Have you looked at retail electricity prices lately?
On the suggestion of readers, I pulled up the state-sponsored marketing site — PowerToChoose.org (beware of imitators) — and it was like I stuck my finger in a wall socket. I was shocked.
For as long as The Watchdog can remember, the opening pages usually highlighted kilowatt hour rates of around 6 to 9 cents.Now the opening pages show double-digit pricing of 10 cents or more.
Prices of the two dominant players in the market — TXU Energy and Reliant Energy — offer an added jolt.
TXU shows one-year plans for 1,000 kWh around 12 cents. Another listed plan offers a 15.9 cents rate. On the TXU website, I saw different plans that varied from those presented on the state website. A reminder that with all companies, always remember to check both PowerToChoose and that company’s website.
Reliant shows plans on the state site from 13.4 cents to 15.2 cents for various kWh usage.
Another charge, the so-called Oncor charge for transmission to retail companies, jumped 19% in September. That means the mandatory fee for each kWh used grew from about 3.5 cents to 4.15 cents. That’s the first time I can remember the Oncor charge crashing the 4 cents a kWh barrier.
To compute your bill, if you use 1,000 kWh a month, multiply 1,000 times 4.15 cents. Then multiply 1,000 kWh by the retail rate you contracted to pay. Add the two together for total kWh fee. And don’t forget to add Oncor’s $3.42 monthly base charge on all bills on top of that.
Oncor tells The Watchdog the 19% increase, approved by the Public Utility Commission, is to help cover the cost of added equipment to handle North Texas’ growth.
Thanks to readers Jerome Giambalvo of Coppell, Doug Archer of Dallas and Phil Caron of Fort Worth for alerting The Watchdog about this.
Why such high prices? What do Texas experts say about these price jumps?
Ed Hirs, an energy fellow at the University of Houston, says the banning of Griddy, which sold power at wholesale prices, removed a major incentive for retailers to keep their prices down to compete.
He says the increase in natural gas prices we’re seeing is another cause because many Texas power plants run on gas. He blames hurricanes which struck the Gulf of Mexico.
He also blames the Texas government’s bailout allowing companies to recoup billions of lost dollars during the horrific February freezeout through the purchase of $6.5 billion in bonds. Those costs will be passed on to consumers.
When the Texas Legislature sided with companies over consumers, he said, “You know the game is fixed.” Beth Garza, who served until 2019 as the independent monitor of grid operator ERCOT, said companies selling one-year contracts must anticipate higher prices expected to increase during the length of those contracts.
James Boyle, who once led Texas’ Office of Public Utility Counsel, said: “We all know that what happened in the legislative session is that everybody was taken care of except the home folks. And the consumer pays for everybody else’s mistakes. I think that’s reflected in those prices.”
Kelso King, who runs King Energy Consulting and monitors all Public Utility Commission meetings, warns that still to come is the pass-through to consumers of the multi-billion-dollar bailout for energy companies. That was the solution approved by lawmakers and Gov. Greg Abbott.
King added, “For decades, policymakers kept saying that the great thing about a competitive market was that all of the risks would be borne by generators instead of ratepayers. But when it came down to it, unsurprisingly, end use customers were left holding the bag.”
Here are some shopping tips from citizens of my Watchdog Nation.
Judy Ruby-Brown of Coppell was skeptical of Texas Power Switch, which works through cities, mostly, to buy electricity in bulk discount. When I assured her it’s a solid program, she ran the numbers, comparing other companies to it, and declared it the “real deal.” She still predicts she’ll spend $300 more on electricity than she did last year.
Nancy Upson of Dallas discovered one of the dirty secrets: If you buy a 1,000 kWh plan and your usage is above or below that exact amount each month, your rate skyrockets. She says consumers must strive to hit the mark, even if it is wasteful. This applies to 500 kWh and 2,000 kWh plans, too.
Dick Bunting of Bonham discovered that some companies that appear at the top of PowerToChoose.org with supposed low rates charge a $14.99 setup fee.
“Wonder how many folks have been fooled by this,” he asks.
Pam King of Houston says to be wary of outside consultants. Check their reviews and also electricity company reviews, too. Watch out for bait and switch, she says.
A retail company may try to sell you a different plan than the one you want. She says, “They’ll tell you it’s cheaper or has some sort of perk. One company tried to sell me a plan with an air conditioning maintenance contract included.”
She filed a complaint with the PUC on her current provider for charging the wrong transmission fee.
“I’m not the crazy one,” she concluded. “It’s the whole dysfunctional system.” Amen