Texas Electricity

A few summers ago it was become much harder to determine which electricity company in Fort Worth offered the cheapest electricity rate. The reason the comparison process was a harder task had to do with a few electricity companies not playing by the PUCT rules. For instance, Riverway Power and National Power Company had attempted to change their fixed electricity prices on their customers. The PUCT came back quickly and told them they could not make the rate adjustment after several hundred complaints from Riverway Power customers. If the energy consumers in Texas had not voiced their complaints then these electricity companies in Fort Worth Texas may have been able to get away with this rate change. Since then Riverway Power was fined by the PUCT and a court proceeding was scheduled. Riverway never showed up at the proceeding and the fine was assessed with no objection from Riverway as they didn’t not even appear to make an objection.

Now when Texas electricity companies offer fixed electric rates to the Fort Worth public they know they cannot get away with a bait and switch tactic that involves offering a too good to be true fixed rate only to attempt to change the rate a few months later. When offering a fixed electric rate to Fort Worth customers a Texas electricity company must properly hedge the energy on a commodities market. This insures that the electric company will get their profit if fuel prices increase and it also insures that the customers electric rate will not increase in price.

Many Fort Worth TX electricity companies buy their energy on the MCPE market. They price near the bottom of what is considered a profit after taking into consideration operating costs. If the variable market known as MCPE were to spike in price to double or triple their norms it could cause some of these energy suppliers to default on their financial obligation to ERCOT and therefore go out of business. Enron defaulted on their financial obligations several times prior to the whole Enron meltdown and excuses were always made that it was related to a miscommunication and other problems related to a large company. A smaller electricity company really has no excuse for not keeping enough money in reserve to meet the financial obligations with ERCOT to continue to offer electricity service to Fort Worth Texas energy customers if variable prices were to spike. ERCOT takes a pretty strict policy with these electricity companies who do not follow the rules. Several times electric providers that could not meet their financial obligations had their customers stripped away from them and placed with what is known as the provider of last resort. This is the ultimate humiliation and usually means nothing but bad news to their customers. Most of these Fort Worth electricity customers that signed up with these low cost electric companies have to go from the cheapest price in the market to a time when energy prices are historically high no matter the energy supplier chosen.

After a default due to energy price spikes you don’t have a choice in picking electricity rates at the bottom of the market. You may have 30 electricity companies in Fort Worth to shop and compare but they all are buying their energy from the same market. If the market is high your electricity rate will not look like what these same providers were selling last year when prices were low. Even if you chose the cheapest electricity company in Fort Worth when fuel prices were high you may see a price range between 16 – 18 cents per kWh. The previous year the price range might have been between 8 – 10 cents among 30 different Fort Worth electric companies. As you can see depending on the time of the year and what fuel price are doing one year electricity rates are cheap in the next year they could be much higher. If your discount electricity company that had you locked in at 8 cents a kWh goes out of business and you have to renew with the cheapest electricity provider all over again during a high time in the market you may find that the cheapest Fort Worth electricity rate is 16 cents per kWh rather than the previous years cheapest at 8 cents per kWh.

Don’t be fooled by a “too good to be true” rate. Some energy experts are actually pretty good at picking those electricity companies likely to go out of business as they can look at their prices and estimate what they are doing. If you have a no name energy company that comes into existence immediately pricing 1- 2 cents per kWh cheaper under the next cheapest electricity provider you can bet they are not hedging their electricity prices and they are buying their energy on the MCPE market without any other safeguard. If they are offering their customers fixed electricity rates at these cheaper prices they are taking a gamble that rates will not double and triple as they sometimes do on the MCPE market. This volatility can cause a provider like this to go out of business and default to ERCOT on their financial responsibility. Any Fort Worth Texas electricity customer at this point would be dropped to the POLR provider at a higher electricity rate and would have to shop at a time when the market is much higher.

We recommend comparing electricity companies in Fort Worth Texas by using the comparison chart. If you click on the “Compare Electricity Rates” link at the top of this page you can compare multiple discount electric companies in the Fort Worth TX area. An energy consultant is available to answer your questions.

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