Many electricity rates are broken down into two components: supply and delivery. Supply charges cover the cost of generating power, while delivery fees help bring that power from power plants to your home or business. Did you know that some electricity providers charge customers for the cost of reading their meters? Though the fee varies depending on the provider, it can accumulate and become a burden over time. One way to avoid this fee is to switch to a smart meter that can be read remotely. Electricity bills can be confusing and overwhelming, especially with hidden fees that are often included.
However, you can avoid overpaying and ensure you get the best possible rate by understanding the components of your bill and being aware of potential hidden fees. To avoid surprises, read the fine print of your contract, reach out to your provider with any questions or concerns, and stay on top of your bill.
However, some energy companies hide additional fees behind these two main line items. Be aware of these hidden fees when shopping for an energy plan to avoid unwanted surprises on your bill.
Review Your Contract
When shopping for an energy plan, carefully review the contract terms and conditions, the Electricity Facts Label (EFL), and the customer rights page. Understanding these documents can help you avoid paying hidden fees and extra charges on your electricity bill.
These hidden fees are often tucked away in the company’s terms of service but are hard to find and easily overlooked. They can also be challenging to dispute once you’ve paid them. The best way to avoid these fees is to fully understand the company’s terms of service before you sign on the dotted line.
Another way to avoid hidden fees is to look for a level billing program or an average payment plan that offers bills about the same every month. These programs can make it easier to budget your energy costs and can help you avoid expensive late payments and late disconnections.
Finally, check the introductory offer details on any plan you’re considering. Many plans have a low introductory rate for a set period, but the rates can skyrocket once that initial period ends. For example, in May, Duke Energy scaled back a proposal to raise its basic facilities charge in South Carolina after customers and consumer groups complained.
Do Your Research
There are many different electricity providers, like the electric company in Midland, Texas, each with unique rates. Researching your options is essential to make the best decision for your needs. A few things to look out for include electricity usage tiers, fixed charges, and seasonal rates.
When researching your electricity provider options, look at their plan details and compare them to their competitors. Also, be sure to ask the energy provider if they have hidden fees or extra charges not mentioned in their contract.
Finally, if you are considering a fixed-rate plan, read the fine print and understand how the contract terminates. Some electricity companies will charge you a termination fee if you try to get out of your contract early. This fee can range anywhere from $150 to $395, depending on the length of your contract.
The deregulated market makes it more competitive than ever when finding a good electricity provider. Electricity providers are pulling out all the stops to win your business. Some even offer free giveaways like slick energy-related gadgets to lure you in. While shopping around for the best prices and plans is always a good idea, never let your emotions get ahead of you.
Look at Your Bill
Regarding energy bills, the small print is often where hidden fees live. Many electricity companies charge various rates, including usage tiers, fixed charges, seasonal rates, and more. These can all add up to a much higher bill than expected.
Some of these fees can be avoided by reducing your energy usage, choosing a provider that doesn’t have a flat fee (or at least one with a low minimum), and looking closely at your monthly electricity costs. Others, however, can only be avoided by being proactive and understanding how your bill is calculated.
For example, ratchet charges can be a large portion of your electricity bill because they are charged monthly for any peak demand level assessed in the past year. This is a common practice in some states. Still, it can be avoided by using smart meters that update daily energy consumption so you know if you’re on track for an unexpectedly high bill or are close to your maximum allowed usage.
Another thing to look for on your electricity bill is bundled charges that both your REP and TDU charge. The REP can legally mark up these rates, significantly increasing your bill. This is why finding a provider that doesn’t include bundled payments on your electricity bill is essential.