Search For Energy Blog Hate Minimum Usage Fees?

Texas electricity customers charged for using too-little electricity.This is nuts, right?"Shouldn't we be rewarded for using less energy considering our budget and the environment?" - Josie's Eco NestSearch For Energy has long been open and transparent about minimum usage fees. We know that these fees can be used as a gimmick to charge more than advertised on websites like Power to Choose.How it works: The default electricity usage on the website Power to Choose is 1,000 kWh. Suppliers make plans that appear very cheap at the 1,000 kWh usage rate in order rank highest on that site (in order to appear the cheapest). Then the supplier will charge either fees or give credits to those using more or less than 1,000 kWh of electricity. Under this type of plan, if you don't use exactly a certain amount of electricity, you can be charged a higher rate. This is how many electricity suppliers not only recover their costs, but make the biggest profits."It's kind of like they're gaming the system," said Jessica Seff, vice president at Search for Energy. "The lowest price may not be the cheapest plan."Some have proposed legislation that would stop electricity providers from charging these fees. Penalizing customers with low energy consumption could undermine Texas energy conservation goals and could hurt the state's ability to comply with the Environmental Protection Agency's Clean Power Plan. Many also worry that fees disproportionately affect low-income and elderly customers living in small houses or apartments.Some electricity companies argue that minimum-use fees are fundamental to the economics of some power plans. Why would they say this?Because it's true. Suppliers may advertise rates that would result in a loss for them (the cheap rate you see on Power to Choose or get from a telemarketing representative over the phone) but then your supplier can ultimately charge you more when you use either too much or too little electricity.The fees don't violate rules set by the state's Public Utility Commission. And the Association of Electric Companies of Texas and other industry lobby groups are fighting against the legislation."There are products in the market that don't have this type of provision in it." - Stephen Davis, Alliance for Retail MarketsAt Search For Energy, we are proud to offer these products on our site. Tri-Eagle Energy is one of our providers that offers great plans with no gimmicks. Check out these great plans here!Shop on, Texas!www.SearchForEnergy.comEnergy Choice Made SimpleAdditional ResourcesTo learn more about the legislation and its challenges, check out the recent article from Fuel Fix here.Another great article on this issue was published by Ryan Holeywell at the Houston Chronicle and can be found here.The Houston Chronicle quotes Search For Energy here.Check out Search For Energy's white paper on the 5 major problems with Power to Choose here.