Archive for Energy

Hidden Fees and Charges

A tricky issue when a Texas energy consumer is a savvy shopper and is looking for the cheapest Houston electric provider is the issue of hidden fees and charges. There are only a small handful of Texas electric companies that practice hiding their fees and charges but they are out there. Even though there have been lawsuits against some of these electric companies it just isn’t enough to stop this practice. The PUCT has setup several rules to protect the Texas energy consumer but for commercial businesses in Texas it can be a little harder to receive the same type of protection. For small commercial business you have just as much protection as a residential energy consumer which is actually quite a bit. You simply need to make your complaint heard by faxing or emailing the PUCT of Texas with the issue you are having with a unethical electric company.

So far we can clearly point out 3 electric providers in Texas that are obviously duping their residential electric customers into false rates. We will stay away from naming names to avoid the legal issues that can sometimes be caused by this but we believe by explaining some of the tactics you the consumer will be able to avoid these deceptive trade practices. There are enough consumer complaints on the Internet when doing a search about some of these electric companies to clearly point out which electric providers are to blame.

Two of the Texas electric companies we have pinpointed have hidden the TDSP charges by simply not disclosing these fees when selling a residential electric rate online or over the phone. You will have a hard time calculating what their electric rate is when looking at their facts label or any other piece of information like the terms of service or energy contract. We pulled up one facts label that supposedly averaged all fees and charges but even the Texas electricity providers facts label had failed to average in the TDSP charges. We verified this by calling the electric company in question and asking them if the TDSP charges were included in the facts label. It was strange that these pole and wires charges were hidden from even the facts label as the point of the facts label is to bundle all charges together to give the energy consumer a complete picture of what the total charges would look like. Since they are one of only 2 providers out of over 30 we known of that have hidden their electric service charges in this way we find it hard to believe that their business model isn’t based on keeping the customer in the dark about what the total bundled rates looks like.

There is another provider in Texas that also leaves off the pole and wires charges and their excuse is that the unbundled rate is how they do it in several other states and they are just carrying that practice over to Texas. This just doesn’t fly with me as they know that almost every other provider besides the one mentioned above bundles all fees and charges. We find the practice of signing up customers on an electric rate they  know will be perceived as several cents cheaper than the competition isn’t right. What would you do if you thought you would be paying a rate 3 cents cheaper than the surprise electric bill you receive? Most consumers would be very upset but these electric companies are playing the numbers and large business volume game. If they have a few disgruntled customers they really don’t care. As long as they are obeying the rules and laws even if through a loophole they will continue the practice.

You can fight this type of deceptive trade practice by contacting the Attorney General of Texas and writing a detailed complaint with any evidence about what the electric provider in question has done.

The final electric provider that we want to discuss confuses the residential electric service customer and commercial customer in a slightly different way. This company provides the TDSP charges in their rate but they have a fuel surcharge that can go up or down with fuel prices. Even if the customer has signed a fixed Texas electric rate agreement they may have a higher rate when they get their bill if fuel prices go up. Fuel prices eventually always go back up so who really believes this is a “fixed electric rate”? This company has been sued multiple times but has settled out of court with all their customers and continues to sell electricity in this way.

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June 17, 2009
Filed Under: Energy

Consumer Information on Texas Electricity

Consumer Issues Facing the Texas Retail Electricity Markets

I found a list of sites that explain consumer issues in regards to residential Texas electricity that are becoming a problem in the deregulated state of Texas. Although not all Texas electric providers and in fact most do not participate in tactics to mislead consumers there are some disturbing trends that crop up every once in awhile that need to be addressed. Unfortunately the Public utility Commission of Texas can only investigate an issue if the wronged consumer files a detailed complaint with as much evidence as possible. Most electric service consumers do not take the time to file complaints with the PUCT so nothing really gets accomplished to ban certain marketing practices Texas electricity providers will employ to sell electricity service.

Examples From the Past

For instance, last summer National Power Company offered a fixed electric rate on the state’s Power to Choose website and thousands of customers signed up for this rate because it was the cheapest price out there. National Power could not honor the rate because fuel prices increased and sent out a notification saying the electricity price would have to go up because fuel prices had increased. The issue is that an electric company should hedge enough energy to honor any fixed rates they promise their customers. The PUCT investigated several reports that National Power electric service customers had given in regards to NPC refusing to honor the low priced electricity rate. This would have forced these energy consumers to sign up with someone else at the top of the market at around 16 – 17 cents per kWh.

