Energy Provider Rate Manipulation
Rates are not what you think they are...
Our energy providers, much like our politicians, manipulate the information that they give us. While our politicians are looking to earn our votes, our energy companies are looking to hold a positive light in the public image.
As least the politicians need to earn your vote, whereas in most markets your power provider gets your business whether you like it or not.
So, what is it that energy providers do that is so manipulative?
Let's start with Tier Based energy plans. These energy programs penalize people for using energy when they need it most. In a tier rate structure, they'll sell you energy at a fair market rate and they'll even "brag" about said generous rates. What is not discussed is that those fair rates only exist for a small amount of energy. In most markets the Public Utility Commission only regulates the first tier of energy rates so that's where your fair pricing comes in. Once you've used what your energy provider deems as enough energy, your rates exponentially increase, and this is allowed by the PUC. So maybe your energy provider is boasting about their low energy rates, but in the end, you're taxed through the teeth and end up spending well over fair market value for energy.
Even in "non-tier" markets energy companies will often hide the true cost of energy with smoking mirrors. Let's take a large energy provider in Nevada for example. They like to brag about offering lower rates to their consumers now than in the past. This is a laughable claim because all power consumers in Nevada have seen their energy bills exponentially increase over the past ten years. So, how could they make this claim when we all know it's not true?
What they do is create different charges. It's like buying a car at the local dealership for $9,999 before doc fees, reconditioning fees, tire protection, and preparation fees which get you to a $15,000 cost.
Some power companies will keep the line item used for energy rates down but then add several other "taxes" to your bill. It doesn't matter if they do keep a low rate, what matters is what actually comes out of your bank account. This is why the best practice to determine your actual energy costs is to take your total monthly payment due and divide it by your total kilowatt hour usage.
For example, if your monthly energy cost is $250 and you used 1,000 kilowatt hours, you can use the formula below:
Total Due/Total Kilowatt hours used
250/1000=.25 cents
In the example above, regardless of what rate your energy provider claims, you're paying .25 cents per kilowatt hour.
This is the best way to see through the "BS" about what your energy provider claims.
For some energy statements it can be hard to figure this out because they'll break down your energy usage into buckets, so the key is to add all of the buckets together and use that as your total kilowatt hour amount.
If you want to learn more about your real energy charges, one of our energy experts will be happy to help you read through the fluff.
Get an energy assessment on your home where we tell you what you're paying and what you could be paying.
Your energy rates aren't what you think.
