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Home News-Telegram News How to save 40 percent on your electric bill: Now may be a good time to review the rates you pay

How to save 40 percent on your electric bill: Now may be a good time to review the rates you pay

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With the hottest days of summer dogging utility bills, City Manager Marc Maxwell suggests it may be a good time for local homeowners to review the rates they pay for electricity.  “There are currently seven fixed-rate plans available in our area for 10 cents per kilowatt hour or less, and that price is guaranteed for 12 months,” says Maxwell. “Compare that price with the average cost per kilowatt hour listed on your bill. Some consumers can save 40 percent or more just by switching to a more competitive plan.”

It can be even more than that, in fact. Maxwell recently helped a friend’s elderly mother select a new electric company. After reviewing her options, she was able to drop her kwh (kilowatt per hour) charge from more than 15 cents to just over 10 cents.

Ever since the Texas Legislature deregulated the industry in 2002, Texans have been able to choose their own electric provider and plan from dozens of options. And for those who worry that a company may not be reliable, there’s no need to fret, Maxwell explains  — it all comes across the same power lines.

“It makes no difference who you buy the power from because the company you buy the power from does not deliver it, Oncor does,” Maxwell explaines. “Whether or not your power goes out, it’s Oncor’s issue.”

All the options are available via the internet at www.powertochoose.org. Enter the zip code of the  address where the electric service is provided, and a list of options pops up. Currntly, the prices for 1,000 kilowatt hours — about a month’s worth of energy in a small, efficient home in a cool month— can run from $89 to $149, depending on the provider chosen.

Mind you, the sheer volume of options can be daunting, with some 81 different fixed rate options avalilable alone. But it’s definitely worth looking into, since Texans pay some of the highest rates in the nation. In 2008, for example, the average monthly bill for summertime usage was $220, comapared to the national average of about $160.

For example, today there are about 40 fixed rate plans available with an average kwh price of less than 11 cents. They range from Ambit Energy’s 8.9 cents for a three-month minimum, with a $100 termination fee, to Green Mountain Energy Company’s 10.9 cents per hour charge with a minimum of six momths and a $150 fee.

Why would someone opt to pay the higher price? In this case, it would be environmentally based reasons — only 4 percent of Ambit’s energy is from renewable sources, compared to 100 percent for Green Mountain.

The point, Maxwell said, is that there are a lot of people who could be paying far more for energy than they have to, and they have the right to see what’s on the open market.

“Many elderly consumers are especially susceptible to paying over-inflated rates,” Maxwell points out. “Sometimes they stay with their longtime electric company out of a sense of loyalty. Others simply lack the computer and internet experience to be able to compare rates easily.”

Maxwell points out that there are a few things to look out for. Before switching, find  out if your current company is going to charge you an early termination fee for leaving. If you are subject to an early termination fee, it may or may not be worth it to change. You will have to do the math to determine if the switch is worth it.

Also, some electric companies charge a monthly “meter charge” or “customer charge,” while others do not. For example, StarTex Power does not charge a monthly fee for its 9.4-cent month to month plan, but Ambit Energy charges $9.99 per month if you use less than 1,000 kwh per month.

“Know before you buy,” Maxwell said. “Regardless, any consumer who hasn’t ever compared rates should take a look at what else is out there.”

 

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