Texas Electricity: Minimum Usage Charges
August 2, 2011
Earlier this week, I got an email from a Texas Electricity Ratings reader, suggesting I write an article about Minimum Usage charges. We’ve discussed Minimum Usage charges in the past here, but to clear things up, in short, they’re additional charges that are tacked onto a person’s bill if they use less than a certain amount of electricity per month.
The tricky part is that the charges and the thresholds for the charges are different for every REP (Retail Electricity Provider). Which is what the reader asked me about. I thought it was a great idea, and I should have thought of it myself a long time ago. So I ran through most of the major providers operating in Texas and researched to put together a list of the minimal usage charges for each provider, as best as I could find. So below is a guide to the minimal usage charges for Texas electricity.
Ambit Energy: $9.99 for less than 1000 kWh per month
Amigo Energy: Depending on the plan it is $9.95 of $6.95 for less than 1000 kWh per month
Bounce Energy: $4.95 for less than 1000 kWh per month for almost all of their plans, except intro plans are $6.96 per month for less than 1000 kWh.
Champion Energy: $4.95 for less than 500 kWh per month
Cirro Energy: $5.25 for less than 1000 kWh per month
Direct Energy: I couldn’t find a Monthly Fee in their Terms of Service or EFLs
Dynowatt: $6.95 for less than 1000 kWh per month
First Choice Power: $5 for less than 650 kWh per month, plus a $4.95 base charge
GEXA Energy: Seems to simply use a sliding rate per plan for different usage w/o a minimum charge
Green Mountain Energy: Didn’t seem to see any minimum usage charge in the EFL or Terms of Service
Mega Energy: $12.96 for less than 1000 kWh per month
MX Energy: Seems to simply use a sliding rate per plan for different usage w/o minimum charge
Reliant Energy: $9.95 for less than 800 kWh per month
Southwest Power & Light: I didn’t see minimum usage but they had a $7.95 monthly meter fee.
Spark Energy: $8.99 for less than 1000 kWh per month
StarTex Power: $4.99 for less than 500 kWh per month
Tara Energy: $6.95 for less than 500 kWh per month
Texas Power: $10.00 for less than 1000 kWh per month
TXU Energy: TXU uses a base $4.95 charge and sliding rates for less or greater than 1000 kWh, per plan.
Also, I’d like to point out a few other things about the list above. First off, just because I didn’t find a charge doesn’t mean there isn’t one…I just could have missed it looking through the documents. Additionally, all the EFLs I looked at were from plans in the Centerpoint service area. I looked at at least 2-3 plans for each provider to get an idea of consistent charges listed…I did NOT pour through every EFL from every single provider. This is simply to give people and idea of what to expect, and hopefully be helpful. Also, it’s important to note that for the guys that don’t have any minimal usage charge, chances are high they simply tacked it onto their sliding rate scale. But if you find a great price on a guy with no listed charges, then absolutely go for it.
One last note, Stream Energy’s EFL was…weird. Despite advertising their tiered pricing for rates on a 500, 1000, and 2000 kWh scale like everyone else in the market, the fine print of the EFL says their actual tiers are:
The Price is a tiered
pricing structure, based on the following tiers: i) up to 699 kWh depicted in the EFL as Average Monthly Usage of 500 kWh, ii) 700 to 1,499 kWh depicted in the EFL as Average Monthly Usage of 1,000 kWh, and iii) 1,500 to 2,499 kWh depicted in the EFL as Average Monthly Usage of 2,000 kW
So just keep in mind that you have to use a bit more electricity to get to their cheaper electricity rates.
Any questions?
Texas Electricity Ratings: The Blog 
August 22, 2011 at 10:29 pm
I am a winter Texan so I am only there for three months Jan/Feb/Mar. Seems to me that with the latest push to conserve electricity, that the companies should make it more attractive to not use any at all. In my case I have Cirro Energy which bought out Simple Energy. With Simple I paid nothing for the months with no usage. No with Cirro it is $6.95+taxes so my monthly bill for no usuage is $17.19….
Unfortunately when I did similar to you and examined each companies documents I missed the fact I could have gone with Ercot and paid $3.15/mth for no usage with the plan being 10c/kwh as I am paying with Cirro.
Live and learn…soon as my contract is up, but not until next July..I will be switching. I would encourage anyone changing companies to contact the provider and find out exactly what they will be paying for certain amounts of usage or not.
August 23, 2011 at 1:55 pm
Jim,
Education is the biggest thing that is lacking in the deregulated market. Lots of people just don’t want to take the time to figure out how it looks, and to understand what to look for in the fine print. I applaud you for doing your due diligence.
I do have a question, however. You said you could have gone w/ ERCOT? ERCOT is the governing (or one of) body of Texas Electricity. They don’t offer any kind of electricity plans – To My Knowledge at least. Are you sure it was them you gong have gone with for $3.15 a month? If so, I’d be curious to hear more details about that.
August 31, 2011 at 9:32 pm
Sorry…meant to say Epcot Energy…I think there is one other as well where someone is paying $3.15, I think it is the one that is like a co-op.
