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In Texas, record heat boosts electric bills for consumers with variable rates
by BRAD WATSON
Monday, Aug 29 at 7:13 PM
The heat is expected to start breaking up later this week. But residential electric consumers on variable rate plans will likely be steamed for awhile.
The record demand for power means that many of them may be paying a lot more.
Ron Kocher of Irving knows about the financial heat of buying electricity on a variable rate plan. He thought it was a good deal until prices spiked in 2008 and he quickly found his bill almost doubled.
“You are vulnerable to what the market is going to do,” he said. “I’d rather have some kind of control over it through a fixed rate.”
Consumers like Kocher can get an attractive deal on power when rates and demand are lower in a variable rate plan that can fluctuate month-to-month.
But when unplanned factors like record heat and demand come along, power providers can raise prices at will.
Mark Goodson is president of Public Utility Brokers, a company that tracks and negotiates electric rates for small businesses. He says high heat means higher costs.
“The more demand that you are getting to peak records and ERCOT is issuing all these warnings about conservation and rolling blackouts… I guarantee you that you are paying peak dollar for that energy that you are using,” he said.
Some power providers offer low teaser rates in variable rate plans. But the fine print shows the price is just good for the first month and floats after that.
The state requires electric providers to post their variable rates, and one shows its kilowatt hour price jumping about one-third since June.
Other consumers complain of 100 percent hikes, with bills suddenly hundreds of dollars higher.
One benefit of variable rate plans is that customers can drop them at any time without penalty, and that’s what Ron Kocher did.
“You don’t know what’s going to happen,” he said.