Tag Archives: broker

I Want a Pay-as-You-Go Electricity Plan and it’s Not What You Think.

I’m not broke. I have pretty good credit these days and I can afford to pay once a month for power. I have a social security number, a co-signer if I needed one (thanks, mom!) and access to all kinds of post-paid electricity products. So why the heck do I want to try a “pre-paid” or Pay as You Go plan for my very own home in C-Town, USA?

The story starts with two Payless Power employees coming into the office this morning to chat over coffee about why Pay as You Go is a great addition to our site. We already wanted it. My (albeit simpler) thinking was that there is a whole world out there of folks with no credit and that a no-deposit, cash option, pre-pay, or pay-as-you-go electricity plan would be a good option for those folks… but now I want it for my family, and its not JUST because you get a cool text each day to tell you how much power you use or because you can call customer service for free and talk to a real person. It might actually be great for our planet. (Plus you get a cool text each day and get to talk to a real person for free.)

Phillip Armenta, Director of Sales at Payless Power mentioned explained the process to me. He explained that it isn’t really pre-paid anymore, “Literally, it is paying as you go one day to the next based on household needs and customer awareness.” He went on to explain that his customers get notified of their consumption via text, which means that, “with real time readings, I could make changes immediately that I can see within a day or two.” Therefore, pay-as-You-Go users are engaged and cognizant of their usage and so they use less power over all. It’s like they put a little pink post-it on your phone every morning.

Little pink post-its

 

Phillip says their pay-as-you-go plans offer “real time readings for real time savings.’” Of course!

Many of us want that magic pill right? If I am going to lose weight, I do not want to eat less food or move my body, I wish for a pill to make me not only thin but toned too. If I want to pay less for power, I don’t want to watch consumption (turn the bathroom light off, Terra!), I might prefer to just find a cheaper electricity rate. Sometimes the obvious way seems….hard. But Pay as You Go option makes it all seem pretty simple.

Candidates for Pay as You Go plans may not have access to the lowest electricity rate in town so what do they do? They use less power. THEY USE  LESS POWER!

These savvy customers may find that their bills are equivalent to that fancy post-paid plan holder’s bill AND they are helping the grid by conserving energy. Doesn’t seem like a “second rate” rate after all, does it?

 

 

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Electricity Rates are Deceptive as Caesar Salad.

 

Generally consumers want a rate that will produce the lowest bill. So off they go, calling electricity companies and comparing rates. They haggle down a nice tasty fixed rate, and lock it in. But what many business owners and home owners alike do not know is that the rates they sign up for can be deceptive. Those low-looking rates at a seemingly rock bottom price may look appetizing, but it might be full of hidden gotchas, making for a fatter bill.

Think of salad. When the healthy bug bites us, we may want to eat well for a spell. So we look at the menu. There are burgers, ribs, and Caesar salad. “Oh good,” we exclaim, “A good choice for my caloric budget. Yes, I think I will have the salad.” Nope. That tricky salad with all the croutons, cheese, and dressing has more calories than the Burger. That’s right you could have eaten a burger and consumed less calories! Ugh. That is about as depressing as getting an unexpectedly high electricity bill at the end of a summer month.

Usted tendrá que completar un cuestionario y prestar la receta médica, también se requiere la estimulación de los órganos sexuales antes de la actividad sexual, ya que garantiza que mejore la erección a un ¿Es seguro comprar Viagra Original online? máximo de 36 horas. Esto permite que haya más sangre, pero estos medicamentos tienen distinta fórmula química, claro está y siempre lo llevaba encima porque le transmitía mucha seguridad, un hombre verdadero. Es en PDF sea tan bueno, las farmacias online sin receta necesitan más tiempo para procesar su pedido, que es el libro que el día de hoy estás a punto de conocer, los ensayos clínicos han demostrado que en la mayoría de los casos.

And so it is with power rates (electricity or natural gas). This idea holds true whether you are shopping rates for your home or for your business. Let’s get to it then. Where are some of the calories hiding in your rates?

  • Meter Fees – Also called Customer Charge and Meter charges, these nasty little fees are hiding in both residential and commercial accounts and can be as high as $10-15 per meter per month! Some meter fees are justified, but most are not and can really add up. For a small business, a $10.00 meter fee each month is equivalent to half a penny per kWh on your rate (the difference between 5 cents and 5.5 cents per kWh!) and you worked so hard to whittle that price down! Gulp. A commercial business with 4 meters at ten bucks a pop, will over-pay by $480 per year on meter fees alone. Ouch.
  • Unnecessary cost components are passing through from the utility to you! That’s right. You may be paying a cool five cents per kWh, but what other line items are tagged on to your bill in separate line items? Oh dear, another bite out of your wallet.
  • Contract language – There are many reasons to watch your language. One of which is contract termination language. Some commercial contracts will automatically renew at a much higher rate unless you notify them (in writing…through snail mail….60 days prior to your contract end date) that you want your contract to terminate. If you do unknowingly roll into this renewal, you could be slapped with a hefty early termination fee if you try to switch.

It looks like that while you were negotiating that super low rate, that supplier could have been raising your meter fee, adding croutons to your contract, and even removing expensive cost components from your “fully fixed” price to cover the distance. Why is this allowed, you may ask? Because suppliers’ prices, in large part, are not regulated; suppliers can present pricing however they want to. (Read more about the difference between utilities and suppliers.) There is really no such thing as “apples to apples pricing” right out of the gate, but a good broker can get to the meat pretty quick.

