Businesses are often thinking about how best to manage their overhead but are not always sure whether retrofitting electric services can be a beneficial part of the equation. After all, if a company chooses to switch electricity providers, are they taking a risk that their power will be shut down? How do they assess the pros and cons of various providers? Are they trustworthy, or will the provider go out of business and leave you in the lurch?
These are all logical questions to ask, and the best way to approach getting the answers is to know how deregulation works and how it can help businesses to determine the right course of action for their needs.
Behind the curtain of deregulation.
State governments have the ability to regulate the price of electricity through their utility grid. They provide all of the servicing of the power lines throughout the state, control any extra service fees, and have to provide power to all residential and commercial customers who reside in the state.
If this sounds a bit like a monopoly, it is just that. For this reason, many state governments have decided to open up fair competition by deregulating electricity in parts or all of their state. Independent providers register to be licensed with the state’s public utility commission (PUC) and then purchase their own power from a regional central grid. Then the independent providers will sell kilowatts directly to their residential and commercial customers. The PUC will continue to distribute the power through their lines to the customer. They will also continue to service the power lines and make sure that the customer receives their power. For this, there is a fee included in the monthly bill that covers the utility’s costs.
How to find the right electricity provider.
If you are a business, the last thing you want to worry about is making a switch to a new provider and wondering if there will be an interruption in your service. But retrofitting electric services is not an issue, because the power itself does not get turned off. You just have a switchover of the rate and paperwork from the utility to your new provider.
In most cases, your PUC has a website that offers a list of the various companies and rates that are available. Many people find these websites to be confusing, because the rates are listed, but can often be deceptive. The lowest rate may have hidden fees attached that are not included in the PUC listing.
Another hidden issue to PUC rate listings is the type of rate the providers are offering. There are fixed rates, which is one rate that you sign up for in your contract for the whole year. It can never change. If, as in the recent winter storm in Texas, the power usage surges and there is a shortage of supply, the grid may charge much higher rates to the providers who are trying to access more supply. If you have a fixed rate contract, you have locked in your rate and the provider cannot pass along the increase in supply costs to you.
On the other hand, many of the lower rates that are listed on the PUC websites are variable rates. They are lower because they are an “introductory rate,” which can be for one month or three months. Then, the rate rolls into a rate that changes each month depending on the amount of supply and pricing that the provider has purchased from the grid. This can work in your favor, because the variable rate could be lower during what is known as “shoulder” months (typically Spring and Fall) when there is less of a chance of extreme weather conditions. But buyer beware! Those variable rates can spike during cold or hot months or during weather events. There is no way of knowing or budgeting for the cost of electricity in these cases.
The best way to protect your electricity budget.
Businesses can spend a lot of time trying to figure out the best solution for retrofitting electric services to meet their needs. Or they can work with professionals who can advise them along the way. Electricity and natural gas brokers are experts at understanding the best approach for any business’ power requirements.
A broker will sit down with you and discuss how your business uses electricity. Is your business seasonal? You may be able to take advantage of a short-term variable rate that can then be shut off after the season is over. You may also have more than one location in different utility zones and need a rate that works for all of your locations. You may need both electricity and natural gas to run your business and require a blended rate.
Some companies have sustainability goals in their business plans. Brokers can work with you to find the best plans that include solar, wind or other eco-friendly methods for producing power. In some cases, your business’ alternative energy source may produce more power than you need, and you could feed power back into the grid and get paid for it by the utility. At the very least, you could be in a net-zero situation where your electricity does not cost you anything.
There are so many options to consider when thinking about how to keep the lights on in your business. Sifting through all of them can be time consuming and confusing if you are not educated about what those options offer, what the small print means in the long run, and how it impacts the environment. Talking to a professional energy broker can help with Texas retrofitting electric services that may save you many headaches, and potentially save you money as well.
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