Why Do Texas Churches Have High Demand Charges on Their Electric Bill?

Texas church demand charge The way the PUCT wrote the rules regarding peak demand charges and electric usage rates set by electric utilities like Oncor Electric Delivery allows for interpretation. As currently interpreted by electric utilities most churches pay unreasonably high demand charges even when little or no energy is used at their facility. The problem according to the TEPA organization and the Texas Baptist Christian Life Commission is that the rules have resulted in some unforeseen hardships on houses of worship. For instance, many churches are low load profile customers that may be above the 25% load factor rule but below 35%. Oncor already defines a low load factor customer as 40% and below. The TEPA organization or Texas Energy Professionals Association has requested that the rule by changed to make secondary voltage non-residential customers that are as much as 35% in load factor but still a low load profile customer avoid what are referred to as demand ratchets.

What is the Reason in the Current Law for Having Such High Demand Charges on Churches

The goal of the law was to make the demand charges for different load factors and the use of energy during peak demand periods a fair price for all non-residential accounts. What some believe has occurred is a harsh penalty on some places like many houses of worship who have to deal with a demand ratchet when their electric usage may peak on a Sunday but be flat to non-existent the rest of the week. The law was setup to be a one size fits all type of rule so it would spread out the penalty but in reality churches feel a huge brunt of these very high energy demand charges because of the unique characteristics of how they use energy during the week.

What is a Demand Ratchet?

A demand ratchet allows an electric utility to charge a minimum amount on your electric bill each month regardless of what you are actually using. They calculate this based on your highest peak month of the year and than take a percentage of that and charge you that as a monthly minimum. Your monthly minimum might be $300 – $500 and for some churches much more than this. Imagine paying this amount each month even during a month where you only used 900 kilowatt hours all month long! It can be shocking!

How Do you Lower the Demand Ratchet Penalty?

Many churches leave their current retail electric provider and try to find another one thinking that will fix their issue. This change in retail providers will do nothing to lower the demand ratchet problem. You may reduce the retail electric provider rate associated with the monthly kilowatt hours you use but the monthly minimum demand charge you pay will remain unaffected. In order to lower this demand ratchet amount currently you must show 11 months of historical change in your peak demand for electricity. A church many times has an annual load factor of 25 percent or lower. About 98% of churches fall under 35% for their load factor which is considered low as Oncor utility even defines 40% load factor as a low load profile. In this situation it makes sense to not penalize churches with super high minimum demand charges each month when they maintain a low load factor.

Churches are metered for demand by the electric utility in an unusual way from a churches perspective. The utility goes back historically and finds the highest kilowatts demanded in any one month. They bill a church a minimum percentage of this amount on their electric bill each month that could be in the range of a minimum fee like $300 – $500 and up. The problem is that a church is usually a fairly large facility and so it is capable of demanding quite a bit of energy all at one time if it needs to but that usually only lasts for the time of a service on Sunday on a hot summer day. If it is a hot Texas day and the AC equipment is old and outdated it might turn on and run all Sunday service long without ever cooling sufficiently. A peak demand might be reached that is extraordinarily high. So a church member donates 5 brand new high efficiency AC units so that doesn’t happen again. In the current law it does not matter what upgrades you made in efficiency. A new peak demand level has been reached and so for the next 11 month the church will have to pay $500 at minimum as their demand charge even if they use zero dollars in energy.  In order to lower the demand penalty number the church must lower that electricity KW demand number for the next 11 months and then the utility will make an adjustment lower in that demand charge.

What is Being Done to Change the Current Texas Church Energy Demand Charges?

A church that has a load factor of 25% or less is a low load factor church in the current PUCT rule but yet their is still a demand ratchet. A lot of law makers, organizations like TEPA, electric utilities, and city organizations are in agreement on changes that need to be made in the law specifically for churches because of their unique characteristics that are unlike most business uses of energy. This PUCT Substantive Rule 25.244 is attempting to dramatically change the law so that most churches will not have to deal with the huge hardship of paying an extra $300 – $500 in demand charges on their electric bill each month.

Will My Church Qualify as a Low Load Factor Church?

