Guide to Saving on Your Electricity Bill

Note from the author: The story below served us well for many years, but in September 2017 this Guide to Electricity was completely updated. Please visit the updated version here.

 

More than anything, Dave Lieber’s Watchdog Nation wants to save you money. The easiest way to save in Texas, I believe, is to shop smart for electricity.

In the first years after deregulation, I was a confused shopper because power always came from a monopoly. Suddenly, dozens of new electricity companies started competing.

Not understanding the system, I overpaid – but I quickly grew tired of that. I decided to educate myself. Eventually, I figured out a system. My Watchdog Nation Guide to Electricity Savings is built on the idea that companies should be judged two ways – by lowest rate and by company reputation. When the stars align, the right company is obvious. (Note: This doesn’t apply to customers in mandatory electricity co-ops or municipal-owned utilities.)

I’ve shared this with readers of my column in the Fort Worth Star-Telegram and then again in my current column as The Watchdog of The Dallas Morning News. I’ve also shared paper copies of this strategy with at least 100,000 Texans, audiences I’ve spoken to in recent years.

Shopping for electricity is still a role of dice, but my ideas eliminate a lot of risk. Now that most electricity companies have figured out a variety of surprising and often unfair ways to collect extra fees from you, this reputational shopping, as I call it, is more important than ever.

Thousands of Texans have used this Watchdog Nation report by Dave Lieber as the basis for a switch in electric companies – saving thousands of dollars for consumers.

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More Watchdog Nation News:

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Here’s The Dallas Morning News Watchdog’s gift to you – The 2015 Guide to Picking the Best Electricity Provider

1. TXU no longer rules. Get over the idea that TXU Energy, most likely your original provider, is the only company that can offer solid, uninterrupted service. And don’t believe the fallacy that TXU customers get serviced first when power goes out. Oncor Electric Delivery is responsible for maintaining the transmission system. Everybody, TXU and its many competitors, uses Oncor to handle repairs in our region.

2. Switching is good. Act under the assumption that you should switch companies every year. The market is constantly changing.

3. You can find better deals and save hundreds of dollars a year with this one decision. Electricity is measured by kWh, or kilowatts-hour. If you pay 8 cents a kWh instead of 12 cents, your monthly electric bill could drop $100 or more.

4. Know your current contract terms. Before you shop, know what you already have. (Surprisingly, most people don’t.) What’s your kWh rate? Check your electric bill. It may be higher than what’s available elsewhere. (In Texas, last week it ranged from 4.9 cents to as high as 13.5 cents.) Also call your provider and ask for the date when your contract expires. Find out whether your rate is fixed or variable. Start planning a possible switch a month before a contract expires.

5. Decide whether you want to play it safe or be a gambler. Do you want to lock in a fixed rate that you can afford for a longer period of time? Or are you willing to take a low price now and understand that a variable or indexed rate could spike depending on market conditions?

6. Conduct a thorough search. Go to this Web site: www.powertochoose.org. (If you don’t have an Internet connection, visit your public library and ask a librarian for help. Or ask a friend or relative to help you.) Enter your zip code and start searching. When you find an offer you like, make sure to go to the company’s own website. Sometimes the company’s price might be cheaper than what’s shown on powertochoose.org.

7. Pick your poison. Deeper in the website you see a search box along the left side. Under “Plan Type” a recommended pick is fixed, but you can also choose a variable or an indexed market rate. (The Watchdog likes fixed since market conditions can grow volatile.) Under “Price,” type in a range from 4 cents to 12 cents. That’s a good spread. Pick a contract length. Fill out the other boxes. Then hit “Refresh Results” on the bottom. Keep trying different combinations to see what the prices are that day. They change often.

8. Study the results. For the selection cited above, several dozen companies recently offered rates in that range. Remember that the lowest rates could come from a company with a poor reputation, but more on that later. Contract lengths varied from one to 36 months. Each service plan comes with links to “Terms of Service,” “Facts Sheet,” “Signup” and “Special Terms.” When you click on these, you learn the nitty-gritty details. Many companies have minimums about the amount of power you must use, or you pay more. Carefully look for language about other fees.

9. Check out your favorite. After you find a company with a rate and contract length you like, learn more about them. One way is to do an Internet search of the company. Place the company’s name in various searches besides these search terms: scam, rip-off and complaints. If the company has a troubled history, find out before you sign up. If only a few results come up from disgruntled customers, don’t worry. But if there are several dozen, continue with a quick search of the company’s Better Business Bureau record. And then, most important, return to powertochoose.org and below the name of the company, you’ll see “Complaint Scorecard” and “Complaint History.” Click on those links and learn more about the company.

