8 Hidden Fees That Could Be on Your Texas Electricity Bill and What They Mean [CNET]

Double-check your electric plan for any hidden fees lurking in the fine print, especially if you live in Texas. Here’s what to look for.

Texas energy plans promise savings but often deliver sticker shock.

You might think you’ve scored a sweet deal with a fixed-rate electricity plan, but hidden fees can quickly drain your wallet. While some charges, like sales tax and late payment fees, are expected, others might catch you off guard — like a $4 fee just to pay your bill over the phone.

Energy providers have a bad habit of hiding extra charges in the fine print, but even smaller recurring charges can directly impact your monthly expenses and budget. Understanding your energy plan’s electricity facts label before signing up for a plan is essential. This document lays out the energy charge, fees and terms of service associated with the plan. 

“Any extra charge means you have to take that money from something else. We know from research that when it comes to choosing between paying for electricity or other household essentials, residents will choose power,” Andrew Robison, a program manager with the Texas Energy Poverty Research Institute, told CNET. “There are real-life impacts from these fees.”

Energy bills aren’t getting any lower, either. A recent CNET survey found that 24% of survey participants are planning to spend less on other essentials to pay their electric bills, while 39% plan to cut back on non-essential spending.  

It can be hard to spot these hidden fees if you don’t know what to look for. To help you out, we’ll break down some common fees that sneak their way into Texas energy plans. Let’s get into the nitty-gritty.

Common hidden fees in Texas energy plans 

Higher-than-expected energy bills are a common complaint toward electric utilities in Texas. In addition to the rate you pay per kilowatt-hour, you’ll also pay a laundry list of other charges found in your plan’s electricity facts label and terms of service documents. 

Here are eight hidden fees that could potentially find their way onto your Texas electric bill. 

1. Early termination fees

Need to cancel your energy plan? You can back out of your plan before the end of your contract, but you’ll likely pay a fee. For example, if you sign a 12-month contract but are unsatisfied with your energy company after three months, you can cancel your current plan and switch providers. While this is a major perk of the deregulated energy market in Texas, these early termination fees can cost anywhere from $100 to $300 or more. 

When you go to terminate your contract, you’ll likely either pay a flat fee or you’ll be charged per the number of months left on your contract. Early termination fees vary by provider and plan. For example, Gexa Energy charges $150 for early termination, while Reliant Energy’s fee costs $295. You can find your specific plan’s early termination fee in your EFL document. 

2. Disconnection fees

Utility companies may disconnect your electricity service if bills aren’t paid on time. Fees for disconnecting and reconnecting will appear on your energy bill. Some companies even have a disconnection notice fee. 

For example, TXU Energy charges $20 every time they send a disconnection notice. And they’ll charge even more if you don’t pay before the disconnection date listed on the notice. These provider fees are in addition to the regular disconnection and reconnection fees from the utility if you can’t pay the bill on time. 

3. Transmission and delivery charge

Transmission and delivery charges are a monthly recurring expense to cover the cost of delivering the electricity to your home. It’s essentially like paying for the use of power lines and poles. And just like you pay for shipping and handling when you shop online, your utility charges a flat fee or cost per kWh for delivering electricity to your home. TDU fees can typically be found near the top of your EFL document. 

4. Miscellaneous gross receipts tax reimbursement

Energy companies in incorporated cities or towns with a population of over 1,000 people must pay a tax. To cover the cost of the tax, you may find this charge listed on your energy bill. Not all companies itemize the tax reimbursement, but either way, you’re paying the price. 

5. Public Utility Commission assessment

Under the Public Utility Regulatory Act, the Public Utility Commission of Texas charges utility companies a fee for each customer address serviced. The fee is passed to you to help utilities recoup the charge, so you’re paying your utility company’s bills too. 

6. Base charge

To cover administrative costs, energy companies often include a base charge. This is typically a recurring flat fee of up to $10. You’ll pay this fee every month regardless of how much energy you use. However, not every electric provider charges this fee, so it’s possible to secure a plan without a base charge. You should be able to find out if a plan has a base charge by checking the plan’s EFL.

7. Usage fee

You’ll be charged for the amount of energy you use per month, of course. But if you use too much or too little energy, expect another charge. For some plans, the usage fee is about $10, if you use less than 800 kWh. Other plans may charge a fee when you use over 1,000 kWh. Review your EFL and terms of service documents to determine potential minimum or maximum usage fees. 

8. Service fees

Need to speak with your utility company? There might be a fee for that. Before calling customer service or requesting documents, consider the costs. Service fees include things like contacting customer service to pay bills and requesting additional bill copies or summary documents. 

You can avoid service fees by using your provider’s online portal to pay bills and review documents instead of contacting customer support. 

Other fees you might be charged 

Not all fees are hidden. Things like sales tax and convenience fees are pretty much expected at this point when paying for goods and services. Here are a few other fees you might see on your electric bill in Texas:

• Sales tax
• Late payment fees
• Insufficient funds or returned payment fees
• Credit card processing or convenience fees

How to shop for the best energy plan in Texas

Shopping for electricity plans in Texas can be a complicated process. Be on the look out for anything that seems like a red flag and always read through a plan’s EFL document before signing up for anything. 

“Watch out for sign-up bonuses and gimmicks, like a free iPad,” Robison said. “It might sound good up front, but then you pay an extra 10 cents per kWh just to be on the plan. Look at plans comprehensively to review the entire package and know what you’re getting.” 

Some prices may appear attractive initially but reviewing the contract beyond just the rate may uncover hidden fees before you are locked into a payment. 

Here are a few tips: 

• Know your usage: Review past energy bills to get a general idea of how much electricity you use in a month. You can use this estimate to choose an energy plan tailored to your usage. If you use over 1,000 kWh each month, consider a plan offering bill credits for your usage to reduce the overall cost. 
• Read the EFL: If you do nothing else, at least read through the EFL.Your energy plan’s fact sheet will list your electricity rate, fees and important details associated with that plan. Review the entire document to make sure you understand exactly what you’ll be charged for each month. 
• Compare multiple plans: Don’t sign up for the first plan that looks enticing.Use energy comparison tools and websites to scope out a few options. Compare the rate per kWh, total bill cost and benefits, like bill credits. 
• Ask questions: Ensure you understand the rate structure, contract terms, additional fees and service options. Get answers to any questions before you sign an agreement. 
• Set a reminder: Know when your contract ends and compare alternative prices available. If you signed up for a plan with a promotional rate, make sure you know what your new electric rate will be after the promo period ends. You can save money by comparing rates and reviewing your contract before renewing. 

What to do if you sign up for a bad energy plan

Free energy, low rates and other marketing tactics are enticing, but it’s not always legit. If you’re unhappy with your current provider, you can cancel your service and switch providers. However, if you cancel your plan before the end of your contract, you’ll likely have to fork over an early termination fee, typically costing $100 or more.

If you’re ready to switch, start by finding a new energy plan that better fits your usage and preferences. After reviewing your chosen plan’s EFL and seeking answers to any questions you have, sign the contract. Your new provider will handle the switch without interruption to your service. 

If you think you’ve been scammed, Robison recommends “finding support in your area from a bill assistance program or community action agency.” You can still switch providers, but you might also want to contact the Public Utility Commission of Texas to file a complaint.