Fraudulently Advertised Electric Rates and Fixed Rate Terms

There are a couple of issues going on the summer of 2009 but are not easy to find as most Texas electric companies now know they can’t advertise a fraudulent electricity rate on the state’s website and get a way with it. Instead a few electric companies will advertise a “too good to be true” offer on Google or Yahoo ad network. The energy companies site will advertise a rate several cents cheaper than everyone else although they will leave off the TDSP charges. The argument made is that the Texas retail electric provider is not responsible for the TDSP charges so they do not have to include them. This is true however most Texas electric companies will bundle the TDSP charges in the rate so the consumer knows exactly what the total charge will look like.

Not Bundling in TDSP Charges a New Tactic to Show a Lower Electricity Rate

A Texas consumer that ends up on one of these sites that does not bundle in the TDSP charges will most often sign up on the electric rate only to be surprised on their first months bill where the Texas electric rate is several cents per kWh higher. The PUCT needs to step in and ban this practice. The PUCT should require that all retail electric providers disclose what the total bundled rate will be. For instance, on Trickster Energy’s website they show a facts label that has a 7.5 cents per kWh charge and a 10.1 cents per kWh charge in the facts label on their site. You would assume that the total bundled rate is the higher of the two charges. Everything seems legit until you call the sales agent with Trickster Electric Company. The Trickster sales agent explains that the 10.1 cents per kWh does not include the TDSP charges but she did not mention these additional charges until I questioned if there were additional fees and charges.

Sales Agent With Trickster Energy Keeping TDSP Charges a Mystery

The sales agent with Trickster went on to say that they are not responsible for the additional TDSP charges because those are charged by Oncor Electric Delivery and they only pass those charges through. She said she had no idea what those charges would be for a residential home. If you call multiple other electric providers in Texas they know that the charges will average between 3 – 4 cents per kWh and will usually fix those charges and bundle them into their electric rate.

Don’t Fall for These Super Low Texas Electricity Rates

Many Texas energy consumers have fallen for these fake low electricity prices. It is important to voice your complaints with the PUCT and send as much evidence of this issue to the PUCT by fax. Electric bills, advertisements and a long essay on what the electric company told you is a good way to start. You can file a complaint now with the PUCT by clicking on the complaint form link.

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June 9, 2009
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Comparing Electricity Rates in Texas

Texas consumers can compare electricity prices with other providers besides just going back and forth between Reliant or TXU Energy. There are now multiple electricity providers to pick from but not all of these energy companies have ethical treatment of their customers. It is important to pick an energy supplier that has a clear energy contract and price advertisements. Some Texas electric companies will advertise a rate that is 4 cents per kWh or lower than most other electric companies. These providers will not include the TDSP charges when initially quoting your energy price. It is important that when talking with an electric company they are giving you a clear picture of what the rate will look like when you frist speak with them. You can learn more about comparing electricity prices with other reputable electric companies than just looking at TXU or Reliant electric rates by visiting this Texas Electricity Rates page.

When looking at different comparison charts that show the cheapest energy company it can be confusing when you see a commercial electric rate chart. A commercial energy chart will not have the TDSP charges as a part of the rate. The reason commercial rates usually have the TDSP charges unbundled from the rate is due to the company not knowing what you pay in TDSP charges. Every business pays a different pole and wires charge based on how they historically use their energy. If you give the provider a day or two they can pull your historical electric usage and find out what you normally pay for your TDSP charges. They can then bundle the pole charges with your energy only charge. By bundling all the charges you can budget and know exactly what you will pay for your Texas electricity service.

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June 1, 2009
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Houston Energy Service

Houston Energy Hub

Houston is considered to be the energy hub of Texas. Most people know that Enron really kicked things into high gear for Houston as they were one of the largest energy companies in the world. When Enron went out of business it was a big shock for everyone but it didn’t take long for entrepreneurs to create over 50 retail electric providers to go after a 25 billion dollar retail electricity market in Texas.

Energy Brokers

There are several hundred energy brokers and licensed aggregators operating in Texas now that compare electric rate for commercial businesses looking for a cheaper rate for their electricity service. Since the economy has started to suffer businesses are using energy brokers and consultants even more to add dollars to their bottom line.

Study The Hidden Details

Some trends in the retail Texas energy field have been in companies comparing electricity rates with multiple electric providers. Consumers have become concerned that not all electric companies are disclosing all the fees and charges in their rates. Having a reputable Houston electric company go through each electric providers contracts and study it for hidden fees allows a consumer to know they are picking a good energy supplier without a history of advertising misleading electric rates.

