Electricity Facts Label (EFL)

What are Market Securitization Charges?

Market securitization charges are a new line item on Texas electricity bills. They’re a direct outcome of Winter Storm Uri, paying for some of the extraordinary costs of that storm.

The Texas legislature passed House Bill (HB) 4492 in 2021 in response to the storm’s financial impact on the ERCOT power region. The legislation allows Texas REPs to add the charge to their bills for the next 30 years

You can’t avoid paying these fees, which are from a regulatory change. But you might as well understand them, since you’ll be paying them for the next 3 decades.

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Shopping For Your Best Electricity Deal? Know Your Usage

What’s electricity usage got to do with it?

Being the electricity geeks that we are, we talk way too much with our customers, friends, and family about the price they’re paying for electricity. For whatever reason, people happen to like to swap stories about their electricity provider and rate.

The conversation usually starts with “Hey, guess what? I just got a <insert ridiculously low rate>,” and usually (unfortunately) ends with a gotcha and a comment about teaser rates, fine print, and usage.

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Tiered Rate & Bill Credit Electricity Plans – How to Sniff Out a Texas Teaser Rate

Tiered rate and bill credit plans are all the rage in Texas. Most Retail Electricity Providers (REPs) offer at least a few of these plans. These are the electricity rates that look amazingly low at the advertised rate of 1000 or 2000 kWh. But dig into the details and you may find your usage level would pay a higher price per kilowatt hour than you expected. We call these plans a Texas teaser rate.

Key Takeaways / TL:DR

  • A Texas Teaser Rate is an electricity rate that looks good at a specific advertised level of usage, but has a higher effective rate per kWh if your usage varies.
  • Bill credit plans and tiered rate electricity plans can be considered teaser rates, since the advertised rate is low. It’s important to read the Electricity Facts Label or shop by your average usage to see what you will actually pay.
  • The best way to avoid a teaser rate is to buy a basic fixed rate electricity plan. You’ll pay the same rate per kWh for your energy. And the average rate per kWh will only vary because of monthly fixed fees from the utility or retail electricity provider.

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Why Does Texas Have Three Electricity Rates?

If you are shopping for electricity based on the advertised rate or one of the three electricity rates shown on the Electricity Facts Label, stop. You might pick the electricity company advertising the lowest rate based on 500 kWh, 1000 kWh or 2000 kWh. But you could soon discover it’s not as straight forward as you’d hoped. Because unless you read the find print you may choose the wrong plan.  

Before you blindly click on the plan with the lowest advertised rate, read this article.

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