Jim
September 25, 2011 at 2:54 pm
Jim,
I am in the same boat as you. I use very little electricity and Simple Power was the greatest because our bills were a consistent rate each month, regardless of the power consumed. Simple Power was the only power company that I loved since it was simple, straight-foward pricing. Now with Cirro, we all have to play the game again, and it sucks (plus, Simple used to let me pay with an American Express, now Cirro only allows Visa or MasterCard…*angry face*). Let the search resume :(. Big thanks to the writer of this blog for compiling this list.
August 25, 2011 at 3:29 am
Hi,
I just found this site and was hoping for assistance. I am in sticker shock…I had less usage this month on electricity, and yet my bill was over double the amount of the maximum we have ever had..it went for 0.116 for July bill to 0.244 pr kwh…I am wondering if they can more than double the rate in a month? Is there any regulations regarding monthly rate jumps? Suggestions/guidelines/ideas???
ThankYou..
August 25, 2011 at 1:48 pm
Lori,
First I’d need some details as to what kind of plan you have. Obviously, it’s not a fixed rate plan. So it’s a variable or indexed plan. No, there is no rules or caps about rate hikes for variable plans. They are at the sole discretion of the electricity company, although they all keep pace w/ the price of of electricity on the grid. As for indexed plans, they’re tired directly to the grid prices for electricity with a mathematical formula.
The thing is, in either case for you, your bill is almost certainly an anomaly of the record breaking heat the past month in Texas. If you have an indexed plan, you’re paying a percentage on top of what the REP’s pay to buy electricity, and this past month the spot market has had energy spikes that have made electricity 60 times it’s normal cost. If you’re on a variable plan, your REP almost certainly raised their rates to cover the cost of having to buy your electricity on the spot market. I actually wrote an article explaining what this market is doing to REPs and what’s happening to cause rates like this recently. You can read it here:
https://texaselectricityratings.wordpress.com/2011/08/09/texas-electricity-crisis-explaining-the-market-dangers/
But in short, what has happened to you isn’t an instance of price gouging or anything nefarious. The market is just extremely tough right now. Customers that aren’t on fixed rate plans are at risk for getting bills like yours. There was actually an article/report that touched on this issue on ABC earlier this week. That link is here:
http://abclocal.go.com/ktrk/story?section=news/consumer&id=8322928
Sorry. But I hope this helps explains some things for you and give you some clarity on why this is happening. Personally, I always try to stay on a fixed rate plan, preferable that I sign up for in December or January, when the rates are the lowest in Texas.
August 25, 2011 at 6:46 pm
[…] Texas Electricity Ratings Blog found more than a dozen power companies with similar policies, with penalties as high as $12.96 for using […]
October 5, 2011 at 4:30 am
Great blog. I have a question with regards the minimum usage charges hopefully you can answer. Actually, I just realized my first point of confusion is whether minimum usage charge is the same as base charge. E.g. I’m looking at Pennywise EFL and it states the following:
Base Charge: $9.95 per billing cycle < 1000 kWh
Does that mean that if my usage for the month 999 kWh I would pay almost $10 more than if the usage was 1000 kWh?
For a minimum usage charge I would never expect that be the case, but for base charge that's not clear to me. Thanks in advance.
October 5, 2011 at 2:06 pm
Jeronimo,
I pulled up an Electricity Facts Label from Pennywise. In this instance, yes, Base Charge is the same as Minimum Usage Charge. In regards to your second question, yes, if you use 999 kWh for a month, then you’re going to drop an additional $10 for not going over 1000 kWh. It isn’t a sliding scale. It’s also the same thing for a minimum usage charge with other REP’s.
It’s funny you mention Pennywise Power. I’m writing an article about them that I plan to post soon, talking about who they are and why they might exist in this market.
October 9, 2011 at 6:04 pm
Thanks a lot for the reply. I understand why it is easier for the REPs not to have a “sliding scale”, but that’s just not a fair system. That’s a bit different for a minimum usage charge, where you don’t have these “consumption zones of unfairness”. This is going to get my provider comparison more interesting. 8 months of the year I’m in the 500 kWh range, and 4 months a bit over 1000 kWh.
January 1, 2012 at 7:13 pm
Great information. I am in Grayson-Collin Coop, so we have no choice. We also have no incentives for conservation or solar installations. I have to pay $18 a month as a base charge plus about $0.105/kWh (plus sales tax of 2% and a franchise fee of 4%). I don’t use much electricity so my effective rate when including the base and fees is about $0.14/kWh.
February 17, 2012 at 8:11 pm
[…] this helps, OP: Texas Electricity: Minimum Usage Charges I just renewed with TXU. It's not the cheapest option but other companies in the area would […]
February 21, 2012 at 1:06 am
Any electric companies out there at present charging no minimum (base) fee? It is a shame that users who conserve energy well pay the brunt with these minimum charges.
February 21, 2012 at 5:51 pm
Jack,
Here’s an article I wrote awhile back about the REPs and existing minimum usage fees. It’s a bit dated, but it was the best I could dig up at the time:
Also, and I really want to stress this, keep in mind that the minimum charge doesn’t exist on an island. You could find a plan without a minimum charge, but the rates might be higher to the point of still being more expensive than a plan with a minimum charge where you conserve beneath the threshold.