10. Read the contract. Otherwise, you’ll get blindsided when hidden fees and charges emerge later. Look for termination fees. Contracts must be printed in letters big enough to read.

Final switch tips. When you make your final selection, don’t call your current electricity provider to cancel. Sign up with the new company only. Try to sign up at least 5 to 7 days before your plan expires so the overlap between the two billing cycles is negligible. Some people switch too late and pay higher prices during the transition. If you have a smart meter, the state rule is you must be switched within 48 hours. But 5-7 days is safer.

Remember, there’s no loss of power when you switch. It happens, and you don’t even know it.

Until the bill comes.

Click on "Complaint History" and "Complaint Scorecard" for important information.

Click on “Complaint History” and “Complaint Scorecard” for important information.

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Dave Lieber book that won two national awards for social change.\

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Comments

  1. If your old agreement is at a higher rate, or you risk going to the old company’s “default” rate (which is usually very high), ask your new company for an off-cycle meter reading to get the switched more quickly. This typically costs around $8 but can save a cycle or two being ripped-off.

  2. I just switched to Champion as of today, 9.3 cts per KWH with 4.95 monthly charge. I did an off-cyle meter read for $8-9. I left Direct Energy and I do not recommend DE at all! Champion has one of the best scorecard ratings per the PUC.

  3. That’s impressive, Mike, that you matched up the financial cost with the scorecard ratings. That’s how the electrical guide says to do it! Way 2 go.

  4. Dave, I am confused. Do you have a recommendation for power supplier?

  5. I do not and here's why: About four companies went out of business in Texas last year, causing terrible hardship for those customers, who are thrown into what is called the POLR pool (Provider of Last Resort). These folks were paying 15 or 16 cents with National Power and suddenly they were paying 25 cents a kWh with Amigo Energy. Not good! So let's assume that one or more companies will close again this year. How are we to know who is in trouble? If I recommend Company XYZ to you and they close, wow would you be mad?? Or what?? So you must take responsibility. I try to provide members of Watchdog Nation with the tool to know how to choose. But what I suggest in my guide is you check their complaint rate, and go with the leap of faith that a company with a high complaint rate is in some kind of trouble.

  6. What about commercial accounts with demand charges. Are the demand charges passed directly on by Oncor? If so, are these demand charges the same with every provider or do they add additional percentages on to what is billed to them by Oncor? Not sure if the regulations allow such practices?

  7. The demand charges are levied by the retail providers on businesses. This is the most complicated issue I've ever covered in Texas. When I did a story on demand fees a year ago, even the TXU folks couldn't explain it in a way that anyone understands. This issue is so difficult that I would suggest if you have these questions, you go straight to the PUC. If you have trouble getting anyone, let me know and I will contact them on your behalf.

  8. Dave, when going through all the information under power to choose, I see there are
    many, many more complaints about TXU than there are about other companies, for example Reliant Energy. Is it safe to assume that is because TXU
    serves a whole lot more customers than the other providers, or is that not a
    reasonable assumption? I looked at my bill to see it is .1233 per kwh…..I figured the
    difference to go to a company charging 10.9c per kwh….and it's only about $8 based
    on my usage in December (475 kwh)….Is it worth it?

  9. SW Arlington says:

    Dave,

    Is there any way to take advantage of the promotional rates of these companies by switching providers every month?

    SW Arlington

  10. I don't think it would be worth all the trouble it would cause in your life. Plus, there's a 45-day switch that would mess things up for you pretty good.

  11. Yes, you are right. With more customers, they would have a ratio of more complaints that should not reflect poorly on them. (But if you talk to their disgruntled customers, maybe it should!)
    12.3 is good, but if you can get a niner, you should consider it.

  12. Have you ever had success or heard of others having success asking TXU to match a competitor's rate? I currently have 10.99 for the first 126 KWH and 12.33 for the next level of usage with TXU. Is it worth a call to see if they would match the lower rates offered by competitors, even if it means I have to sign a contract?

    Also, if you've had service with TXU for many years as I have, how can I have a contract unless it is a month to month? I have never signed anything or agreed to anything since I started service years ago. And I actually read everything they send me. There has never been any mention of a new contract, etc.

  13. You definitely have nothing to lose by calling and asking TXU to bargain with you. In fact, it's the natural next step. If you sign a contract, make sure the rate is in the 9's or 10s, though.

