Guarding Against Escalating Electricity Rates in Texas

It's happening all over the state; consumers get an ugly wake up call, a drastic jump in their electric bill, often occurring with the onset of cold weather or peak hot summer months, leading them to believe that their electricity rates have simply gone through the roof. Telephonic complaints come flooding in to customer call centers, written queries show up on Internet blog sites, all clamoring to know, why, why, why?

Before you dismiss your sudden rise in electricity rates as a factor of the weather, or rising natural gas prices - to which Texas electricity rates are inexorably linked - take a moment to examine your electricity bill. In particular, look at the rate that you are paying per kilowatt-hour for electricity, and your electricity provider's contract expiration date.

Since energy deregulation went into effect in 2002, dozens of electric providers have descended upon the state of Texas, clamoring to provide residents with low-cost electricity, and offering all kinds of different rates, plans, bonuses and rewards in order to gain a larger share of the newly deregulated Texas energy market.

Customers have been told that they have a right to choose, and choose they have. They had the benefit of variable, fixed and indexed energy rates, month-to-month no contract plans, long-term fixed rate plans, bundled and non-bundled rate plans, all nicely packaged with various rewards to entice them to switch from their incumbent electric providers.

Managing your household or commercial electrical account, however, does not end with selecting a provider and plan. While a number of variable rate plans are month-to-month, no-contract selections, most electrical plans have some sort of term or expiration date. In fact, if you are willing to sign a one, two, or three-year contract, you can generally lock in a low, fixed rate for your electrical power, which will give you the security of knowing that your rates will not go up for the term of your contract.

And that's where the problems arise. Many Texas residents go past the term of their contract without realizing it, at which point a much higher, automatic rate may kick in. A consumer with a competitive low rate of around eight or nine cents per kilowatt-hour may suddenly find him or herself paying as much as 14 or 15 cents per kilowatt-hour, and subsequently scratching her head and wondering why her electricity bill has gone awry.

In order to keep a lid on electricity rates in Texas, ask yourself the right questions while choosing between electricity rates and pay close attention to your contract periods and kilowatt per hour rate charges, or else risk getting a nasty surprise when you least expect it.