Friday, August 5, 2011

On Electricity

        Do people really save money switching electric companies?  Before deregulation, electric companies were just like gas or water companies.  You had no choice in providers.  Providers owned geographical territories and their customers had no option who to use.  On January 1, 2002, the Texas  legislature passed Senate Bill 7 allowing for competition throughout most of the state.  Exceptions were made for cooperatives and municipalities that provide electricity for only one defined local area. 
        Since deregulation, a whole host of companies who offer electric service have popped up offering a whole host of rate plans.  Rate plans are  generally based on kilowatt hour (KwH).  A kilowatt is a unit of measure equal to 1000 watt hours, according to Wikipedia.  A quick search of the Internet found rates from 8.8 to 13 cents per KwH.  While the rates are just pennies apart, the difference on your bill can be quite noticeable.   If you as a homeowner or renter using 4200 KwHs and you pay 8.8 cents per KwH you would pay $369.60 plus taxes. However, if you pay 13 cents per KwH, you would pay $546.00.  There is quite a difference between the two. 
       Some energy companies such as Stream Energy use their customers as their sales force by offering electricity as a multi-level marketing plan.  They offer low rate plans, but also pay people who sign up as sales associates commissions when they convince others to sign up as well.  Customers do not have to be sales associates and many are not.  However, electricity plans can only be contracted through an associate.  If a customer wants to be a sales associate they must pay a start up fee.  Sales associates who offer plans are easy to find on the web such as www.pixierider.igniteinc.biz.
      What should you do if you want to consider changing electric plans?  The first step is to check with your electric company to find out if you use coop or municipality services.  If not, check to see if you agreed to a contract for a specified amount of time with your current provider.  Breaking a contract early may subject you to an early disconnect fee.  If you determine you can make a change, take a look at sites like www.saveonenergy.com to compare electric rates and select a new provider.  With careful research, it is often possible to save hundreds of dollars per year.