    About your "contract:" They slide you into various plans. Many people don't know how they got in the plan they are in. They didn't understand the choices. They bought it from a door-to-door guy (WORST way to buy electricity) or from a heavy-handed phone solicitor. You have to ask them specifically what you have and then go look it up for more information. Every plan has a "Terms of Service" which tells you exactly what you are getting. It's the legal document. And also a basic label that gives you the barebones.

  14. cheryl t says:

    Can you tell me why all the electric providers charge an extra fee for using less than 1000 kilowatts per month? Aren't we suppose to be trying to conserve energy? Yet, we are punished when we do so.

  15. It's just a racket where they can make more money.

  16. Ambit Bill rop off

    My bill every month is climbing sky high I had paid around 50 0r 60 bucks a month now
    my last bill went to 114 this month 140 I can not afford this what is going on,,,

    HELP ….

  17. Garci,
    This post is what solves your problem. It has worked for thousands who have read it and implemented it. There's your help. You came to the right place.

  18. Dave,
    My husband and I moved here to fort worth in mid Nov. We're renting a 2 bd room apt. about a little over 1000sqf. All the choices of power company got me overwhelmed!! Our office lady recommended green mountain so we did went with green mountain. It sounded good when we signed up but then again we didn't know any better. My husband goes out of town at least 2 weeks out of the month. And when he does, so am I! Our first bill was $228! We were shocked! Is this normal? Or you think something could went wrong when the meter were read?

  19. Oh by the way our rate is at 10.8

  20. A couple odd things I experienced when asking TXU to match a competitors rates. I only got offered this rate on the phone, Had to call. They claimed a fact sheet for this special offer(just for me) was not available to view online nor could it be sent via email. Also the rate was great, but it was odd that he would quote one cost per kwh over 2000kwh use with the TDU charge, but the rates at 0 to 1000 and 1000 to 2000 were without the TDU charge and he could not provide what they would be. Again on face value it sounded like a great value but I suspect it may have had some other requirements like autopay and estatements as part of it. But since this is all verbal it is hard to remember to get all the information. Heck I used up one sheet of paper copying all I could as it was. I think it is time to change the only worry I really have is when the renewals come up and people miss it and get a real high bill…..Thanks for the venting opportunity. My brain is still spinning….Dave

  21. Michelle Phillips says:

    Mr. Lieber

    I am at my wits end with TXU – why can't i talk to someone here stateside? I bought a foreclosed house for myself and my children in May of this year following my divorce. The bank had the electricity turned on by TXU and told me just to contact TXU have them change it to my info when we closed. I paid a $360 deposit to TXU and have never received a bill – I have been round and round with TXU Customer Service and they insist that my account is not active and that I am getting service from Oncor. I call Oncor and they don't service my address. Additionally the automated number for TXU says that there are two accounts tied to my cell phone number but the reps in the Phillipines swear there is only one account and its not active. I am a single parent not currently receiving child support and I can't afford for them to suddenly decide that they are actually providing my electricity and that I owe some ridiculous amount of money. Any suggestions?

  22. Michelle Phillips says:

    Mr. Lieber

    Just thought I would update you. TXU now says that they had a request from the bank to activate the power for an inspection and that my account was never activated. They claim that I will not receive a bill for services prior to yesterday, because they activated my account yesterday. – They even apparently came out to my house and turned the power off and back on since all the clocks on my appliances showed a power failure during the day. I hope they are correct and I don't suddenly get slammed with some huge ridiculous bill. –

  23. Becky Fleming says:

    We just signed up with TXU energy. We got what we thought was a good beal. The first bill was better than what we was paying before. The next bill had a delivery charge that was the same as our bill . (Bill $157.00 —delivery charge $148.00) what do we do about the delivery charge? When I call around I was told. It was in with the quote of 9.4 a klw.

  24. Dave Lieber Dave Lieber says:

    Darn that delivery charge! Here’s more info. http://www.askoncor.com/EN/Pages/FAQs/DG-17.aspx. And if you want to challenge, first call Oncor and appeal it and then file a complaint with the PUC. You’ll probably end up paying it, but it can’t hurt to level complaints about this mysterious charge.

  25. I know there is a lot of options in the deregulated markets. What is currently the best electricity provider or the top few in Texas right now. I ask because soon the company I work part time for will be one of the players and I want to know how North American Power will stack up against the existing competition in that market.

  26. Dave Lieber Dave Lieber says:

    That’s a question I can’t answer for you. You would have to use the information I provided in this guide to check out the complaints of various companies in the complaint sections that I describe in this.

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