Energy bills look simple on the surface, but “fixed” rates can hide extra charges that change your true price per kilowatt-hour. This post breaks down a real bill and the common gotchas to watch for—so you can spot them fast and avoid surprises.*
We recently published a new video on the reality behind fixed rates in electricity contracts. Below we expand on the video’s details.
The myth of the “fixed” rate
Providers often advertise a low base energy rate, but leave out other recurring or variable line items that get added later. That turns a “fixed” price into a moving target.
- Usage: 355 kWh over 29 days, based on meter readings.
- Displayed base rate: just over 4 cents per kWh—the headline number most people notice.
The real price is what’s included (and what’s not)
A true “all-in” rate should include known recurring charges. Many bills don’t—and this is where costs creep in.
Hidden add-ons to watch for
- Ancillary services (monthly): A vague description like “November ancillary services” with no locked price can fluctuate monthly—an additional line with a similar name may appear—making budgeting hard. Together, these push your “fixed” price above the base.
- Congestion/Hub to Load zone Basis (monthly): Another vague line item that will get added to your bill with no locked price.
- Market securitization (state‑mandated): A per‑kWh fee that covers past grid debt. It’s legit, but amounts vary by provider. In the example, it’s a small, less-than-a-penny per kilowatt, but still part of your effective rate.
- Provider‑added extras: Items like “storm recovery charge” or “recovery tax credit” that are not in the regulated tariff. These are inconsistent and can quietly lift your effective rate.
Result: the real price climbs from roughly 4.0¢ to about 4.2¢, and then nearer 4.36¢ per kWh—without the base rate changing. But that’s this month. Next month, it could be 5¢ or even higher.
What’s regulated (and what’s not)
Delivery charges: Set by the wires company and regulated by the state. Everyone passes them through at the same rate; no provider profits from these. They’re unavoidable—but transparent.
The fine print trap
Some contracts explicitly allow suppliers to raise prices or introduce new line items if “market conditions” change. That’s how a fixed rate stops being fixed—legally.
Why this matters for cities and public entities
Small add‑ons across dozens or hundreds of meters compound quickly, turning “pennies” into real budget overruns—especially when charges fluctuate without warning.
How TCAP approaches pricing
TCAP quotes one transparent price that includes known recurring items (e.g., ancillary and congestion‑related charges), eliminating shell games and surprise additions. The aim: one honest, all‑in rate per kWh.
Key takeaways
- Fixed isn’t always fixed: Ask which recurring and ancillary or congestion charges are included in the quoted rate. Many times you have to explicitly ask what the charges are called, which line items they fall in, or you may be misled. It becomes a semantics game that can ultimately cost you big time.
- Demand clarity: Require written pricing that itemizes all known monthly line items—and how variable ones are handled.
- Watch provider‑added extras: If a line item isn’t in the regulated tariff, verify its basis and cap.
- Budget for the whole bill: Evaluate effective cents/kWh after all pass‑throughs and provider fees—across all meters.
- Prefer all‑in quotes: One rate that bundles known recurring charges reduces risk and surprises.
*Note: The example rates in this video and post are accurate as of mid-2024.