Posted 11:07 pm Monday, August 09, 2010
High Heat Doesn’t Have To Mean High Bills
By CHAD THOMAS
Business Editor
If the thermometer hasn’t already convinced you it’s oppressively hot outside, your next electric bill might do the trick.
Business Editor
If the thermometer hasn’t already convinced you it’s oppressively hot outside, your next electric bill might do the trick.
A string of 100-plus-degree days this week has kept air conditioners running almost nonstop to beat the intense summer heat, and a hefty utility charge likely awaits many East Texans.
But a massive bill isn’t inevitable. Energy experts say there are steps that can be taken to cut costs — and the first might entail finding a new electric company after evaluating your monthly charges.
“I think a lot of people just look at the total on their bill, but many people don’t know the rate they’re paying per kilowatt hour,” said Terry Hadley, a representative of the Texas Public Utility Commission.
“When a customer is considering a different provider, he should have his most recent electric bill in hand and be familiar with it,” he said. “The most important fact is to see the rate.”
In Texas, consumers have the right to shop from retail energy providers that each offer various service plans. Regardless of whether it’s short- or long-term, the plan is based on a per-kilowatt-hour cost, which is listed on the service contract and on every billing statement.
Most plans today fall between 8 and 14 cents per kilowatt hour, and depending on a person’s or family’s usage habits, a 1-cent reduction for every kilowatt hour can mean hundreds of dollars in savings each year.
Customers hoping to pare their electricity payments can start by consulting the Texas Public Utility Commission. The organization lists the available offers from all energy providers within the service area. A little head-to-head comparison of price per kilowatt hour will give customers a clearer idea of the provider best suited for them.
The list can be found on the commission’s website at www.pow ertochoose.org or can be requested by mail by calling 1-866-797-4839.
Energy-oversight groups caution against jumping at the lowest rate without closer inspection. Some energy providers offer what appears to be an inexpensive “introductory” plan for first-time customers, touting an alluringly low monthly rate that is several cents cheaper per kilowatt hour than the provider’s standard plan.
What’s not often disclosed in large print is that the introductory plan — and its exceptional rate — is just that: introductory. In most cases, the plan’s rate remains low only during the first billing cycle (generally the first 18 to 30 days) before it increases to the provider’s default plan and a higher usage charge.
For that and other reasons, Hadley said, a higher rate can come with a few perks. Some companies will give higher-rate-paying customers gifts and other incentives, and in some cases, a higher charge can be connected to better service.
But much like a deceptively low rate, less-than-stable providers may attempt to lure customers by offering freebies such as movie tickets and gift cards. Hadley advises leery customers to make one simple move that can reveal much about a lesser-known company.
“Calling a toll-free number should tell you a lot about their knowledge and customer service or whether you’re being fast-talked into something,” he said.
The utility commission’s website also contains a link to customer complaint data. The 38 providers in Texas are ranked according to the frequency of complaints, which may be another important criterion for prospective clients.
FIXED OR FLEXIBLE
The energy market in many ways fluctuates similarly to the stock market, and the same basic rules apply to both: Buy low and sell high.
If and when a customer can capture a low rate when energy prices are down — often thanks to slumping natural gas prices — it can be advantageous to lock into a long-term, fixed-rate plan.
Although it’s uncommon, energy costs can rise rapidly for a myriad of reasons. A natural disaster or sudden shortage of a fuel source can send rates surging, and a fixed-rate plan acts as a veritable insurance policy against sudden rate hikes, Hadley said.
“It does not frequently happen,” he said, “but we have one example from the summer of 2008 when natural gas prices just soared through the roof, so there were substantial increases by the service providers.
“Then toward the end of that year and into 2009, prices dropped substantially. It just depended on what side of the fence you were on whether that really affected you.”
While it guarantees some price security, a fixed-rate plan sometimes can be slightly higher per kilowatt hour than other options. And it’s always possible that fuel prices may continue to fall after locking into a 12- or 24-month plan, leaving the contract-bound consumer frustrated.
For the day-traders among the electricity consumer world, or for frequent movers, a flexible or month-to-month plan may be a better bet. It doesn’t have the safeguards against price hikes, but it does allow customers to reap the savings should fuel prices plummet.
Breaking a fixed-rate contract also may come with a one-time fee up to several hundred dollars, a fact to keep in mind when considering switching service providers.
SUMMER SAVINGS
In warmer states, cooling is by far the most costly portion of a utility bill, on average accounting for 56 percent of a home’s energy use, according to the U.S. Department of Energy.
Air conditioners typically can’t keep a home more than 25 degrees cooler than the outdoor temperature. So when daytime highs reach triple digits, an air conditioner set on 70 degrees may run nonstop for hours, unsuccessfully chugging for the target temperature while racking up massive energy charges.
Moreover, for every degree lower you set an air conditioner, energy usage goes up by 5 to 8 percent. Consequently, the state’s utility commission recommends keeping thermostats set no lower than 78 degrees during summer days to keep bills from soaring.
Other sensible practices can help cut monthly cooling costs. Using fans to create a wind chill effect will allow you to turn up the thermostat by up to 4 degrees while still maintaining the same comfort level.
Ceiling fans cost only about a penny per hour to operate, according to Reliant Energy and several major fan manufacturers. But as the widespread adage goes: Fans cool people, not air. The only time anyone will see energy savings from fans is when they’re sitting under or in front of one and the air conditioning is set a few degrees above normal.
Changing an air filter frequently — at least once every three months, or more often during the summer — also can prevent dust buildup, allowing an air conditioning system to perform more efficiently.
