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

Van Texas Electricity, You Can Compare Companies and Save

In Van Texas you can compare multiple retail Texas electric providers rate plans against each other, find the cheapest one, and order electric service at a substantial discount.

Our online comparison tool is easy to use. You enter your zip code in the box and click on “Compare”.

From there a list of Van Texas electric providers and rate plans will appear.

You can rest confidently that all fees and charges are bundled into our electric rates excluding taxes.

We are unlike most electricity companies and aggregation sites in that we take steps to bundle in all fees and charges so you are not tricked into a rate that appears cheaper than it really is.

We have even gone so far as to allow you to adjust your average monthly kilowatt usage in case you use more or less than what we have the default set at to calculate your rate.

We have our rates calculated with all fees and charges built in based on the average Texas energy consumers monthly electric bill so chances are good the rate you see will be at or higher than what you will actually pay.

To crystallize what I am trying to tell you here in simple terms, our rates are straight forward without the standard hidden fees and gimmicks, you can compare multiple discount providers, and you can order your Van Texas electric service online.

If you have any questions our Van Texas energy consultants located in Tyler Texas can assist you. You may call us at 1-800-971-4020.

Tips for Selecting a Texas Energy Provider

Independence Day Promo Electric Rate From Bounce EnergyEvery May, our contract with our Texas energy provider comes up for renewal, and we have the power to choose whether to stay with our current provider or switch. In looking for a new provider and/or plan we not only want a good rate, but we first have to decide if we want a contract and what kind, and if we want to use green energy, all the while paying close attention to possible promotions and rewards programs. Here is the process we usually go through.

In order to choose a provider, it is best to start with a plan. The two most common plans are variable rate and fixed rate. With a fixed rate plan you’ll pay the same rate for electricity throughout the term of your contract (which is typically 2 years). The price can change only to reproduce actual price changes that are allowed by Public Utility Commission rules due to changes in law or regulatory charges. This plan is great for people who have a household budget since the rate stays the same, which protects you from rising energy prices; however, if market prices fall you have to wait until your contract is over to switch to a lower rate. If you think you might want to discontinue service after a short period of time, look for a company that does not have contracts or offers short term contracts. Companies that have contract periods often have a minimum term and if you cancel your service before the contract period ends, you might have to pay a penalty.

Variable rate, or often referred to as “month-to-month”, plans have no minimum contract period and are based on current energy market conditions. With this kind of plan, the rate you pay can fluctuate depending on the changes in the electricity market. Which means you can benefit from lowering energy rates and could help you to save on your energy bill. However, just as this type of plan allows you to save money when market prices fall, it could also have a negative affect if market prices rise because so would your electricity rate. For some people, dealing with constant changing electricity rates can be stressful so a fixed rate works best for them. On the other hand, there are others who like being able to always get the best rate and don’t mind searching for it, making a variable rate plan their best option.

Next is to choose between a non-renewable (standard) and a renewable (green) plan. You can check a Texas energy provider’s Electricity Facts Label (EFL) to see if their plan produces electricity from renewable resources such as solar, hydroelectric, landfill gas, biomass, geothermal, or wind. EFLs allow you to easily compare what each company has to offer to find the best fit for your energy consumption and budget. Each label contains the following information:

  • Electricity Rate: This is made up of the electric company’s average price per kilowatt-hour (kWh) for 500 kWh, 1000 kWh and 1500 kWh, as well as a possible monthly customer service charge and seasonal pricing. Rates can differ depending on the number of kilowatt-hours so it’s important to look at your past usage. With some companies the more kilowatt-hours you use, the lower the rate will be.
  • Contract Terms: Some companies have minimum terms and will charge you an early cancellation fee, while others may not require a contract.
  • Power Generation Sources: The electricity provider should list from what resources the electricity is produced (coal, natural gas, renewable energy, etc.) The percentages will be graphed to compare them to the average usage for electricity generation statewide.
  • Emissions: In this section companies provide details on the types and percentage of emissions they create per kWh of electricity generated. The energy provider’s percentages will be graphed to show if the emissions are better or worse than the Texas average. This might be an important section for you if you’re interested in decreasing your carbon footprint.

Once you’ve decided which plan works for you, then the next step is to compare Texas electricity companies. You can do this by going to ElectricityBid.com where you can compare prices and ratings. Just enter your zip code and then pick the kind of plan you want. You will be able to see different Texas energy providers and their company rating, different plans offered, cancellation fee, if electricity is produced from renewable or non-renewable resources and the terms and rate for each plan. These websites will also show you promotions and incentives offered by each company and if they have a rewards program.

