Introducing Tara Energy

Why do I promote a fixed rate company as well as a variable rate company? Because some people just like the budgetary comfort of fixed prices rather than the flexibility of variable pricing.

Tara Energy is another exceptional Retail Energy Provider, based in Houston, that's become well established in the state of Texas. They should be on your short list of REP candidates. Give them a chance to cater to your specific needs. Before you realize it, you will become part of their family, and you'll enjoy the experience.

Tara is very competitive on commercial and residential rates. Their business plan is simple: to provide the best possible service and the best price available in an ever changing dynamic marketplace.

Features

1. If the business owner moves, sells, or closes the business, Tara will allow commercial contracts to be terminated without penalty.

2. For residential customers, they allow you to cancel without penalty in the event of a move. If you just want to change providers, there's a $250.00 cancellation fee.

3. They do not add any monthly administration or service fees to their commercial rates.

Tara’s family approach extends to Hotels and Restaurants to whom they offer exceptional flexibility and service. They're the only endorsed provider listed by the Texas Hotel and Lodging Association (THLA).

Tara also specializes in meeting the needs of community associations and their residents. The community of New Territory in Sugar Land chose Tara Energy as their provider of choice.

Want to help yourself, your neighbor and the community as a whole? Contact a Tara representative (like me!). Let’s plan a money savings program to meet your individual and community needs.

Bringing Meaning To Madness

There are a lot of choices out there. Tara is great for fixed rate plans, but do your own comparison so you can make a wise decision.

Introducing Glacial Energy

Today, I want to tell you about Glacial Energy, one of the best friends a business owner can have. If you really want the absolute lowest prices on electricity where the monthly savings will allow you to withstand a 3 month spike, you should consider Glacial Energy as your Retail Energy Provider (REP). They're a financially strong and growing energy provider now servicing 15 states.

Secret To Success

1. Glacial’s success is in their simplicity. They offer variable rate plans based on the low wholesale prices (MCPE). variable rates, little overhead, simple billing, electronic transfer of funds and no cancellation fees.

2. They have little overhead.

3. They have simple billing.

4. They offers electronic transfer of funds so you help the environment by being paper-free with their email billing and paper-free with no check to write since it's debited from your checking account like a car payment.

5. They require NO cancellation fees if you want to change to another provider.

MCPE

Low wholesale prices are the Market Clearing Price of Energy. In Texas the MCPE is controlled by ERCOT which I have previously written about. These are the lowest rates most commercial users can obtain. They are subject to price movements, but they normally beat fixed price deals over a 12 month cycle.

Fixed rates may occasionally beat a variable rate, but not too often. Traditionally, the best deal comes from variable rates in the long run.

Overhead

Of Glacial’s employees, 90 % are revenue producing and the remaining 10% handle billing and customer service. Keeping overhead to a minimum and service high allows for lower prices to be passed on to you, the customer.

Simple Billing

Glacial only has one price for energy, not tiers of different prices based on usage on the bill. With Glacial, usage is broken out by address if there are multiple locations. Bills can be sent to multiple locations or to one main location, based on your request.

Electronic Transfer Of Funds

ETF helps keep Glacial’s revenues strong and contributes to their ability to keep bad debt low. That translates into lower prices for you, the customer. You receive a bill 10 days before the funds will be transferred in order for you to review your bill and give them a call if something does not seem correct. That also gives you 10 days to make sure the funds are in your account. So you don't have an embarrassing mistake.

No Cancellation Fees

Unlike all their competitors, Glacial does not lock you in to a term contract with hefty fees required to cancel if you don't like them. If you don’t like Glacial, simply give them a 30 day notice and sign up with someone else.

However, when you figure out that they're really the best deal out there, they'll welcome you back without penalty.

Bringing Meaning To Madness

If you don't want to lock yourself in for 2 or 3 years or even longer in some cases, then the flexibility of variable pricing is for you. Why not sign on with a company that let's you walk away if you think you get a better deal elsewhere?

Long Term Contracts Require Thought

Were you guided into a long term contract decision by your electric provider? Did you make a wise decision or a decision based on advice from your current electricity provider who had their own self interest involved? Excellent questions.

Answers

In my blogpost Truth About Power, I mentioned that if a Retail Energy Provider (REP) is pushing fixed price deals, it's usually in their best interest, not yours. If you are one of the unfortunates who locked into one of these long term arrangements, you are dissatisfied and may want out.

Why Do You Want Out

Why would you want out of a long term fixed contract? Because you can save money over the course of the year with variable rates. Variable monthly wholesale prices beat fixed priced deals historically, time after time. How much money are we talking about? That depends on several variables including what you are paying now relative to market prices. (To understand this, see my blogpost Alphabet Speak: MCPE).

The chart I've posted above shows possible savings over the last six months relative to the Market Clearing Price for Energy. (Click it to magnify it.) If you are locked into a Fixed Rate, use the numbers above to determine if you are paying more than you should be. The amount under Savings is what you could be putting back in your pocket every month.

