Electric Company Keeps Calling Asking Me to Renew My Contract

If you have an electric company calling you and sending you mail outs asking you to renew an expiring fixed rate contract you are likely benefiting.

Most people get their highest electric bill after they let their contract expire and the rate defaults to a variable market rate.

The variable prices are not hedged rates and so the provider is taking on a significant risk by selling a price that is not locked in.

The provider can eliminate this risk by adding in their profit margin and allowing the price increase that may happen to roll over to the customer.

Market electric rates can sometimes be lower than what you could sign up on with a fixed rate but an electric provider is unlikely to give you these savings if you did not renew your contract.

What they will do instead is give themselves an added 2 cents or more per kWh added to the existing profit margin.

So you may have had a significantly cheaper electric bill over past years while on a 1 year fixed contract.

Your electric bill might have been under $100 a month but as soon as that contract expired your rate went to a variable price and you racked up almost 2 months of usage on a higher electric rate and perhaps had a $200 plus electric bill for the two months you were off contract.

An electric provider that gave you an excellent deal in the beginning may have hoped a certain percentage of their customers would allow their contract to lapse so they could meet their profit target.

This is a warning to procrastinators. Don’t let your electric service contract expire without renewing with the same provider or shopping and ordering with a cheaper provider.

The providers would hope you will let it slide but it’s not a smart move for a family budget that needs to stay on target.

In summary, let me suggest a way to avoid the electric rate price uptick by setting an alarm to ring on your phone around the date of your contract expiration. Make a committment to shop and order electric service when that alarm sounds so you don’t pay $200 – $400 more for electricity than you really needed to.

Don’t Get Bitten This Winter By Your Variable Electric Rate

Variable electric rates are not all bad but there are problems with them that if not understood can leave you like many others, very confused when your rate goes up.

As the name implies a variable price does not guarantee by any means that your price will always stay the same or go down but never up.

The variable price is just as likely to go up as it is to go down.

Most electric companies in Texas will give you an introductory rate when getting you to switch to their variable price. The rate looks exceptionally low compared to locking in at a much higher fixed contract for 12 months.

Many people simply see that cheap variable intro rate and sign up. Once your rate goes up and you realize it has gone up it is usually too late to switch away before you get a sticker shock electric bill in the mail.

It is possible that 45 days of electric usage could have accumulated during the time your price was jacked up. Since you get billed every 30 days you will likely disconnect a week or so after that.

You will get billed at the higher rate for over a month before you can switch away and this may have caused you to spend $200 or more than you were planning on.

If your price follows an index like natural gas you can rest confidently when your rate is high because you know you will be rewarded when commodity prices come down.

The problem is that most providers do not make it very clear how their variable price works and so you really have no assurance of anything.

To save you all this headache try a fixed rate like what I usually go with. I sign up for 12 months on a fixed plan and have no worries for a year. At the end of the year I get a reminder email to shop prices and I simply renew with who I consider to be the best provider for another year.

McKinney, Texas Electricity Service Comparison

Did you know that heating and cooling accounts for over half of your total monthly electric bill?  That could be why so very many of the energy saving tips out there focus on this area.  One such tip is to regularly inspect your ducts to make sure they are not damaged or torn.  Really…do you want to pay to heat and cool the area under your house?  No.

Reducing your energy consumption is a win-win situation.  You save money every month and reduce your carbon footprint at the same time.  But there is another way to keep that bill down and it is through ElectricRates.  We research all electricity service providers in the McKinney, Texas area to find out what rates each is charging.

Use our online comparison tool for a free pass to this information.  You can choose a company that is charging less per kilowatt hour than you are paying now and order service with them online through ElectricityBid.  No funny games either!  We average in any additional surcharges and fees and show them to you in the final calculated rate so you pay what they said you would pay.

Call our 800 number above today to speak to an energy consultant.  We don’t want you paying too much for electricity in McKinney, Texas any more than you do.  Our energy consultants are always happy to assist you in lowering your monthly power bill and will be happy to address any questions or concerns you have.  Why wait?  The savings are so close!

Electricity Rates Are Cheap Right Now

Unless you are an energy professional you probably don’t spend a great deal of time paying attention to what electricity rates are doing in your town. Some summers you may have been able to sign up at a very cheap electricity price and then the next summer prices are high again. The same type of price fluctuations happen in the winter as well. Some people spur on the misconception that electricity rates are always higher during the summer. This is not always the case it is just that there is usually more price volatility in the summer time. This price volatility can cause electricity rates to go down dramatically just as much as go up.

