Understanding Electric Bills in Texas

Understanding electric bills is an important part of navigating the market. Texas’ deregulation of its electricity market offers consumers more choices compared to the rest of the United States.

This is partly thanks to the lack of obstacles for new electricity generators and providers to enter the market and compete. This vibrant competition helps bringing prices down, however, it can also be confusing.

Though the average price of energy in Texas is lower than in other states, consumers still need to know how to navigate the market to get the best deal.

Knowing how bills are calculated, what those individual charges on your bill mean is helpful. Today’s article will cover all these topics and also tips to lower your bill.

Common Charges on Your Texas Electricity Bill

The Public Utilities Commission of Texas (PUCT) maintains a list of 23 different kinds of charges that appear on your electric bill.

The most meaningful and common charge you’ll see on your bill is the energy charge, which is measured as a price per kilowatt hour (kWh).

Here are the main things to know when reading your electricity bill:

The Kilowatt Hour (kWh)

A kilowatt-hour is a measure of how much electricity your home or business uses over an average hour of the day. Your electricity consumption is measured in kWh and it’s the main driver behind your electric bills cost. In Texas, your electricity consumption changes from month to month as the weather and the outdoor temperatures change.

Typically you will see the electricity costs change as your consumption change. For fixed rate plans, this is straight forward in most cases. However, some plans have special rules. For example, a minimum consumption, below this threshold fees apply and above you might get discounts.

Other plans might offer free electricity during certain hours. So it is very important to know not only how much electricity you use in total but also when you used.

Electricity providers calculate your electric bills based on all those factors.

Kilowatt hours are measured with electricity meters which are installed Texas utility companies. Metering your electricity consumption is one of the services offered by them and charged in your bill. Depending of where you live, you transmission/distribution service providers (TDSPs, a.k.a. TDUs).

How Smart Meters Can Help Reduce Your Electric Bills

Traditional mechanical meters have been used for decades to monitor energy usage across the country.

They work by measuring the amount of kWh passed through the meter and into your home or business every month.

Mechanical meters require a person to come to your home once a month to read the electricity usage and report it back to your company. This process is inefficient and open to human errors.

Since 2005, the PUCT has allowed utility companies to add a surcharge to your bill for the cost of smart metering.

Most homes and businesses in Texas already have smart meter installed by the utility companies. Smart meters can help reduce your electric bill by doing the following:

●      Eliminate the need for a human meter reader to come to your home once a month.

●      Allow your meter read to be more accurate.

●      Allows your utility company to measure kWh in 15-minute increments. This improves flexibility in electricity plan structures.

If you’re one of the many Texas residents who can shift their electricity usage to off-peak hours, enables some pretty huge savings on electricity.

TDU/TDSP Charges (How the Utilities Get Paid)

The other charge you’ll likely find on every bill is your TDU or TDSP charge. TDU stands for Transmission/Distribution Utility. And TDSP stands for Transmission/Distribution Service Provider.

This is the charge that every light company in Texas pays to use the power lines, poles, and meters that deliver electricity to your home or business.

TDUs own this equipment, and they provide maintenance, upgrades, to prevent and repair outages. As a result, they offer the delivery service to the electricity providers and charge a price that in the end shows in your electric bills.

The Public Utility Commission PUCT approves the TDU charges, to see the charges approved look here.

Keep in mind that electricity companies only have to show their energy charge. Which means that they can show a detailed list of other charges or simply combine them. Either way, you pay for it.

TDU charges are paid by kWh delivered to your home. This means that when you waste electricity, you pay twice. One charge is for energy, and the second for the delivery.

What Causes High Electricity Bills?

The average electric bill in Texas cost $132.40 per month in 2021, according to data from the U.S. Energy Information Administration.

This is lower than the national average. However, many Texans are seeing the price of their electric bill going up.

One of the main drivers behind this increase is higher demand.

This past summer saw peak demand at an all-time high in August when the Texas energy grid combined to produce over 80,000 megawatt hours of electricity for the first time.

