Usage-Dependent Rates: A Trap for Unsuspecting Energy Consumers

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February 8, 2023

Usage-Dependent Rates: A Trap for Unsuspecting Energy Consumers

Team Nutiliti

Energy bills are often the last thing on our minds, and when we do think about them, it's often only to compare prices from different providers. Unfortunately, these comparisons are often based on usage-dependent rates, credits, or charges, which can be misleading and result in higher bills.

Usage-dependent rates appear attractive at first glance, especially when shopping for energy plans on comparison sites like PowerToChoose. However, these sites condition shoppers to compare prices only at 500-, 1000-, or 2000 kWh/mo, despite actual usage varying widely over the year. Retailers capitalize on this by offering rate gimmicks that appear cheap at those exact usages while charging more overall.

Take the example of a plan that charges a flat $80 for the first 1000 kWh plus 15¢/kWh for usage over 1000 kWh. At first, this may seem like a good deal, with only 8 ¢/kWh if you use exactly 1000 kWh/mo. However, this rate can quickly balloon if you don't use the exact amount. At 1500 kWh/mo, the rate becomes 10.3 ¢/kWh, 11.5 ¢/kWh at 2000, and a whopping 16 ¢/kWh if you only use 500 kWh.

This is why it's important to be aware of usage-dependent rates when shopping for energy plans. Don't be fooled by seemingly cheap rates that can result in higher bills in the long run.

Fortunately, there's a solution to this problem. Nutiliti: Energy Choice is a platform that doesn't have any plans that are usage-dependent, so customers can rest easy knowing they won't be tricked. Nutiliti offers straightforward, transparent plans without hidden fees or rate gimmicks, so you can make an informed decision and save money in the process.

In conclusion, usage-dependent rates, credits, or charges can be misleading and result in higher energy bills. Be aware of these gimmicks when shopping for energy plans and choose a platform like Nutiliti: Energy Choice that offers straightforward and transparent plans.

Written by
Team Nutiliti