Posted in Blog  
  on Jun 24, 2015

Free Nights and Weekends? Why "Great" Electric Deals May Not Add Up

Some electric providers offer what sound like really great incentives, but their rates are actually more expensive in the long run. When you choose an electric power supplier, a small error in judgment could cost hundreds or even thousands of dollars. Learn how to calculate whether offered rates actually add up by keeping in mind these key factors.


Don’t Be Fooled by Variable Rates
Comparing variable rates can get you in trouble. They always start low but then go up and never seem to come back down. Variable rate plans can be dangerous because providers can increase the rate at any time without notice. Sometimes fixed-rate plans work best because you know exactly what you pay at the end of your term, but keep in mind that fixed-rate plans in a market with falling electricity prices can seem expensive. You may want to negotiate with your supplier to get a better deal: you’ll be surprised at the power of negotiation when suppliers deal with the threat of losing customers. Know the difference between fixed and variable rates before you take the plunge.


Beware of Special Offers
It’s easy to fall for special offers like free nights, prepaid plans and free weekends advertised by many utility companies in Washington D.C. and the 13 states with deregulated electricity. Many companies advertise low rates with the promise to charge unchanged prices. These ads can be misleading. A few plans may offer low introductory rates that later skyrocket. Others may charge you high termination fees if you decide to get out of the contract.


Check for Over Billing
Many consumers pay their bills without double-checking the charges. Electric suppliers are expected to provide an "electricity facts label" that contains standard information about fees, rates and contract rules. As a rule of thumb, always check your bills to make sure it is similar to the signed contract. You may find inflated rates that you don't actually need to pay for. Compare the cost per kWh with that of a public utility so you know whether you’re being overcharged or not.


Calculating Energy Bills
An electric company measures electricity consumption in kilowatt-hours (kWh). Bills may have multiple kWh charges, including transmission, distribution, generation, renewable energy and energy conservation. Some companies have kWh charges only for generation and distribution, while others have added charges. Find out how much kWh you pay with these steps:

  • Get a copy of your electric bill and add all the kWh charges mentioned along with the tax.
  • Check the kWh charged in summer and winter so you understand seasonal pricing in your area.
  • Compare your electric kWh rate with a public utility to know if a private provider is giving you a good deal.
  • Check your electric consumption because rates are tiered. For example, you might pay 10¢ per kWh for the first 300 kWh and 15¢ per kWh above that threshold.
  • Keep in mind that the average U.S. national retail price for electricity in residential homes is 12.35¢ per kWh. This should help you benchmark your electricity prices.

How to Choose an Electrical Provider in a Deregulated Market
A deregulated market promotes competition between electricity suppliers, which should lead to lower prices and good deals for customers. Electricity costs depend on where you live, the season, how much you consume and your provider. Before you start shopping, consider several factors that go beyond price.
Do research on reliability by checking online reviews and business ratings. This will give you insight into previous customer experiences.
Check the load management and carbon footprint of each provider. Is the provider supplying clean energy or coal-based energy that’s harmful?
Check for additional fees: sign-up fees, early-exit fees, switching suppliers and spiked prices during winter months are all typical examples.
Lower your energy prices by understanding your bills to effectively forecast, budget and choose between energy service providers.

 


Related

The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More


How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More


The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More


The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More


Unpaid Rent

When you talk about the most common disputes arising between landlords and tenants, nonpayment of rent has to be there in the list. People rent their properties to earn money, and when a tenant... More


Section 8 Landlord Pros and Cons

If you have ever rented a living space and have had to move many times, you’d already know how difficult it is to find decent, affordable and secure living premises. A person has to deal with the same... More


Landlord Inspection Checklist: Rights, Letters, and Reports

Landlords across the state have the prime responsibility to make sure they inspect and up keep their property once they have rented it to the tenants. Inspections can occur monthly or yearly depending... More


Landlord Maintenance Costs and Responsibilities

Everyone knows that a landlord’s job is not easy. These folks have specific duties and responsibilities that they must perform in order to be fair. Being a landlord is not a position but it is, in... More


When to Withhold Tenant Security Deposit

Asking for a security deposit is quite common in property dealings. The reason to ask for a security deposit is to have something that would help a property owner recover some of their financial... More


How to Report Bad Tenants

Bad tenants are the worst-case scenario for any landlord; no one wants them, and if someone has them, they want them out in any way possible. There are times when landlords try as much as they can to... More