Compare With Other Companies

When comparing electricity prices it is important to look at Houston electric companies fixed rates with other fixed rates. If a company or home tries to compare a variable electric rate with a fixed rate they will notice that the variable rate is much cheaper than a fixed rate. The problem is that a variable rate can change and go higher after the first month. Be sure you compare variable electricity prices with other variable electric rates. Variable rates are tricky because they do not all follow a commodity market and some are raised arbitrarily by the energy company with no explanation even when prices have come down lower.

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May 27, 2009
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Houston Energy Providers

There are many Houston energy providers that sell residential electric service. Since Houston Texas is a deregulated city you can pick and choose among over 40 different energy suppliers in an attempt to find the cheapest rate. Your Houston energy is still delievered through the same pole and wires company which is Centerpoint Energy regardless of the energy company you choose. Be sure to watch out for a few common practices some residential electric companies have been known to do to make their electricity rate look a little better then it really is. Pay attention to monthly base charges. If the rate looks very cheap then make sure on whether they also have a monthly base charge. Estimate what you use on an average monthly basis in energy and divide the monthly base charge by that amount. Add the average to the rate and that will let you know if the advertised Houston electric rate still looks good.

Another practice Houston energy providers will sometimes do is leave off the TDSP charges from the residential electric rate and instead just show the “energy only” price. The TDSP charges are primarily demand charges and a smaller portion of that are costs associated with the meter, pole, and wires. Most residential electricity companies in Houston will show an all in rate that includes all charges and fees. When you call or read about a Houston electric rate try and get to the bottom of what all the rate has in it and what isn’t included.

Below are some Houston energy providers that are brave enough to advertise their residential electric rate on the government website “power to choose” for the public and government to scrutinize. National Power and Riverway Power had some electricity rates on the power to choose website a year ago and several thousand customers signed up on their rates. These providers attempted to raise their customers prices on a rate that was advertised as a fixed electric rate and the PUCT immediately took their companies off of their site once they realized the rate was not as advertised. Since this incident many companies and consumers have been a little more careful when choosing a Houston electric provider off of this site but we assume there is a little more research that goes into approving  Houston electric providers on this site to keep this type of situation from happening again.

List of Houston Electric Providers Confident Enough with Their Advertised Rate to Be Put on Power to Choose

Retail Electric Provider
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May 5, 2009
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No Deposit Electric Service

In many states in the USA you will find that electricity service is deregulated. This is a confusing concept to begin with as you may have bought your electricity from one monopoly provider in your area that owned the poles and wires, serviced the electric meter and read it and sent you the bill. For there to be 20 different electric companies to choose from doesn’t make much sense as there is still only one wire connected to a home or business from teh electric pole outside.

The way deregulation works is the government breaks up the monopoly but still lets them own and control the pole and wires. The pole company can pass through the maintenance charges on the electric bill but they cannot sell you retail electric service any longer. From this point forward electric service is sold through 20 or more electric companies. These energy suppliers buyt their energy from the state they are doing business in or a combination of buying commodity futures in the form of natural gas and other commodities as well as electric power from a pricing index managed by the state.

In Texas the organization called ERCOT manages the electric grid and electricity pricing index. The electric companies have to maintain a certain capital requirement in order to buy and sell electric service to their customers. The critical part of all this to keep and electric company from going out of business is to not take on a credit risk customer. If an electric provider decides to take on credit risk customers they must ask for a large enough deposit to make up for the possibility of the energy consumer skipping out on their bill.

Several other states besides Texas participate in the deregulation of electricity which has the goal of lowering electricity prices through competition. This lowering of rates through deregulation is still up to debate in some states but many people are starting to see that the deregulation process has helped in lowering the cost of electricity service. New jersey, New York, Illinois, Connecticut, Michigan, and a few other states are just some examples of states that have deregulated their electricity markets. There are still pockets throughout states like Texas and New York that are not deregulated but many places in these states are participating.

For a credit risk customer that needs electricity service some providers simply ask for very large deposit amounts to have electric service turned on. This is a polite or for some people not so polite way of declining them as a customer. A recent development in the US is the idea of pre-paid electric service. Some electric companies in Texas are doing this but the charges are based on estimated electricity usage and not real and actual usage so the consumers feel taken after a few months with the company. These energy companies usually have no long term contracts but the consumer is on the hook because the credit risk customer may find it very difficult to sign up with a traditional electric company since their credit is bad.

Another choice open to low credit score customers is the no deposit guaranteed electric service choice. This is a rate that is a little higher price then a low cost electric company but if the consumer pays their bill on time the first 3 months the electricity rate is lowered to the cheapest available option. The no deposit guaranteed option represents the most fair choice for a bad credit risk energy consumer. More can be read about no deposit electric companies at the guide here: Waiving a texas electric Company Deposit

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May 4, 2009
Filed Under: Energy