As with previous demand peaks, this one was primarily caused by the extreme summer heat that necessitates the use of air conditioning for the 26 million customers on the ERCOT grid.

The trending rise in energy demand is one that ERCOT predicts to continue into the foreseeable future.

Factors Causing High Electric Bill Prices

Weather is the main factor that will increase your electricity rates since your air conditioner can account for more than 100 kWh per day for large central units.

However, some other major factors will increase the cost of your electric bills, for example:

●      Consumption: 

Naturally, the more energy you use the higher your bill is in most cases. However, depending on your type of electricity plan, when you use energy can also make your bills go up or down.

●      Weather:

Unfortunately, extreme weather events like heat waves and cold snaps are becoming more and more common. This means that it’s also more difficult to accurately predict demand. In general, the farther away from normal the weather gets, the more costly it will become to keep your home comfortable.

●      Occupancy: 

Having more people in your home will use more energy. There will be more lights on, more need for heating and cooling, and more chances for energy inefficiencies to happen like leaving electronic devices on or leaving doors and windows cracked.

●      Energy Inefficiencies: 

See the section below on poor energy efficiency might be affecting your electric bills in Texas.

Other Factors

●      Regulation:

If you’re in one of ERCOT’s competitive zones, the price of your electric bill in Texas is generally unaffected by regulation.

However, if you notice a sudden spike in cost check with your electric provider to see if any regulations have changed.

●      Cost of Fuel for Generators:

The most common variable costs that generators deal with. The cost of fuel for nuclear generators, coal, and natural gas is impacted by the energy markets which can be volatile. Things like inflation can affect fuel cost and increase electricity bills.

●      Natural Disasters:

Hurricanes, blizzards, and extreme heat waves can cause major structural damage to the power grid. This means downtime, repair, and probable loss of service in certain circumstances. In any case, a natural disaster near you will certainly increase your electric bill in Texas.

Energy Inefficiency can Increase your Electricity Bills

In short, the cheapest and cleanest electricity is what you don’t waste. When your home wastes electricity due to poor energy efficiency it increases your electricity bills.

If you want to know how efficient your home is, you can ask for utility assistance conducting a physical audit of your home. Most utility companies including CenterPoint offer this service.

You can also pay an energy consultant to come to your home and do it. Or you can take advantage of EnerWisely’s online Energy Efficiency Audit. It will tell you how much energy your home is wasting and how to improve.

In the meantime, here are four common energy inefficiencies that may be causing your electric bill to be higher than it needs to be.

1. Leaks and Waste

This is a difficult problem to solve since you probably aren’t aware of the energy leaks and waste that’s happening on your property. If you were, they probably wouldn’t be happening in the first place.

If you feel your electric bills are too high given the expected efficiency of your appliances and home, it may be time to perform an energy audit.

EnerWisely can help with this. We offer the only free energy audit online designed to rate your property’s energy efficiency, compare it to similar homes and businesses in the area, and suggest ways to increase it.

EnerWisely will take a look at:

●      Your consumption patterns.

●      The environmental impacts of your energy use.

●      Energy vampires that you can address to improve efficiency and lower your electric bill.

2. Inefficient Appliances

A standard appliance should give you a good 10-15 years of service before it’s time to replace them.

As a rule, the older an appliance is, the more likely it is to be energy inefficient, especially when compared to modern appliances which place a premium on efficiency.

The best thing you can do with an inefficient appliance is to replace it. Keep in mind that the short-term investment in a new appliance can save you money in the long run.

When searching for energy-efficient appliances, look for the energy star. ENERGY STAR is a government program that aims to “promote energy efficiency.”

3. Inefficient Lighting

Energy-efficient lightbulbs can last longer, use less power, and can cut the energy needed to light your home by up to 25%.

In addition to this, you could save up to $45 per year by replacing your home’s five most common light fixtures with energy star models designed to protect the environment and save you money.

Also, consider the position of the lights in your home. There may be rooms that are using multiple lights that could use one if they were placed in a right position.

