Why Should You Read Your Electricity Supplier’s Terms of Service

by | Jun 29, 2023 | Industry News

Top Five Things Your ToS Covers

Read the Terms of Service before you sign the contract. Find what it could cost you if you don't!
Understanding the fine print on a Texas electricity plan can help save you money. Learn why you need to read your supplier’s Terms of Service!

We’ve all pretended to read the terms and conditions without looking at it. But, your Texas electricity supplier terms of service are not something you should glimpse over. Usually, your plan’s EFL summarizes the most important aspects of this document. But, knowing what’s in the terms of service agreement before you sign is the best way to avoid hidden charges. Here are five things you could miss if you don’t read your terms of service.

1. Variable vs. Fixed Rate Terms of Service

First and foremost, you need to know whether you’re on a variable or fixed rate. 

A variable rate’s energy charge changes depending on the market value of electricity. Since the demand during the summer’s AC season and the winter’s heating is higher, energy prices are usually high. But they’re at their lowest during the spring and fall. 

On the other hand, fixed-rate plans lock in the price of electricity for the length of your contract term. So, if you get a favorable rate during the spring or fall shoulder months and you lock it in for a longer time, you can enjoy cheap electricity for up to 36 months.

2. Plan Types and Usage Windows

The three most common plan types are straightforward, tiered, and bill credit plans. Straightforward plans are easy. The more you use, the more you pay. But, this may not be the case for the other two.

Tiered plans, as the name suggests, organize the charges into tiers based on usage. For example, your rate may be different if you use 750 kWh or 1250 kWh every month. Knowing where the tier change is can help you adjust your minimum or maximum usage and save you a lot of money.

Bill credit plans are a bit similar. After a certain usage amount, they give you credit that lowers your overall bill significantly. Knowing where this minimum is and matching it each month can lower your bill on these types of plans.

3. Terms of Service & Early Termination Fees

If you decide to switch to a different provider before your contract is up will most likely come with an early termination fee. Some suppliers charge $10-20 per month remaining or a lump sum of $100-200. Knowing what the conditions of early termination are and what fees they bring will influence your choices.

4. Terms of Service & Plan Expiration

You need to know what happens when your plan’s term comes to an end. Usually, your provider will send you a notice beforehand to inform you that your contract is ending and offer alternatives. Some may offer to continue your plan at a new rate or offer a new plan. But, if you don’t respond to a renewal notice and you don’t line a new plan up, they may automatically switch you to their variable rate plan. And that may be much more expensive than a fixed-rate option.

5. Late Fees

Every company has different policies and fees regarding late payments. While no one plans to pay the electric bill late in advance, it’s good to know to expect if you’re ever in that situation. And your electricity supplier’s terms of service is the best place to find out what your options and obligations are. 

Find a Great Deal on Electricity

Being informed about your plan and your options is the best way to save money on electricity. The second best way is to visit www.texaselectricityratings.com. You can find all the latest offers, filter the plans, and find the cheapest rate for electricity all in one place.

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