To Compare, Learn Billing Elements

Before you can compare one electricity provider to another, you must first understand your electric bill.

Let me break it down for you so you can compare apples to apples, so to speak, because electric utility bills can be confusing.

A good Retail Energy Provider (REP) will make it easy for you to understand your bill because the bill will be simple and clearly represent the different components that make up the charges billed to you. In fact, it might be said that the more complex the bill, the better the chance that you might find yourself being taken advantage of.

4 Components To Electric Bill

These are what you compare from one provider to the next in order to get the best deal from competing Retail Energy Provider (REP) companies.

Energy Charge

This is the actual negotiated rate per kwh. It's multiplied by the number of kwh's you used. This is what can be negotiated with the REPs competing for your account.

Utility Charges

The utility charge may be called TDSP Charges (Transmission & Distribution) or Demand Charges. These are the charges assessed to you by your service provider (not necessarily your Retail Energy Provider (REP). These charges may be calculated differently by different utility companies.

When it's called a TDSP Charge, it's most important to make sure that the REP states in their contract that they are passing these charges through to you from the utility company without mark-up. This charge cannot be negotiated.

When it's called a Demand Charge, the utility company will quote you a specific rate per KW (Kilowatt or KW, not to be confused with the kwh rate).

Monthly Customer Charge

This is a monthly meter charge that the energy company may or may not charge you. This is strictly an administrative fee.

Gross Receipts Tax/PUC Tax

This is a utilities tax assessed by the Texas Public Utility Commission (PUC). All energy companies have to charge the customer even if they qualify for sales tax exemption status. It's approximately 2% of your total electricity usage as a tax. Some energy companies list this as a separate line item on your bill, and some energy companies roll this tax into their energy rate. Either way, you end up paying it.

That's it. You see now that the two main items of concern are the Energy Charge, the one you can negotiate, and the Utility Charge, the one that you need to make sure is being passed through to you by your REP without mark up.

Bringing Meaning To Madness

Take your electric bill and shop around, comparing apples to apples. Then you can easily see whether you're getting a good deal from your electricity provider. If not, email me. I've got a great REP to recommend to you.