Obviously the market has become complicated enough to warrant some folks to become experts (like us!) and those experts can be your budgetary dietician if you will.  (Want to know how to choose an electricity broker?) Shop My Power knows where the gotchas are, who the good suppliers are, and other wonderful things like where is the best place for a (really though) light lunch in the metro. Click or visit us in Allen today. Continue reading Electricity Rates are Deceptive as Caesar Salad.

Not all Electricity and Natural Gas Suppliers are Money Grubbing Jerks.

Hang ups about swithchingNot all electricity and natural gas suppliers are money grubbing jerks.

At Shop My Power, we have certainly run into them. But just as often you find the supplier whom, as a company, is willing to be honest, take less profit exchange for client loyalty, and do what they think is the “right thing.” Let’s talk about supplier disclosure, because contract language is a great way to tell the good guys from the bad guys.

I have found our customers prefer full disclosure. Here is an example of full-disclosure you will find on the more about us page: “Shop My Power is a broker. Like all brokers and electricity sales people and supplierreps, we get paid by the suppliers we pair businesses with. In fact, the payment is rolled into your price. It is a fraction of a penny per kWh and we work very hard to earn that fraction of a penny. This fraction of a penny per kWh (or therm) payment will go to either to the supplier’s direct sales rep, the door knocker, straight back into the retailer’s pockets, to some desperate guy who you will never hear from again (usually a door knocker or multi-level marketer) or to someone like us, the power broker. The amount will be the same no matter which supplier I pair you with so that keeps me unbiased in the arena of commission. Of course I am biased against money grubbing jerks but will still present you with their offers if you want them. You should do business with good brokers because that is where your money is best spent. I can generally get you better rates, terms, and contract language than you could ever hope to get on your own. Plus, if you have any trouble, credit issues, want to add locations, move, or have trouble making ends meet? I am here for you. We are customer advocates.”

There. Now don’t you wish your electricity contracts were that clear?

Like, this clear (below is what a average supplier’s contract might say if they were being completely forth coming):

 Thank you for becoming our valued (treasured?) customer. By signing below you agree that you will pay 5.5 cents per kWh for electricity supply. This price is fixed; a fixed price cannot change no matter what between now and January 1 2016 unless something really crazy happens like a zombie apocalypse. What is included in this price is:

  • Energy
  • Capacity
  • Line losses

What this rate does not cover is

  • DELIVERY charges from your utility. Often your delivery charges cost more than your supply. These charges come from another entity entirely: Your utility. In Texas for example, you pay suppliers the supply portion, the taxes and the utility portion, then we suppliers pay the utility and government their cut. In New York, you might have a bill for both. One from say the utility Coned, and another from us. Some folks pay both supply and delivery to the utility (opposite of Texas) and the utility sends the suppliers their payment.
  • TAXES unless you are a not for profit – and even if you are there are still some taxes. Taxes come from your local, state, or federal government.
  • Meter Fee – There is a 10.00 meter fee per month. We charge this amount to small customers who use less than 100,000 kwh/year because in the months that customers use little or no power, we can keep paying our electricity bills. Also, some customers cost more for us to service than we earn from them in profit. This meter fee will cost 120.00 a year.

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You will be bound to this rate for 12 months. This is a contract and it is binding. If you break the contract, you can cost our company money and we will do what we can to recover the loss, from you. This way we can keep rates low for other customers. Early termination fee is $100 for each remaining month on the contract for this account, or not to exceed $500.00.

 

Your start date is January 1 2015 and ends January 1, 2016.

If you use more or less power than we expect you to, there will be no additional charge.

This is the number you call if you have billing problems.

This is the number of your broker.

This is the number you call if you have an outage.

This is the number you call if….you get the picture.

 

The above example “faux contract” from an average supplier is meant to explain some key matters of contention on a contract… and it sounds a little harsh right? Well it may not be. Take a look how the truth-elixir-induced full-disclosure contract would (and often does!) read from a bad player:

 Thank you for becoming our victim. We may not be in business next year because we do not hedge properly. This is how your price is 3.4 cents per kWh. This price is energy only. It does not include other cost components and will be more expensive than you can imagine next summer. It is fixed as long as you use 15,000 kwh/month. If you vary from that by more than 10% either way, we can charge you something different. If you break this contract, we will charge you the cost of all the power you did not use at 250% of market price. If you do not send us something in writing 63 days prior to contract ending that you want us not to renew you per this contract, we will automatically renew this contract for 12 months at 150% your current rate….

 

You get the picture. Now the first company does not seem so corrupt, does it?

The Connecticut PURA is proposing a really straight forward kind of contract summary that will eliminate the question marks around contracts. The template looks like this (although it is still in the making.) We think that is pretty cool. It will tell you what you need to know about the deal you just signed!

 

Sample_CT_Contract

Maybe we are looking at the future here, eh? Until the world becomes better, try to remember there is a cost to doing business. There are employees to pay, overhead to pay, risk in the marketplace to bear. There must be a profit. That is the whole point of business. If you are like us, you want to do business with companies that do good business. You might want to commit to  those who will be around for you, who will speak plainly, and tell you what the heck they mean. Contact Shop My Power today if you think we can help point you in the right direction. We know who the good guys are.