Many churches in the U.S. qualify as a low load factor non-residential electricity customer. Load factor is simply a way of describing how much energy was used in a time period, versus how much electricity would have been used, if the electric power had been turned on during a typical peak demand time for that customer. Many churches must work to avoid ever reaching a certain pinnacle of peak demand or that number could haunt you for the next 11 months as that is what your minimum demand charge is based off of. This long 11 month penalty is referred to as a demand ratchet.

How Do I Calculate My Churches Load Factor?

You can always contact your electric utility NOT your retail electric provider to find out what your load factor is and how they calculate it. Keep in mind if you signed up with a retail electric provider like Spark Energy, Bounce Energy, or Ambit Energy and live in Dallas you would call Oncor Electric Delivery to ask this question. If you signed up with one of these retail electric providers and live in Houston you would call Centerpoint Energy Utility.

The way Oncor and other electric utilities calculate the load factor percentage is by dividing the total kilowatt-hours consumed in a designated period such as a month by the product of the maximum demand in kilowatts and the number of hours in the month.

So let’s say we have a Texas church that uses 36,000 kWh in the month. We would divide that number by their peak demand which is 100 kW multiplied by 30 days multiplied by 24 hours in a day.

What you end up with is 36,000 kWh divided by 72,000 kWh which gives you a 50% load factor. What this means is that the church used 36,000 kWh and this was 50% of the total energy the electric utility planned to have available for this facility to use at the 100 kW demand level.

So Why Have Churches Been Cheated Out of So Much Money From Past Demand Charges?

The intended goal of the current demand ratchet rules was supposed to be a one size fits all approach but the law makers did not foresee how the special characteristics of a church would cause the law to significantly penalize a church compared to other nonresidential facilities.

You see the electric utility must plan at all occasions the likelihood that the church may need to hit that demand kW number of 100 kW. In order to offer this power guarantee to this facility they must charge a premium for this 100 kw high demand number that this church requires even though they don’t use a lot of monthly electric usage in kilowatt hours.

All electric utilities such as Oncor Electric or Centerpoint Energy must be able to meet peoples peak demand for electricity at all times or risk a blackout. When utilities structure in demand charges they can build up their infrastructure to offer this peak electric power when it is called for. This is why many churches in a city can open their doors on Sunday and turn on all their power at the same time and the city doesn’t have a resulting power outage.

The good news is that work is being done in the political arena for churches at the Public Utility Commission of Texas to make the case that churches that have a 25% and as much as a 35% or lower load factor should not have an 11 month demand ratchet in place. These demand ratchets make it harder for churches to work to lower their peak demand number because when they do make a change in the efficiency of their building they receive no reward for doing so unless they keep it low for the next 11 months.

Just as the PUCT has made changes to their energy demand penalty rules for certain agricultural businesses in Texas we believe there is a solid case for lowering energy demand penalties for Houses of Worship. The great news is that we even have the electric utilities on our side for changes to these laws for churches and they see that making these changes will not hurt their ability to provide reliable power to others on the Texas electric grid.

You can read more about the PUCT Substantive Rule 25.244 and a request from a local Texas christian organization to the PUCT …. click here for the Texas Baptist Christian Life Commission’s request to the PUCT

Sugar Land Texas Electricity

Compare Electricity Rate Plans and Companies in Sugar Land Texas

Sugar land Texas electricity prices are the same as they are in the city of Houston Texas. When comparing and choosing a Sugar Land Texas electricity provider you want to consider what rate plan you want to get on. The most popular electricity rate plans are the fixed rate plans. Some of the top fixed electricity plans people generally choose are for 1, 2 or 3 years. Occasionally electricity consumers in Sugar Land will choose a shorter term plan like a 6 month fixed rate. Be sure to mark on your calendar when your electricity rate is set to expire. If you do not mark on your calendar and your electricity provider in Sugar land does not send you a reminder email or mailing that you need to renew you will be automatically switched to a variable electricity rate plan.

The issue of a fixed rate expiring and a Texas electricity consumers rate automatically going to a variable rate is one of the banes of the Texas deregulated electricity market. Even when using the larger electricity companies like TXU or Reliant Energy you can find yourself on a no contract variable price much higher than your fixed electricity rate. The only way to insure you do not fall over to a variable rate is to mark it down on your calendar. Sometimes those reminder emails and letters get misplaced, lost, or the provider simply never mails it out.

