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

Houston electricity rate plans offer flexibility to the energy consumer

In Houston Texas electricity service customers are beginning to see that choosing a variable electric rate plan and waiting for it to eventually go up is not the best choice.

The wait and see game works for awhile but eventually you can get stung as did Steve Smith who remodeled my house not but a few months ago.

We needed some drywall hung in the living room and some electrical rewiring done and me and Steve started talking. He mentioned that he used to get on a the cheapest variable electricity rate in Houston and wait and see.

If his rate started to go up to high he would simply shop around again and choose the next best offer out there at the time. He did this until one month electricity rates in Houston were sky high.

He could not find a good low priced variable electricity rate plan or fixed plan for that matter. He started to see how doing the wait and see game may work for a little while but you will eventually get burned.

He went ahead and bit the bullet and signed up for 6 months at a pretty high price for that time in Houston Texas. Fortunately after 6 months rates came back down to normal price levels.

He now is on a fixed electricity rate in Houston Texas and enjoys the price assurance a fixed rate offers and the time saved not having to continuously shop for Houston electricity companies every few months.

Steve is now out of the home remodelling business and has started a small sub sandwhich shop in the East Texas area. He used ElectricityBid to procure his commercial electricity rate and we look forward to working with him in the future when his contract comes up for renewal.

If you need to shop for commercial or residential electricity in Houston TX please use the compare tool at the top right by entering in your zip code. You can compare multiple Houston TX electricity companies and find the rate plan that makes the most sense for your situation.

In Texas You Have the Right to Choose an Electricity Company

If you are relocating from out of state or are moving to a different Texas city from places like Austin, El Paso, Garland, Plano, El Paso and a few other areas you may be happy to know that you may now choose your electric company. Texas is the most competive electricity market in the world and because of this it has helped in lowering electricity rates for residential and commercial electricity service customers.

To begin shopping for residential electricity rates and comparing electric companies just use our comparison chart at the top left of this page. You will need to enter in your zip code and a list of electricity rates and providers will appear. Pick the cheapest provider based on either a fixed or variable term.

Make note that a variable price may be lower but it is subject to go up in price after the first month. This is because you are not locking in your electricity price when choosing a variable rate.

For most people a fixed electric rate makes more sense because you will have a predictable electricity rate and you will know what the price will be each and every month.

The choice in Texas is called the Power to Choose because you have the ability compare over 20 different competitive electricity providers and find the cheapest rate.

Clute TX Electricity Rates and Plans

In Clute Texas there are several electricity companies competing to win the business of both commercial and residential electric service customers. Not all companies will be cheaper than Reliant Energy but many are. Before just going with the cheapest Clute electric provider it is important to understand the plans available.

Our electricity rate comparison chart categorizes the electricity rate plans based on term. There are variable electricity rates and fixed rates. Don’t just sign up with a variable price because it is the cheapest. Variable prices change each month and the positive aspect to a rate like this is that you will not be locked into the Clute electric rate for any specific term.

To get started click here to use our residential electricity comparison chart

This means with a variable rate you will find it to be worthwhile if you will only be at a location for a short time. A variable electricity price follows the energy commodities market up and down. If you are risk averse it is best to get on a fixed electricity rate instead.

A fixed electric rate can be anywhere from 3 months to 36 months out. A fixed Clute TX electricity price simply means that the rate will not change on you for the entire term of the contract. For most people a 6 month – 1 year fixed electricity rate is the best choice. You will not have to worry about the electric rate fluctuating in price every month.

We recommend comparing Reliant Energy’s prices with the electricity rates in this chart. We think you will find substantial savings. All fees and charges are included in the prices in our comparison chart. The only think not in the rate are taxes and this is industry standard.

When looking at too good to be true offers elsewhere on the internet you may see some energy suppliers leaving off TDSP charges or line loss and ancillary charges. This means that although their fixed electric rate appears the cheapest in their advertisement you will see a completely different rate when you get your first months electric bill.

Our company does not have a business model based on tricking customers. Our comparison chart averages in all fees in the rate so you know what you will be paying. Since everything but taxes is in the electric rate you will be able to compare apples to apples with Reliant Energy and other reputable electricity providers in Clute TX.

To get started click here to use our residential electricity comparison chart

Killeen Texas Electricity Companies

Compare Residential Electricity Rates in Killeen Texas by Using the Comparison Chart Below

For those living in or around Killeen Texas and are looking for an affordable electricity company we recommend checking out our electricity comparison chart. If you need a commercial electricity company in Killeen then please click on our contact link to feel out a short rate quote form. A commercial energy consultant for the Killeen Texas area can call or email you back with rate quotes from multiple Killeen Texas electricity providers.

Our Killeen TX residential electricity company comparison chart can be found simply by clicking on the comparison link in the menu bar above. We have all electricity rates, fees and charges disclosed so you know exactly what the electricity rate, monthly service fees, and TDSP charges you will be billed for by your electric provider will be.

If you would like to speak with a Killeen Texas energy consultant you may call us at 1-800-971-4020. One of our energy consultants can go over different questions and issues related to electricity prices. One of the most common confusions about electric rates has to do with transmission and distribution service provider charges. Commercial electric rates do not initially have the TDSP charges bundled into the electric rate. This unbundled rate is not to be deceptive as all commercial electric providers do not initially bundle the rate until they know your estimated or historical electricity usage.

Once the Killeen Texas electricity provider has your estimated usage they can quote you a total bundled rate. Most commercial electricity providers do not mark up the TDSP charges although it is not considered against PUCT regulations to mark them up so it is important to watch out for this practice.

Residential electricity rates are different in that most Killeen TX electricity providers will “fix” the TDSP charges and bundle them to the “energy only” charge giving you a total bundled rate. Due to a new PUCT and ERCOT rule all providers in deregulated Texas areas must pass through an additional smart meter or advanced meter fee. This fee is about $3 – $4 more per month on all Texas energy consumer bills regardless if their TDSP company has installed the new smart meter device yet. There may also be a monthly service fee some Killeen TX electric companies will charge that is generally about $4.95 – $9.95 that is disclosed next to the rate. Some Texas electricity providers make the monthly service fee hiddeen from view so be sure to check the “facts label” if you are unsure if there is one. Our residential electricity rates include all fees and charges and any monthly service fees are clearly listed next to the rate.

Some electric companies in Killeen will never charge a monthly service fee unless the energy customer uses under 500 kWh a month in electric usage. Since not very many customers use less than 500 kWh a month it isn’t a concern for many however if you have a small apartment and are single you might want to find a provider in Killeen that does not have a monthly service fee regardless of the amount of electricity usage used.

Electricity Bid helps you find an electric rate and provider to save you money and keep life simple.

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