on your average Texas electricity bill is the dreaded 5% Late Fee. This one is pretty obvious: if you paid your last bill late, your REP will hit you with this processing fee on your next bill.

However, you could have success getting it waived. But whether or not the U.S. Postal Service delayed delivering your payment or there was an error in the online processing systems, you’ll need proof that you did try to make your payment in a reasonable amount of time, before asking your REP to waive the fee.

Awareness is the Key to a Lower Electricity Bill

Ultimately, the only way to truly avoid hidden fees and lower monthly electricity bill is to pay attention to what’s happening. That’s why it’s important to look at your bill each month. If things look off compared to recent months, then they probably are.

We’re not going to tell you that you’ll never see hidden fees on your Texas electricity bill. Power Wizard can’t and won’t vouch for every single REP, as the strength of service lies in not playing favorites. But since we aim to be the best possible advocate for Texas energy customers, it’s our duty to explain the charges you might see on your energy bill.

If you discover a fee or tax on your bill that you don’t see in this article, talk to your REP about it! If they don’t respond in a timely manner to your questions, report them to the PUC. No one wants to pay for something they aren’t supposed to.

That being said, most of the charges you see each month are either flat fees everyone pays or the charges you’re assessed for your energy usage. Once you come to a greater understanding of what’s happening with your monthly bill, it’s easier to find ways to shrink it.

And it all starts with using less energy.

But if you still don’t see a smaller energy bill, even after you become more energy efficient and actively use less electricity, then it’s time to find an electricity plan with a long-term fixed rate. This is where Power Wizard can make the difference. We review your unique energy profile, and then search hundreds of plans to determine which one will help you lower your electric bill each month.

Learn more about Power Wizard today! We want to help you find a great Texas energy company that clearly communicates its billing system, so you can avoid hidden fees!

 

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