You can find and compare several cheap Sugar Land electricity rate plans and prices by using the comparison chart at the top of this page. Rate plans are categorized from 1 year all the way out to 3 year. The most popular electricity plans are the 6 month fixed rates and the 1 year fixed rates. Electricity Bid currently recommend locking in fir at least 1 year while electricity rates in Sugar Land Texas remain some what low from their highs.

Generally we discourage residential customers from signing up on a variable electricity contract because the price can go up and down without any warning. Some electricity companies like Bounce Energy have a price ceiling in place so the variable electricity rate can only go so high. If you do sign up on a variable electricity rate with companies like Bounce Energy you are partially protected against price spikes in the variable Texas electricity market.

There were no deposit electricity rate plans in Sugar Land but the company offering this plan has discontinued that rate plan choice. Each no deposit plan had one catch or another and some of the popular ones still available but not recommended involve prepaying for your electricity service. The best we had seen so far involved paying an initial fee of $125 that you will have applied to your first months electricity bill but this rate plan has since been discontinued. This wasn’t exactly a deposit which you would get back at the end of your electricity contract but was applied in short order on your first months bill. Also, if you paid your Sugar Land electricity bill on time that no deposit electricity rate was lowered to the lowest rate plan available. This no deposit plan that is no longer available was for those energy consumers in Texas currently in a credit crunch that couldn’t afford paying a large deposit to their electric utility. This plan was available through Bounce Energy

If you would like to compare no deposit and prepaid electric service offers please use our compare tool at the top right of this page. All of these providers service the Sugar Land area and will be able to provide prepaid service in your area.

Texas Power

Are you Looking for a Way to Avoid a Deposit?

Precisely every single provider will ask you for a deposit unless they are a prepaid provider. Why is this the case? The reason is simply because you are buying a commodity from a company that has bought that commodity as a large block purchase, they have than hedged their investment the same as a farmer would do to protect the profit in that purchase. They than create an electricity plan in hopes that several thousand customers will buy the plan in order for them to execute this all in a way that based on volume they make a profit.

Your Texas power purchase will not make a provider a profit if they take on a large percentage of untrustworthy customers that will default on their electricity bill and leave them with excess energy they could not sell at a profit. When bad customers default not only do they leave the provider with energy they needed to get rid of they also are out whatever money the customer did not pay them.

Because providers only make money if they sell their block of energy to at least 3,000 or more customers this takes a lot of planning to get this right and a part of this is that they have a very low percentage of customers who default. By necessity these Texas power providers must check your credit and if you fall under a risk threshold that statistically shows you have a high probability of defaulting well then they ask you for a deposit.

On top of checking your credit and asking for a deposit, providers don’t advertise what that credit score risk threshold number is or how much the deposit will be ahead of time. They need to keep this information secret to get a high number of sign ups because the more sign ups they get the higher number of customers they will get.

Since all providers that aren’t prepaid providers check your credit it makes no sense for a provider to tell you upfront if you fall in this category will most likely reject you by asking you for a deposit of said amount. This will cause most customers to move on to the next provider who is less clear about this but then asks you for the same thing. Eventually you get tired of the continuous game that is more of the same and you settle and pay a deposit with a provider after calling or checking online with a few.

The point I am trying to make is that with any traditional provider you have a big positive in that they offer some good standard long-term fixed rates such as a rate that remains the same for 1 year and is reasonably priced. Don’t feel dejected when they check your credit, find out your credit score is poor and go on to ask you for a deposit. They are simply protecting their large investment in energy and you just don’t meet the statistical odds of paying on time every time.

Don’t feel cheated but understand that in America there are usually a host of options and in this particular case it would be to avoid the deposit altogether by looking at Texas power choices that are known as prepaid electricity rates. These prepaid providers allow you to pay in advance to guarantee the provider always get paid and the positive trade-off for you is that you always have your lights on and no deposit is required.

Our comparison widget can show you some of these prepaid choices if you discover that a post-paid option doesn’t fit your situation because they all want you to pay a deposit.

