How much are Texans overpaying for electricity?
In 2002, Texas deregulated the energy sector to try and create more competition, which would, in turn, lower energy rates. But deregulation did the exact opposite of lowering rates. By 2004, the residential rate for electricity increased by 43%. In 2014, the average cost of electricity for Texans in deregulated cities exceeded the national average.
Why did this happen? Basically, the abundance of choices encouraged providers to find sneakier and sneakier ways to make money. So instead of competition driving prices down, the competition just made prices more complicated and confusing, forcing Texans to pay way too much for electricity.
And how much are Texans overpaying for electricity?
About $44.75 per month – which is $537 per year or $5,370 over 10 years.
But before we get too much into this markup, let’s take a look at how consumers pay for electricity.
Energy bills are broken down between two main things:
- Energy costs: This is the actual electricity from the grid you use
- Delivery costs: The price from your TDU to deliver electricity to your home or business. Delivery costs are the same for all REPs.
Now, all REPs buy energy from the wholesale market. The difference is how they package it up and sell it to you.
At Griddy, we are all about transparency, which is why we only charge $9.99 a month for you to get wholesale electricity prices. Kind of like a special club for savvy energy consumers. And that $9.99? That is the only profit we make. Everything else is passed through to you.
But other REPs will mark up the wholesale price and sell it to – and not just by a little, but an average of 46% more. They make up snazzy names for plans like free night and weekends as an attempt to get you to pay more for the same old electricity. Then they stuff their plans full of deceptive fees.
The fees below are the top 5 fees that the average REP charges, as found in the 2018 Retail Electric Provider Fees in Texas report from Texas Ratepayers’ Organization to Save Energy. From the report, Griddy’s only fee is the $9.99 a month membership. But for those other REPs, they can charge up to $500 in additional fees.
One of the great things about Griddy is that we actually want you to save money. Every other provider makes more money with every additional dollar you spend. Since the only money we make is on your flat monthly membership, we want you to pay less so you're happy with your service and stay with us longer.