Electric Company Charges | Things You Need to Know

womanCharges involved in an electric bill can be confusing simply because the act of deregulating an electric company market that was once one large monopoly doesn’t make much sense to most people.

For instance, you previously received your electric power from one pole and wires company and now that the market is deregulated the same pole and wire appears at your house and there are no additional wires coming in.

So how do 30 different electric companies come in and begin to offer electricity service? How do the charges get sorted out and which ones are from which company?

A beginning question by many is how do you avoid being charged double? You see even when deregulation occurs you still get billed by your old electric company and your new provider you choose.

The old monopoly electric company can only charge you for pole and wire charges related to the setup and maintenance of the transmission lines.

The generation charges are handled by one of 30 or so retail electric companies you may decide to go with. These retail electricity companies buy their energy at wholesale on an exchange or spot market and resell it to you.

There is usually some type of organization that oversees the entire switching process so that when you switch to an alternate electric company from the old monopoly there will not be double charging and other nonsense.

The entity that oversees the market in Texas is ERCOT. This agency stands for “Electric Reliability Council of Texas” There are many other similar entities in other states that do the same type of thing by offering an unbiased service of switching electric service customers from one company to another and selling back excess power.

What happens in newly deregulated markets is the capitalization on customer confusion surrounding the deregulated market. Some electric companies come into a new market and create marketing and sales scripts that leads their customers down the path of least resistance by using familiar brand names and charge categories.

These bad unethical companies will go so far as to call some of their retail charges official sounding names that appear to be charges that are past through by the pole and wires company but are really just disguised retail electric charges with no real meaning.

Another tactic is to get customers to switch over to a new company with a new brand name by bringing up the old monopoly electric utility name and referring to notices they sent out about deregulation.

The notices are sent out to inform their customers that electric choice is now available and so new companies may knock on your door and convince you that your switch to a new company is simply the same thing you were notified about by the monopoly electric utility in your area.

These sales people will try to convince you that the electric service charges are all the same and that you will even still receive a bill with the old monopoly electric utility charges while the retail rate will be cheaper.

What these energy suppliers are doing is using some truth while sprinkling it with deceptive trade practices. Once this electric company has you on board their train of lies you may switch only to discover even more electricity service charges than you had to begin with.

To avoid this type of trick and scam we recommend you use a service like our electric company comparison chart that bundles in all fees and charges and clearly represents each electricity company without leading you to believe it is the old monopoly electric utility. Newly deregulated markets may see these type of situations from MD power companies and PA electricity suppliers.

Once you have found the cheapest electric rate you can sign up online or call one of our energy consultants at 1-800-971-4020.


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