In Houston, Dallas, Fort Worth and other areas with electric deregulation, Texans have the freedom to choose providers. That’s the good news. But making apples-to-apples comparisons can be nearly impossible. Dense electricity contracts often contain unfathomable terms, surcharges and fees. Neither is there any uniformity among contracts.
The Texas Coalition for Affordable Power has called for the creation of standard offer products to help cut through the confusion. Under this proposal, retail electric providers (REPs) would add these standardized deals to their menu of other electricity deals, and price them in any way they see fit.
Why would standardized deals be so useful? Just consider the often confusing fees and charges that end up in our electricity contracts. We’ve reproduced many of them below, with explanations drawn from a report by the Texas Ratepayers Organization to Save Energy, a consumer group. There’s also information drawn from the Public Utility Commission website.
- Minimum Usage Fee – A minimum usage fee refers to a fee added to a bill if the customer’s kilowatt/hour (kWh) use for the month drops below a certain amount. Also included in this category are discounts given to customers whose usage exceeds pre-determined levels.
- Disconnect/Reconnect Fee – Most REPs charge fees in addition to the fees charged by the transmission and distribution utilities (TDU) that are related to disconnection and reconnection.
- Payment Processing Fee – A fee charged by the REP for accepting certain forms of payment from the consumer. This may include fees for making credit card payments over the phone to the customer service center and charges for internet payments.
- Contract Termination Fee – The amount a customer is charged if the contract is voluntarily ended by the customer prior to the expiration date. All fixed-price plans charge a fee for early termination, according to a consumer group survey.
- Return Payment Fee – The return payment fee represents charges for returned checks and rejected electronic or credit card payments and is frequently referred to as a NSF (not sufficient funds) fee.
- Late Payment Fee – The late payment is the fee charged to consumers on bills paid after the due date (16 days after the bill is issued).
- “One of a kind” Fees — Texans will sometimes find “one of a kind” fees on their bills, such as those to establish deferred payment plans, for the management of an inactive account or for document processing.
- Demand Charge — A charge based on the rate at which electric energy is delivered to or by a system at a given instant, or averaged over a designed period, during the billing cycle.
- Energy Charge — This the amount charged for the amount of energy consumed each month, as measured in kilowatt hours. In most cases, the energy charge will make up the largest portion of your bill.
- Energy Efficiency Cost Recovery Factor — A charge approved by the Public Utility Comimssion to recover the electric utility’s cost of providing energy efficiency programs.
- Meter Charge — A charge assessed to recover a transmission and distribution utility’s charges for metering a customer’s consumption.
- Advanced Metering Systems Surcharge — A charge authorized by the Public Utility Commission for electric delivery companies to recover the costs for digital metering systems. This charge is shared among all electricity users who receive a digital meter and added to electric bills for a decade or more.
- Transmission and Distribution Utility Delivery Charges — Charge to cover the cost of moving electricity from the generation plant to your home.
- Transmission and Distribution Surcharges — One or more TDU surcharges on a customer’s bill in any combination.
- (Electric Deregulation) Transition Charge — Utilities are allowed to refinance the cost of their stranded investments, which are those that have been determined to have become uneconomical as a result of deregulation. Texas ratepayers are on the hook for nearly $7 billion of these deregulation-related charges.
- System Benefit Fund — A charge, not to exceed 65 cents per megawatt hour, is passed onto ratepayers to pay for the System Benefit Fund. The SBF was created by the Texas Legislature to pay for energy efficiency and customer education programs, but much of the money has been diverted instead to balance the state budget.
- PUC Assessment — A fee assessed to recover the statutory fee for administering the Public Utility Regulatory Act.
- Miscellaneous Gross Receipts Tax Reimbursement — Fee assessed to recover the miscellaneous gross receipts tax imposed on retail electric providers operating in an incorporated city or town having a population of 1,000 or more.
- Nuclear Decommission Fund Fee — Fee that covers the cost of safely removing a nuclear generation facility from service.
If you have questions or complaints about your bill, you should contact your service provider. Complaints also can be filed with the PUC’s Office of Customer Protection, which can be reached at 1-888-782-8477, by email at firstname.lastname@example.org, or online here.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.