I don't regularly think about renewing since I usually sign up for 12 month contracts, but I got burned this past summer ("ha ha" funny given the record temps in Texas) when my last contract expired and I was placed on a month-to-month rate (I went up from 10 to 13 cents/kWh, in the middle of the summer! -yes, poorly timed). My mistake was chasing the absolute lowest rate by signing up for a 6 month contract in December that would expire in June, of course, fully expecting that I would remember to renew on another 6 month contract (ha!).
Lesson learned. Rates are generally better in the late fall and winter months, so best not to leave anything to chance and simply ensure that my contracts would always expire in those seasons going forward.
With that in mind, I started by going to www.powertochoose.org (a site provided by the Public Utilities Commission of Texas), entering my zip code and preferred contract term (12 months) and then reviewing the resulting rate offers. That list of rates shows the retail electricity provider (also know as "rep"), term, cancellation charge and special notes.
In case you haven't shopped for rates before, the information you'll need to review is contained in what is called an "Electricity Facts Label" document. Each rate offer will have one.
Clicking the document link will take you to a standard outline with what's behind that rep's offer.
From there, everything I really need to know is in the first section, conveniently labelled "Electricity Price".
The monthly electricity price contains a few key areas that makes comparing rates between reps fairly simple. One is the "Base Charge", which is really an amount that allows the rep to guarantee that they earn at least that much from the customer.
However, it doesn't mean much unless combined with what is called the "Energy Charge". Unlike the base charge, the energy charge is dependent upon the amount of electricity that is consumed each month.
Lastly, the "Transmission and Distribution Surcharges" (also known as "TDSP", which is Oncor in my example) may be broken down into two parts: A flat rate amount and a rate, similar to the energy charge, that is based on my usage each month.
For me, since I try to conserve power as much as possible, I go for offers that have the lowest energy charge in addition to a zero base charge. If my usage was relatively and consistently high, I'd probably go with a $5 or $10 base charge if it was with a much lower energy charge.
On a side note, notice that average prices in the offer are listed from 500 up to 2000 kWh. You'll need to know your average historical monthly usage pattern in order to give relevance to those numbers. No worries otherwise as you can take your January and August bills (since those are probably worst-case) and, using those consumption amounts, bounce them against the average rates from the offer.
Outside of the base and energy charges, there are a few "gotchas" that are not clearly explained, but I'll cover those in another post.
In the meantime, I'll keep shopping and reveal my rate choice soon.
