Should you switch electricity providers or stay where you are?
Last week’s electric shortage has given some customers a jolt. Some people who were on variable rate wholesale electricity plans now owe thousands of dollars for just one month of power. It has many consumers worried and wondering what to do next.
If you are on a fixed-rate plan, you won’t likely notice a difference in your electric bill at all.
If your electric provider goes out of business, you will be switched to what’s called a “Provider of Last Resort.” If and when that happens, you want to find a new provider and plan as soon as possible because POLR rates are typically much higher than what you would normally be expected to pay.
If you were to switch providers today, Jesson Bradshaw, the CEO of Energy Ogre says rates are not bad.
“The rates are a little bit higher now than they were before,” Bradshaw explained. “So we’re looking at you know, 9.5 to 10.5 cents (per kilowatt).”
He said this week, the electric market in Texas is already looking much better than just a few days ago. On the Power to Choose website Wednesday, there were 107 plans to choose from. Last Wednesday, there were only 27 since electric companies were nervous to take on new customers not knowing how much they would be expected to pay for power.
Spring and fall are typically great seasons to sign up for a new plan. In the summer, rates are generally higher, but there is still a bit of uncertainty right now because of last week’s outages.
“I don’t think a lot of the retailers understand exactly where they are with their customers because some of the metering information hasn’t been correct,” Bradshaw said.
Bradshaw said when CenterPoint loses connectivity with its smart meters, its software estimates how much electricity people used. That happened when 1.4 million customers lost power last week. CenterPoint’s software automatically estimated usage. But, almost half of CenterPoint customers used no electricity for up to four or five days. CenterPoint is now going back and correcting that usage data to send to retail electric providers so they know what to charge customers.
“The good news is, by statute, every one of the retail electric providers has to work with you,” said Bradshaw. “They have to offer you a payment plan or some way to try to spread that out.”
But, beware of working out payment plans with your power provider. Electricity broker Lisa Davies with Energy Procurement Services says that could prevent you from switching providers.
“If your supplier puts you on a deferred plan where you can go ahead and make payments and pay off your balance, they put you on something called a switch hold. And if you’re on a switch hold, you can not switch from your provider,” said Davies.
If your fixed-rate contract is expiring soon, start shopping around to see what kind of rate you can get. If it doesn’t expire until April, set a calendar reminder at least three weeks before to start shopping around.
Bradshaw said you should know your expiration date and the rate you’re currently paying.