Reducing Your Texas Electricity Rate

Some providers claim there are no demand charges with their electric rate and others claim that there are. So who is telling the truth? Do some electric companies in Texas charge a demand charge while others do not? The truth is that with residential electricity in Texas the demand charges are fixed and built into the electric rate with most providers in the TDSP section of the bill. TXU and Reliant have rates they offer that charge a seperate demand charge that fluctuates. Liberty Power has been known to quote electric rates without adding to it the TDSP charges. These electric companies represent the exception to the rule that rates are usually quoted as an all in price. That means that when an electric company in Texas quotes you a residential electric rate they are probably quoting you the entire all-in rate including demand charges. With residential electricity the demand charges are a part of what are known as TDSP charges or Transmission and Distribution Service Provider charges. These charges are fixed as we have said and are non-negotiable. The TDSP charges are almost like a tax as they are regulated and past through on your bill with no markup. In Houston the TDSP company and monopoly that owns the poles and wires that delivers the power to your home is Centerpoint Energy. In Dallas the TDSP company is Oncor Electric Delivery which used to be called TXU. The demand charges cannot be negotiated lower but you can do some things in your home to lower those demand charges if you are on a rate with Reliant or TXU that still charges you a demand fee. I like to use the analogy of a bathtub. The demand is like when you turn on the bathtub faucet full blast. The amount of water allowed out of the faucet at one time is like demand (KW). The amount of water that fills up the tub even if at a small trickle is the kilowatt hours of electricity (kWh).

This analogy means that even if you demand energy for only 30 seconds all at once during the day you will get hit with a very very large charge that makes up a big percentage of your electric bill if on the rate plans we mentioned with TXU or Reliant Energy, especially if you didn't use much kwh energy during the course of the month. So during the summer when you experience a very hot day and one of your children turns the air conditioner down to 50 degrees and you catch it quickly and turn it back to 70 degrees you will likely get hit with what looks like a very unreasonable demand charge.

If you do not like the idea of demand charges then we recommend signing up with a company who does not charge a variable demand charge. A few energy companies that offer an all in rate without a seperate demand charge that fluctuates are with Champion Energy, Startex Power, Spark Energy, and Affordable Energy. All 4 of these electric companies have been in Texas since the beginning of deregulation. None of these providers is considered a fly by night energy provider like the failures of Riverway Power and National Power Company who both went bankrupt this summer. All of these energy companies offer online bill pay as well as the ability to just bill their customers. Affordable Energy right now offers one of the lowest deposit requirements if you are considered a credit risk that is normally asked for a deposit by electric companies.

After you have chosen a cheap and reputable Texas electric company we recommend considering ways to use less energy. One way to do this is by having an electrician install a surge capacitor at the breaker box. This will cost aproximately $100 for parts and labor. A second option is to unplug any devices that normally have a red light showing even while turned off. These appliances in your house are taking energy from the socket even though they are powered off. By unplugging these devices when not being used you will save quite a bit of wasted energy. Have an insulation company blow in insulation into your attic. You will be able to keep your house cool at a much higher setting on your ac unit. Considering your AC accounts for over half of a Texas electricity bill you will save the most money by having someone blow in insulation into your attic. By an air conditioning additive for your air conditioning system. The only patented product that has been proven to reduce the energy consumption of an ac unit by 20% is called Permafrost. You can buy this product exclusively from Affordable Energy. A final option I think all households should consider to reduce their electric bill is to add radiant film to their windows. There are several suppliers of cheap radiant film products you can place on your windows that will block about 98% of the radiant heat that tries to enter the house. Windows is one of the primary ways energy and cooled air leaves the house.

I hope these tips have helped and we sincerly hope you are able to reduce your energy bill by several hundred dollars by implementing some of these steps. Remember to get a list of the best texas electric companies. Find the cheapest electric rate and sign up with them. Many times there are online discounts if you sign up online with an electric company instead of calling them. The next step is to find some affordable energy efficiency steps you can take to make your home more efficient. Finally, use less electricity by not turning that air conditioner up as high. Your energy efficient home should allow you to stay comfortable at a higher setting.