What to Consider When Picking an Energy Provider

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With nearly a million residents living in Fort Worth, it isn’t surprising that dozens of energy providers offer service in and around the city. Being able to choose your energy provider is a freedom not available in many states, but sorting through all the options can be tedious in the deregulated market. Knowing what factors actually matter when comparing energy providers can help you pick the best option for your home or business.

What to consider most

Here are a few factors that can help you sort through the available pool of energy providers.

• Satisfaction guarantee — Many providers offer some kind of satisfaction guarantee that allows you to switch or cancel a plan within a set amount of time (usually 30 or 60 days). This guarantee gives you the flexibility to sign up for a plan and try it for one or two billing periods. If it doesn’t work well for you, you can switch to another plan from the same provider or, in some cases, cancel service entirely with that provider. Satisfaction guarantees are often a sign that providers are confident in their service.

• Pricing transparency — Price is normally top of mind for customers, which is understandable. Most residents want to pay less for electricity every month. But simply signing up for a plan with the lowest listed rate (shown in cents per kilowatt-hour [kWh]) can be misleading. Rates are normally advertised for the 1,000 kWh usage tier. If you fall into another tier (either 500 kWh or 2,000 kWh), you’ll pay a different rate. What’s more, some plans come with bill credits, which can be enticing when you sign up but impact the actual rate you pay per kWh in the long run. Ideally, you’ll find a provider offering a straightforward plan with transparent pricing. Unless you fully understand the details of a plan or are willing to track your usage every month, a fixed-rate plan without bill credits or any variables that can impact your overall rate may be the safest bet.

• Contract lengths — Most providers offer contracts lasting 12 or 24 months. Some offer longer contract terms that last up to 36 months, while others have contracts for shorter periods of three to six months or month-to-month plans. If you rent your home, consider choosing a provider with contracts that align with your lease. Residents who plan to stay in their homes for several years could choose a longer contract. Remember that if you choose a plan that requires a contract, you’ll likely need to pay an early termination fee (ETF) if you cancel service before your contract expires. You won’t be charged an ETF if you cancel service because you’re moving.

• Rate types — There are two common rate types for residential energy plans: fixed-rate and variable-rate. In general, fixed-rate plans are ideal for customers who want to sign up for a plan with a single rate and have more predictable monthly energy bills. Variable-rate plans mean your rate will depend on the wholesale cost of electricity, which can change based on supply and demand. Some months your bill could be lower, while other months could be significantly higher. Most providers offer fixed-rate options, but a smaller pool of providers also have variable-rate plans available. Consider your comfort with changing rates before choosing which rate type works best for you.

• Online reviews — Like any other company or service, electricity providers in Fort Worth have a wealth of customer reviews and testimonials available online. Be mindful of where you find these reviews. If you’re looking on a provider’s website, odds are most of the reviews will be positive. If you’re looking somewhere like Google Reviews, you might find a more balanced blend of positive and negative reviews. Customer reviews can be helpful, but you should always do your own research.

Secondary factors to consider

• The Better Business Bureau — The BBB can be a helpful place to find information about providers, but take BBB accreditation and scores with a grain of salt. Companies can pay for their BBB score, so it might not be an accurate reflection of a provider’s quality of service.

• Years in business — Deregulated energy markets can be volatile, and sometimes providers go out of business. If a provider has been in business for several years, chances are it will continue to operate successfully in the market for the foreseeable future. However, new providers that have recently entered the market are not necessarily bad. What’s more, sometimes energy providers will be acquired by other companies. With so much shifting and changing in the energy market, you don’t need to worry as much about the years in business.

• The cheapest rate — It can be tempting to sign up for a plan with the provider offering the cheapest rate you can find. Before you do, make sure you’re checking for rates that match your usage tier (rates typically vary by tier). Your usage tier is the average amount of energy you use in a given month. You can gauge an estimate of your energy usage by checking past bills. If the most important aspect of a plan is a low rate, shop for plans that offer cheap electricity rates specifically for your usage tier.

How to sign up for a plan with an energy provider

Signing up for an electricity plan is normally a pretty quick and simple process. If you know which provider you want to use, you can sign up for a plan directly through the provider’s website. If you aren’t sure which provider is best for you or you want to compare plans from several providers, shop around to understand your options.