Some plans charge for not using enough electricity

July 5, 2011 3:26:27 PM PDT
The hot weather is causing a strain on the power grid in Texas and that has grid operators urging all of us to conserve electricity. But did you know that some power plans charge you more money if you do not use enough electricity?

It is actually happening and has been for years. The usage charge usually applies only to the cheapest power plan, something that most of us choose.

When Troy Brown heard the plea to cut back on electricity to prevent rolling black outs, he responded.

"Sometimes, unplug certain things in the house, to try to save on electricity; turned off most lights," Brown said.

Brown lives in a small apartment and while he thought cutting back on electricity would save power and lower his bill, but he was surprised to learn he could be charged for not using enough electricity.

It turns out power companies have been issuing minimum use fees since the industry was deregulated more than ten years ago. If consumers do not use a certain amount of power each month, they will be charged the minimum use fee.

"It boils down to the cost of doing business," energy analyst Alan Lammey said.

Lammey says power companies charge the fees because it costs them money to maintain customers and the minimum fees help to cover that cost. Lammey says the charges differ by company.

"Some providers charge $15 a month, some charge $5, but that is really the situation behind that, there is a cost behind maintaining that customer if they fall below a certain amount of projected usage," he said.

The charge does not apply to every power plan; generally it is the lowest priced product that has a minimum use fee.

"That is why it is important to take a look and pay attention to what you are signing up for. Ask questions, do you have a monthly service charge? And is there a minimum usage that I have to be able to use?" Lammey said.

Not all power plans include the fee; for instance wind plans do not have it, but they cost more per kilowatt hour. And realistically in the middle of the hottest summer on record, most folks are probably worried about using too much rather than not enough.

Anyone can be subjected to the minimum use charge but if you live in a small home or apartment and are really cutting back, you could see this fee even in the summer time.

So read the terms of your plan and if you switch make sure to ask about minimum use fees.

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