Winter months can be just as volatile to electricity prices. Fortunately this winter electricity prices have remained low. Even today as energy prices are up you can still lock in at a very good electricity rate. For the last several weeks prices have been coming down and looking better and better. Electricity can only come down so much and at this time we are experiencing some very good energy price levels. If you are wanting to wait until electricity rates come down even further I do not recommend this strategy. We have a good position right now to lock in for 1 – 2 years on a very good fixed electric rate.

To wait and see if prices come down even further can get you in a delimma as you probably haven’t considered the risk reward of locking in your rate compared to waiting. By waiting you can see energy prices go up 10% per week until all of a sudden only 3 weeks of waiting for electricity rates to come back down your energy prices are 30% higher. Most people eventually become scared as the price seems to be ever increasing and they buy high.

We want to encourage those wondering when to lock in to a fixed electricity price to not wait until electricity rates spike up. Go ahead and get in at a historically low level in electricity prices. You can have a predictable fixed electricity rate that will not change or as long as you decide to sign up for. You can always do a blend and extend contract later on if electricity rates dramatically decrease even further. At this time I think we are close to a bottom in energy price levels.

To begin to sign up for either residential or commercial electricity in Texas you will need to click on the “Compare Electricity Rates” link at the top of this page. For commercial rates you may contact us by clicking here.

Energy Service Can Be Cheaper When Shopping Around

You often hear that the electricity energy coming to your home is all the same so it really doesn’t matter which electric company you choose. This opens up the window for the sales person to then tell you that the most important point is to pick the cheapest electricity company since the energy is all the same. I agree with this to a point.

A problem comes in when a customer approaches the Texas energy service shopping process in this way but fails to understand the rate. Another problem can crop up if the customer chooses an electricity company that is new to the market, has undercut almost all established Texas electric providers, and has a small amount of capital backing. A small energy company that comes in and all the sudden is offering the cheapest electricity rate causes some of the larger energy suppliers to salivate. Why is this? The smaller company is in danger of going out of business and having the PUCT take all of their customers away from them and giving them to what is known as, “The Provider Of Last Resort”.

Based on rules created by the PUCT any qualified Texas electricity provider can become a POLR operator. If your electric company goes out of business it doesn’t matter how good your energy price was you will have to go to the POLR. Some ask the question, well will the rate be comprable to the discount rate I had with the cheapest electric provider at the time? The answer is overwhelmingly no. When a small no name electric provider in Texas goes out of business in this situation it is almost always related to a wrong bet on the balancing energy market known as the MCPE index.

Texas electric companies buy their energy as well as sell excess energy on this ERCOT managed energy market. The MCPE market is like a clearing house to allow suppliers and generators to buy and sell energy. Some of the more reputable established electric companies in Texas will buy their energy on this market but will hedge the price. Hedging the price of the energy you sell is considered smart business among retail electric providers. By hedging your energy you are not exposing your capital investment in your provider to risk. If the MCPE market were to double or triple in price a provider who only bought but did not hedge may be subject to releasing all of their customers to the POLR by mandate of the PUCT.

When the balancing energy market doubles in price in a given month it will usually send these smaller electricity companies that did not hedge out of business and their customers over to the POLR provider. The electricity prices for Texas energy consumers during this time will be much higher than what the discount electric company was able to offer them a few months earlier. These customers end up much worse off than when they began.

I am not saying don’t choose the cheapest electric company in Texas I am just encouraging you to do a little check on the company to see who they are and how long they have been in town before deciding for sure. The situation I bring up happened a couple summers ago when Riverway Power and National Power were selling without hedging.

Beyond operating an electricity company in an unprofessional manner like this you may also find that a new recent start up is not able to bill you correctly. You may have some initial billing problems as the electricity provider attempts to work out the kinks in their new system. If you do go with a recent energy service company start up pay close attention to your electricity bill each month and make sure it is accurate. One way to do this is to contact the poles and wires company in your area and ask for your usage data file every 3 to 6 months. Use this file and compare it with what you were being billed during those same months. ALso compare the TDSP charges in the file with the TDSP charge line item on your bill. Make sure the dollar amounts line up.

Beyond billing and the danger of being sent over to POLR you will receive a cheap electricity rate if you choose the cheapest electric company and it will be just like the energy that passes through the wires from TXU Energy to the house next door. Hopefully your billing will be accurate and the company will stick around.

One last problem, there is still usually a trade off when it comes to customer service. You may have difficulty reaching a live person in a reasonable amount of time to ask a question of your electricity service company. In this case be sure to check their website for a customer service support email address. Smaller electricity companies usually are good about responding quickly to email requests while their phone lines are tied up. If this is your only problem you are in good hands. Sure you might not be able to talk to a customer service person every time you would like but you do have the cheapest Texas electricity rate.

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

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