At the end of the day, you create your electricity bills with your choices. Your bill is a direct reflection of how you consume energy and how much electricity you use. It is also a function of your electricity cost, transmission and distribution costs, and taxes. That function can look different depending on the plan you choose and its rate structure.
Ultimately, your bill will not only depend on your energy usage but also your plan selection. As a result, you want to ensure that you pick a plan that best fits your lifestyle, preferences, and energy goals. You work hard for your money, so instead of wasting it, you want to save as much as possible. EnerWisely is the only service that calculates matching scores to find the electricity plan with the lowest cost electricity plan based on real usage. EnerWisely is also the only service that maximizes your savings finding and fixing energy leaks, improving efficiency, and reducing environmental impact. Best of all, EnerWisely is free of charge for Texas households in deregulated electricity markets.
Multiple factors affect the charges for the electricity that you use.
The Retail Electric Providers buy wholesale electricity, sets the price, and the rate structure of the plan offered to customers. REP’s sells that electricity directly to retail customers in deregulated areas of Texas. When you select your REP, that provider typically buys the electric power they sell from the generation companies.
While some of the larger providers own their power generation plants, most buy from generation companies. REP’s are then charge for the use of the transmission and distribution infrastructure owned by the local Electrical Utility Companies to deliver and meter the electricity sold to consumers. Consequently, the REP’s transfers that charge over to you. Depending on the type of rate you select, the transmissions and distributions charges might be itemized or bundled into the overall electricity cost. One way or another, consumers’ energy cost always includes the value of the electricity itself and the cost of using the transmission and distribution infrastructure.
Another factor to consider is the type of rate structure you’re selecting. In a deregulated market, there are several types of rates and many types of plans to choose from, for example, fixed, variable, indexed, and even wholesale. So you’ll be charged according to the kind of rate or plan that you choose.
In Texas, the sales tax on retail sales is 6.25%. Besides, based on the district, county, city, etc., other types of sales tax can apply. Some businesses qualify for a sales tax exemption on their utility bills. Examples include some manufacturing companies and eligible residential businesses, including nursing homes, also apartments, and condominium buildings with a master meter.
Ultimately, the charges in your electricity bills will depend heavily on your energy use. Electricity consumption is the amount of electricity used over a specific period. Kilowatt-hours (kWh) is the typical unit of electricity consumption. The more power you consume within a given period, the higher your electricity bill tends to be. That’s because usually, use drives the electricity cost in your electricity plan and also drives the transmission and distribution charges previously mentioned.