The way the appliances are used and when can also make a big difference in terms of your electricity rate and overall electricity bills.

4. Insulation and Maintenance

A poorly insulated home is like a refrigerator with the door open. No matter how much cool air you pump into the box, it’s bound to escape into the outside world. And it will quickly become useless in terms of cooling.

There are simple improvements like checking for air drafts below doors and around windows. Many of those can be fixed with caulking and weather strips.

A few simple insulation upgrades could make a dramatic difference in your electric bill.

An energy assessment can also inform the kinds of insulation you’ll need. Some common areas to check include attics, and exterior walls. Ultimately, your home needs to be insulated from top to bottom to maximize efficiency.

Similarly, a poorly maintained air conditioner or home appliance could performing below its efficiency grade.

How to Estimate Your Electric Bills Price

One of the most important things you can do to keep your energy costs in check is to know how much energy you use.

This estimate can give you a point of reference to know how far from expected energy usage your bill is.

Did you estimate your bill and find that it should be much lower than it really is?

Then you’re likely to identify some inefficiencies or waste with a further energy audit.

To estimate your energy bill, gather the following information:

●      You’ll need the wattage of each of your appliances. These should be available on a silver label somewhere on the appliance.

●      You’ll need an estimate of how long each of these appliances is running per day.

●      Check the rate of electricity according to your REP. This will be measured in kWh.

Wattage is a measure of how much electricity your device uses over time. To turn wattage into kWh, multiply the wattage by the number of hours you expect to use the device per day, then divide by 1000. This will produce a kWh for the device which you can then multiply by the cost of electricity to get a result.

As an example, if your AC unit is consuming 100 watts every hour and you run it for 8 hours a day, you’d start by multiplying 100 x 8 to get 800 watts. Divide this by 1000 to get kilowatt-hours. In this case, your AC would be using .8 kWh per day.

Do this for every appliance, then multiply by the rate your REP is charging for electricity during the times when the appliance is on.

If this all seems like too much work, you can also just use EnerWisely’s free online energy audit tool. It functions as an electric bills calculator, and gives you suggestions on how to reduce your electricity bill.

EnerWisely is the Smart & Easy Way to Reduce Your Electricity Bills in Texas

HERE IS HOW IT WORKS:
1- First of all, signup for FREE to link your consumption history and automate the process. All you need is your address, meter number, and the name of your electricity provider. You will see you energy consumption details instantly.
2- Next, enter the things that matter to you when comparing electricity rates. EnerWisely can evaluate price, renewable, provider rating and compare versus your current plan if you know your rates and cancelation fees.
3- That’s it, Order your perfect plan and start saving.  Your top matches are scored and ranked based on how well they work for you.

In just minutes, EnerWisely compares multiple electricity companies, plans and rates to find the best deal for you based on your consumption. Once you set up your account, the process is automatic.

A much better comparison tool than any other free or paid service in Texas, including ogres, wizards, bots and genies. So know you know, start taking advantage today.

Feel free to visit your dashboard as often as you like to make sure that you’re always getting the best deals. Also take advantage of all the perks that EnerWisely offers including your home energy efficiency audit.

EnerWisely works for customers of all light companies in Texas competitive markets and it can help lower your electric bills.

But hurry, this free offer is coming to an end soon.

EnerWisely Can Help Lower Your Electric Bill

We are dedicated to empowering Texans with the tools and knowledge to make the most of the money. As the one stop solution in Texas, you find all that you need to lower your electricity bills under one roof.

EnerWisely works for customers of all electricity providers in Texas competitive markets. Some of our solutions and perks include:

• detailed home energy scores to know and improve your home’s efficiency
• rewards program with prizes to win free electricity
• carbon footprint calculator to help you be more environmentally friendly
• smart tool to compare power rates find the cheapest based on your consumption

From electricity reminders, to weekly home energy reports, and personalized dashboards, we can help you lower your electric bills.

Click here to shop for electricity plans and start saving money today.

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