Despite the lowest electric rates in Texas in more than five years, many Texans are still overpaying for electricity because they haven't checked their energy rate, and compared it with competing energy suppliers.
If you haven't checked your energy rate since 2008, when electric rates reached historic highs, you're probably paying too much for electricity. In the summer of 2008, spiking natural gas prices and record usage pushed Texas electric rates above 20¢ per kilowatt-hour. To avoid further price spikes, may customers locked-in rates of 17¢, 18¢, or even higher, to give themselves some price security until the markets calmed down, and prices started dropping.
But many Texans haven't compared their energy rate as prices have fallen over the past two years. As a result, even though most Texans can find a low, fixed rate in the 9¢ per kilowatt-hour range, millions of Texans are paying inflated rates of 15¢ per kilowatt-hour, if not more.
Another reason many Texans are overpaying for electricity is that they've never checked their energy rate since competition started in 2002. They've always stayed with the successor to their old monopoly utility: the so-called "incumbent" provider like TXU in the Dallas area, or Reliant Energy in the Houston area. For these customers who have never shopped, the incumbent providers typically charge higher rates with more built-in profit -- typically at least 5¢ per kilowatt-hour above the lowest rate they offer to new customers -- because they don't expect these non-shoppers to compare their rates against competitors. These higher incumbent prices can raise bills by over $50 per month, or $600 per year.
That's why you need to check your energy rate and shop for a lower rate. If you're paying more than 12¢ per kilowatt-hour, you are simply paying too much money for electricity for no reason. Even premium products like renewable energy or plans that guarantee price security for an extended 24 months are below 12¢ for most parts of Texas. You can still enjoy the same reliable service from an energy provider when choosing a lower energy rate, all while saving hundreds of dollars per year.