Read Your Electricity Contract

Read the contract carefully and focus on the termination clause. What is the length of the contract? What's the cancellation penalty in terms of dollars? If the contract does not allow early termination prior to expiration, there is not much you can do. Sorry! (Contact me when it's getting ready to expire, and we'll see if I can save you money.)

If the terms allow you to cancel early, there is usually a cancellation fee stated. If not, you can easily calculate the dollar amount it would cost to terminate the contract early using the terms of the cancellation clause.

Once you have figured out what the cancellation dollar amount is, compare it to what you would save each month with a variable rate contract. The difference will show you whether it's worth canceling early.

Here's How

Check your monthly bill Energy Charge to get a good idea of your average kW usage. Use your average kW usage times (x) the MCPE rate. Then multiply that number times the remaining months on the contract to get a fairly close estimate of saving. The decision should become very easy whether to cancel the contract and switch to a Retail Energy Provider (REP) who bills out at an MCPE rate. I represent a REP who does not charge penalties or have a cancellation fee. How refreshing!

Bringing Meaning To Madness

Remember, when using MCPE rates in Texas, your electricity bills should reach their highest prices in late July to early September during peak air conditioner load and then possibly again in late December to mid February with the winter heating load. Savings really are possible.

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.

Alphabet Speak: MCPE

Today, let's look at MCPE and its benefits. If that particular acronym is unknown to you, let me introduce you to Market Clearing Price for Energy.

What Is MCPE?

Market Clearing Price for Energy is the bare bones price that Texas companies generally use to create a custom tailored contract for wholesale buyers and sellers of electricity. Briefly, these wholesale buyers and wholesale sellers of electricity are utilities, other Retail Energy Providers (REP), municipalities, or corporations that manage their own electricity needs. That pretty much covers everyone.

Essentially MCPE allows a Texas company to purchase a block or blocks of power without fear of penalty if their Load (Demand) exceeds the block they purchased. If a company's Load exceeds the block amount purchased, the company simply pays whatever the variable market rate is at that time for the amount exceeding the block purchased.

MCPE Pricing

The MCPE price for energy is a variable rate that changes every 15 minutes and the average price is historically much lower than a fixed price rate.

The smartest way to use MCPE pricing is in a block purchase contract when you know about how much energy you will use, but you don't want to pay a large amount if you exceed the usage you have forecasted. Every 15 minutes, the Real Time Data is posted on the ERCOT site.

Bringing Meaning To Madness

A good REP takes advantage of this pricing mechanism and passes that advantage on to its customers.

Truth About Power

Electricity is a generated product that cannot be stored like its relatives, natural gas, natural gas liquids, or even crude oil.

The power that is generated has to match what will be used (remember, that's called Load). If what is generated isn't matched, the power generated is lost forever. That's bad for all of us consumers and for the utilities and ultimately for the environment.

Factors Governing Costs

Since generation and load forecasting are integral parts of the economics that affect all of us, it's good to have quality people managing the generation and load forecasting on our behalf.

For that, you can thank your transmission system operators known as the Independent System Operator, or ISO. The ISO coordinates the dispatch of generating units to meet the demand or load of the users across the transmission grid.

What's REP & What Do They Do

When there are competing generators in a region on the same grid, they will sell their generated electricity to retailers thus creating a wholesale electricity market. This is where money can be saved by a prudent and knowledgeable professional Retail Energy Provider, or REP.

Bringing Meaning To Madness

A really good REP should be there to help you lower your costs. If your REP is pushing fixed deals, he has a reason, and that reason is that it means more money in his pocket. Less in yours.

What Is Electricity?

Electricity is the “juice” that flows to your business and home to provide you with the means to enjoy the life you live. It helps you stay cool, see at night, keeps your food from spoiling, keeps drinks cold, and provides you with fantastic entertainment options. All by just flipping a switch!

Electricity As Commodity

Electricity is also a commodity that can be bought and sold in a marketplace. The price is set by supply and demand factors.

Wholesale transactions are normally cleared and settled by an Independent System Operator, commonly known as ISO. Each ISO has a designated generating and transmission region. Here in Texas, this ISO is called ERCOT which stands for Electricity Reliability Council of Texas.

Purpose of ISO

These ISOs ensure reliability between the generating utilities (the actual power plant that produces the electricity) and the end users who are you and me. They do this by managing the demand as well as the generating and transmission assets of its region.

Demand, sometimes called load, is how much electricity users need during a specific time period.

Other Electricity Financial Instruments

There are also markets for electricity derivatives. Derivatives are simply other financial instruments derived from electricity, for instance, futures, options, and OTC (over the counter) financial transactions.

Deregulation: Curse or Blessing

All these electricity financial instruments resulted from deregulation which is the process of removing or simplifying government rules and regulations. This occurred in Texas in January 1 , 2002.

Bringing Meaning To Madness

Electricity is a more complicated issue than you think, but a little education goes a long way toward helping you make an informed decision about your provider.