You may call us to order over the phone or learn more by calling 1-800-971-4020

Spark Energy Rates Rise Higher

Spark Energy Changes Focus to Selling Natural Gas in the North East

Spark has changed their focus from Retail Texas Electricity sales  to Natural Gas sales in the North East United States. They have been a great company to work with, and have shown high ethical standards, low rates, and fair business practices but do not seem to be actively seeking customers in the Texas Electric market. Although we are unsure as to how long it will be before they realign their efforts and aggressively pursue gaining market share in Texas, We look forward to working with them in the future. Until they do, we recommend Champion Energy as a great company to work with and great rates for Commercial and Residential Customers.  Champion currently has the best 1 year fixed electric rate offer in Dallas, Houston, and most other areas in the state of Texas. You can learn more about Champion Energy’s residential electric rates by visiting this article: Click here to check Champion  information

Spark Energy has raised their electric rate quite a bit higher then several other electric providers in Texas and no longer offers the most competitive electric rates they once did. Because of this we would like to suggest for those looking at potentially signing up on a Spark residential electric rate to go with a more competitive provider. As of January 2008 Champion Energy has a much more competitive energy price in both the Houston and Dallas Texas area. These electric companies serve other cities in Texas but for the sake of comparison we will use these two cities.

Who Do You Recommend Instead of Spark Energy?

Because Spark Energy has raised their rates recently due to the market going up we have a provider that has been able to stay below their rates on the 12 month term. Champion Energy has a very good 12 month rate despite the energy market’s prices rising. I am not sure how long this rate will last but I would sign up while it is still in the 9 – 10 cents per kwh range. Champion and Spark compete with several other terms which are listed in the chart below if you need something other then the standard 12 month fixed rate monthly term.

Speak to an Energy Consultant

Champion Energy Dallas

– $4.95 monthly service charge

9.2 cents per kWh – locked in for 12 months

No 6 month offer available

Spark Dallas (not available, Try Champion at a cheaper price)

– no monthly service charge

12.4 cents per kWh – 12 months

12.4 cents per kWh – 6 months

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Spark Energy Houston (not available, try Champion at a cheaper rate

– no monthly service charge

12.8 – 12 months

12.8 – 6 months

Champion Energy Houston

- $4.95 monthly service charge

9.8 cents per kWh – locked in for 12 months

Not available – 6 months

Not available – 24 months

Not available – 36 months

Click here to learn more about Texas Electric Companies

If you live in Wichita Falls Texas, Dallas, Houston or surrounding areas and need Texas electric service feel free to give us a call. An energy consultant can provide updated rate information for commercial and residential customers. You can click on the button above to make a free call to Electricity Bid or call us at 1-800-971-4020

Champion Energy Retail Electric Provider

Saving Money On Electricity In Houston

Champion Energy has a very low cost electric rate in the Houston area but current rates now available may be even better so be sure to compare their prices with the many providers and rates listed in our chart. You can find our compare tool at the top right of this page. Back in Jan 8 of 2008 Champion’s price was lower than any of the other electric companies I had seen so far except for Startex Power. Currently there are new providers out there that may beat them both.

As of Jan 8 2008 they only offer one term at 12 months but this is the most popular term for most people so it usually works for most peoples needs. The rate for January is at 11.1 cents a kWh with a $4.95 monthly service fee but Champion’s electric rate has gone up since then. If you add in the service fee into the rate goes up about .004 cents kWh which is still a lower rate then the most competitive providers offering residential electric service in Houston. For a more competitive electric rate then Champion Energy with no monthly service fee we recommend Startex Power. Depending on your area in Texas their rate will be higher or lower.

If you live in Dallas Texas, Tyler Texas, Alpine, Fort Worth or other cities on the other side of the state there are cheaper providers then Champion. You can find out more here. Learn more about Texas Residential Electricity.

North Texas like Dallas and the cities around Dallas have some of the lowest electric rates in the state in comparison to Houston. We have a comparison chart for commercial customers and a more straightforward comparison for residential customers. If you go to the page for your county or city you will see an advertisement with the lowest cost energy providers for that city on the top left.

Learn more about Texas electricity

Learn more about Champion Energy


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