Most people look at the bottom line of their bill and either feel relieved or frustrated. How did that monthly bill get so high? Or why is this month’s bill so different from last month’s? Being able to manage your electricity consumption starts with knowing how much you use and then understanding your electricity bill.
We caught up with Alyssa Hargrove, manager of customer care at StarTex Power, to learn more about the ins and outs of the company’s bill and to help demystify some of the less familiar terms on the bill.
Hargrove says most customer calls or emails focus on payment and understanding the electricity bill. “Anything payment related,” she says, ticking off a list of common questions, such as How do I read my electric bill? Did my payment post? Can you take a payment for me?
“Close behind that,” Hargrove says, are concerns about payments that are past due. “How much do I have to pay to make sure my electricity isn’t turned off?” (Short answer: “Typically customers need to pay the full amount of what’s past due,” says Hargrove. “But if they’re having problems and they’re eligible [for help] we can make payment arrangements with them.”)
The next top reason people call, Hargrove says, is because they aren’t sure how to read their electric bill. We talked to her about some of the more confusing terms.
Energy charges: This amount reflects how many kilowatt hours of electricity a customer used in a particular month. The formula is simple: The number of kilowatts used per hour is multiplied by the Energy Charge (or rate) the customer has agreed to pay in the rate plan. (Just like mortgages, plans can be variable or fixed, and, just like mortgages, customers sign up for a particular term (length) contract.) So if you’ve had a month that’s included a lot of heating or cooling, your bill might be higher than the month before based solely on the amount of electricity you used.
The energy charge figure can also be affected, however, by when the meter is read, Hargrove notes. Meter read cycles are anywhere from 22-33 days. Obviously a billing cycle that is only 22 days long will likely result in lower energy charges than a billing cycle that’s 33 days long. You can tell the length of the cycle on the bill.
While StarTex Power employees do not read the meter (the local utility company does), they are happy to discuss meter concerns or questions. Hargrove says they can also help customers work with the utility if they can’t resolve the meter question.
Which brings us to the next set of numbers that can make understanding your electricity bill a little confusing: TDU surcharges.
Transmission and Distribution Utility (“TDU”) surcharges are the costs of getting the power delivered to you. StarTex Power buys the electricity, but has to pay a utility such as Centerpoint, ONCOR, AEP or Texas New Mexico Power to get the energy it has purchased to its customers.
“We’re a retail company. Our main job is to buy the electricity and sell it for a certain price—whatever [the customer’s] rate plan,” Hargrove says. “We then work with the utilities who own the transmission and distribution lines and the meters. We work with the local utility to make sure there’s enough electricity to cover our customers’ needs.”
Transmission and distribution charges are determined by the utilities and are approved and regulated by the Public Utility Commission of Texas. The main point is that these fees are not determined by StarTex Power but are collected by StarTex Power on behalf of the utilities.
In addition to the transmission and distribution surcharges, your bill also includes certain assessments. Specifically, there is a fee for PUC Assessment Reimbursement. This is a fee assessed to recover the statutory fee for administering the Public Utility Regulatory Act. You might also see a charge associated with something called a Gross Receipts Reimbursement. This fee is assessed to recover some of the miscellaneous gross receipts tax imposed on retail electric providers operating in a town or city with a population of more than 1,000.
Minimum usage fee: Not everyone sees this fee. It depends on your plan. However, when it does show up, it can be confusing Hargrove says.
Here’s the basic idea: The plan you sign up for includes an Energy Charge, which can be fixed for a term or variable. As described above, the Energy Charge is then multiplied by the amount of kilowatt hours you have consumed during the meter read.
Some plans also have a minimum usage fee for when consumption is below a certain level. Let’s say you sign up for a plan that’s based on 1,000 kilowatts usage per month. And then let’s say you go away for a month and only have a few lights on periodically and perhaps a little heat. If your usage goes under 1,000 kilowatt hours for that month, you get charged a minimum usage fee. The fee is based on your contracted rate and is an additional fee to whatever kilowatt hours actually were used.
Helping customers avoid this surprise starts at the beginning of the StarTex Power sales process, Hargrove says. “We have plans that don’t have a minimum usage fee. If a customer knows they’re never going to go over 1,000 kilowatts for most of the year, then they can pay a cent more per kilowatt hour but never have a minimum usage fee,” she says. “We go through that in the sales process.” In other words, it might make sense for a low electricity consumer to pay one cent higher per kilowatt hour generally to avoid any concerns about a minimum usage fee.
Customers once called more frequently with questions about their meters. A lot of those calls have been eliminated, however, thanks to smart meters. These digital meters make reading easier and enable the customer to see how much electricity they’re using and when. Smart meters, which are in nearly 98% of households, depending on the utility, also mean the utility can read the meter remotely.
The take-away from all of this is simple: If you’ve got a question about understanding your electricity bill, call or email the company. “One of our mottos is star treatment,” Hargrove says, noting Cogent Reports named StarTex Power one of the top four electricity providers for brand trust in 2015. “Even though we are a national company, we’re looking for that personalized service. We want to tailor our plans and our service to that particular customer. We’re really trying to have that one-on-one relationship with our customers.”
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