Sealing air conditioning ducts, meanwhile, can save 20 percent or more on a monthly utility bill, particularly ducts that run through the attic, basement or garage.
And simply keeping blinds and drapes closed can help reduce sun-related heating, otherwise known as “solar gain.” Specially made thermal curtains can block out more light than regular drapes and even can obstruct warm air from permeating the household if it seeps through gaps in window frames.
For more information about reducing electricity costs, visit www.energysavers.gov.
“When a customer is considering a different provider, he should have his most recent electric bill in hand and be familiar with it,” he said. “The most important fact is to see the rate.”
In Texas, consumers have the right to shop from retail energy providers that each offer various service plans. Regardless of whether it’s short- or long-term, the plan is based on a per-kilowatt-hour cost, which is listed on the service contract and on every billing statement.
Most plans today fall between 8 and 14 cents per kilowatt hour, and depending on a person’s or family’s usage habits, a 1-cent reduction for every kilowatt hour can mean hundreds of dollars in savings each year.
Customers hoping to pare their electricity payments can start by consulting the Texas Public Utility Commission. The organization lists the available offers from all energy providers within the service area. A little head-to-head comparison of price per kilowatt hour will give customers a clearer idea of the provider best suited for them.
The list can be found on the commission’s website at www.pow ertochoose.org or can be requested by mail by calling 1-866-797-4839.
Energy-oversight groups caution against jumping at the lowest rate without closer inspection. Some energy providers offer what appears to be an inexpensive “introductory” plan for first-time customers, touting an alluringly low monthly rate that is several cents cheaper per kilowatt hour than the provider’s standard plan.
What’s not often disclosed in large print is that the introductory plan — and its exceptional rate — is just that: introductory. In most cases, the plan’s rate remains low only during the first billing cycle (generally the first 18 to 30 days) before it increases to the provider’s default plan and a higher usage charge.
For that and other reasons, Hadley said, a higher rate can come with a few perks. Some companies will give higher-rate-paying customers gifts and other incentives, and in some cases, a higher charge can be connected to better service.
But much like a deceptively low rate, less-than-stable providers may attempt to lure customers by offering freebies such as movie tickets and gift cards. Hadley advises leery customers to make one simple move that can reveal much about a lesser-known company.
“Calling a toll-free number should tell you a lot about their knowledge and customer service or whether you’re being fast-talked into something,” he said.
The utility commission’s website also contains a link to customer complaint data. The 38 providers in Texas are ranked according to the frequency of complaints, which may be another important criterion for prospective clients.
FIXED OR FLEXIBLE
The energy market in many ways fluctuates similarly to the stock market, and the same basic rules apply to both: Buy low and sell high.
If and when a customer can capture a low rate when energy prices are down — often thanks to slumping natural gas prices — it can be advantageous to lock into a long-term, fixed-rate plan.
Although it’s uncommon, energy costs can rise rapidly for a myriad of reasons. A natural disaster or sudden shortage of a fuel source can send rates surging, and a fixed-rate plan acts as a veritable insurance policy against sudden rate hikes, Hadley said.
“It does not frequently happen,” he said, “but we have one example from the summer of 2008 when natural gas prices just soared through the roof, so there were substantial increases by the service providers.
“Then toward the end of that year and into 2009, prices dropped substantially. It just depended on what side of the fence you were on whether that really affected you.”
While it guarantees some price security, a fixed-rate plan sometimes can be slightly higher per kilowatt hour than other options. And it’s always possible that fuel prices may continue to fall after locking into a 12- or 24-month plan, leaving the contract-bound consumer frustrated.
For the day-traders among the electricity consumer world, or for frequent movers, a flexible or month-to-month plan may be a better bet. It doesn’t have the safeguards against price hikes, but it does allow customers to reap the savings should fuel prices plummet.
Breaking a fixed-rate contract also may come with a one-time fee up to several hundred dollars, a fact to keep in mind when considering switching service providers.
SUMMER SAVINGS
In warmer states, cooling is by far the most costly portion of a utility bill, on average accounting for 56 percent of a home’s energy use, according to the U.S. Department of Energy.
Air conditioners typically can’t keep a home more than 25 degrees cooler than the outdoor temperature. So when daytime highs reach triple digits, an air conditioner set on 70 degrees may run nonstop for hours, unsuccessfully chugging for the target temperature while racking up massive energy charges.
Moreover, for every degree lower you set an air conditioner, energy usage goes up by 5 to 8 percent. Consequently, the state’s utility commission recommends keeping thermostats set no lower than 78 degrees during summer days to keep bills from soaring.
Other sensible practices can help cut monthly cooling costs. Using fans to create a wind chill effect will allow you to turn up the thermostat by up to 4 degrees while still maintaining the same comfort level.
Ceiling fans cost only about a penny per hour to operate, according to Reliant Energy and several major fan manufacturers. But as the widespread adage goes: Fans cool people, not air. The only time anyone will see energy savings from fans is when they’re sitting under or in front of one and the air conditioning is set a few degrees above normal.
Changing an air filter frequently — at least once every three months, or more often during the summer — also can prevent dust buildup, allowing an air conditioning system to perform more efficiently.
Sealing air conditioning ducts, meanwhile, can save 20 percent or more on a monthly utility bill, particularly ducts that run through the attic, basement or garage.
And simply keeping blinds and drapes closed can help reduce sun-related heating, otherwise known as “solar gain.” Specially made thermal curtains can block out more light than regular drapes and even can obstruct warm air from permeating the household if it seeps through gaps in window frames.
For more information about reducing electricity costs, visit www.energysavers.gov.