Lastly, review and compare all the possible incentives and rewards programs offered. Some companies offer rewards programs to their customers such as cash back and gifts. For example, Bounce Energy is currently rewarding its customers for paying their bills on-time. Customers who pay their bill on-time for 6 consecutive months receive their choice of 2 movie tickets or a free companion airfare ticket and also gain access to Bounce Energy’s VIP Customer Service line. The longer you pay on time, the more you get in return. Power providers might also offer incentives or promotions for signing up with a new plan such as gift cards, airline miles, charitable donations, or better rates if you sign up online. For example, Bounce Energy’s Express Move plan. This short term fixed rate plan makes moving much easier by not only turning on your electricity, but Bounce Energy will submit your USPS Change of Address form, add your name to the Do Not Mail and Do Not Call lists, give you free identity protection service and give you either a $25 Walmart or Home Depot gift card. Bounce Energy’s Terrific 12 plan gives the customer their choice of $25 gift cards to Target, Wal-Mart, GAP Inc., Shell, or a $25 bill credit.

As you’ve probably seen, there are many Texas energy providers and plans to choose from but by doing some research you will be able to find one that is right for your electricity needs and budget.

Online Resources
http://powertochoose.org
http://www.electricitytexas.com

Texas Electric: What Happens If You Don’t Choose a Provider?

 

With all the talk about choosing your electricity provider, many still haven’t done it. “So,” you may be wondering, “what happens if you don’t exercise your right to choose your Texas electricity company?” Following is some insight.

When you elect not to choose your electric provider, your service will be supplied by what’s called an Affiliate Retail Electric Provider. Who/what is this?

An Affiliate Retail Electric Provider is an entity associated with the original Retail Electric Provider (REP) that services your area.

If you don’t know which company this is, you can find out by logging on to sites like ElectricityBid.com. You can speak with a representative there, or plug in some info like your zip code to find out which Texas electric companies service your area.

What You Give Up by Not Choosing Your Texas Energy Company

The most important thing you give up is energy savings. Why/how?

Conventional Texas electricity companies offer so many money-saving plans for all types of consumers. For example, if your credit has gotten a little dinged up in the last few years – and many have seen this happen with the raging foreclosure crisis and steep job losses — you may think that the only plan you can get is an expensive one like a prepaid electric service account.

This is far from the truth.

With no-deposit and low-deposit electric plans like the Texas LITE-UP Program, energy savings have never been easier to get.

FYI, the Texas LITE-UP Program gives discounts to customers from May through September on their electric bill.

So “choose to choose” your Texas electric provider. Sites like ElectricityBid.com make it so easy. Literally, with a few clicks of the mouse, you can be on your way to reducing your monthly electric bill.

Compare Electricity Rates in Texas – Click here

Texas Electric: What Is a Provider of Last Resort & Why You Want to Avoid Them

Anything with the phrase “last resort” in it is probably something you want to avoid — unless you’re talking about scoping out Caribbean vacation spots (as in, that last resort we toured was gorgeous). When it comes to energy, you don’t want to be in the “last resort” club.

As it relates to Texas electricity, following is what a Provider of Last Resort (POLR) is, and why you want to avoid being a part of their roster.

What is a Provider of Last Resort?

Actually, from a consumer standpoint, a POLR is a good thing. They are Texas energy companies that act as a back-up in case an existing service provider goes out of business.

Texas electricity consumers have a deregulated energy market, which has produced the need for POLRs. Why? Because with deregulation came a lot of competition. And, some of these new companies had neither the market savvy nor the secure financial backing it takes to be in business for the long haul.

Many of them came on the scene offering Texas electricity consumers low rates, but they couldn’t deliver when certain market forces shifted. So, they went out of business – leaving thousands of customers potentially stranded.

Enter POLRs. The Public Utility Commission of Texas (PUC) designated certified retail electric providers (REPs) to act as POLRs for each customer class in each electric utility service area open to competition.

While this is a comfort, it can be a nightmare in that there is no guarantee that the rate you paid with your old Texas electricity company is the one you’ll get with your new one. And, if you’re already paying the high cost of a prepaid electric service plan, your costs could escalate even more.

Why It Pays to Choose a Traditional Texas Electricity Company

This is why it pays to sign on with a traditional Texas energy supplier – even if it means saving up to pay a deposit. Although, many have low-deposit and no-deposit electric service plans you may qualify for. All it takes is a phone call to find out.

To Compare Texas Electricity Rates please click here

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

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