Why Is My Electric Bill So High? Common Causes and Solutions

Shocked by a high energy bill?

Most people know the frustration of a high energy bill, especially in Texas. Many factors could cause a spike in your energy bill, such as seasonality, faulty appliances, and increased usage. To solve your high energy bills, you’ll first need to investigate and address the root cause.

Before launching an investigation, familiarize yourself with the main charges on your energy bill to reduce confusion.

Understand the main charges on your energy bill

Texas energy bills have several components. Here are the main fees you can expect each month:

• Electric supply charge: The largest charge on your bill, the electric supply charge is based on your energy consumption. The fee is calculated by multiplying your electricity rate by the number of kilowatt-hours (kWh) you used for that billing cycle. Your provider may also charge a monthly base fee for service.
• Utility delivery charge: Your utility company charges a fee for delivering electricity to your home. The delivery charge may appear on your bill as a Transmission and Distribution Utility (TDU) or a Transmission and Distribution Service Provider (TDSP) charge. It typically includes a base charge and a rate per kWh consumed.
• Taxes: Your bill will also include city and state charges. There may also be a Miscellaneous Gross Receipts Tax (MGRT), which goes to the utility company. Lastly, the Public Utility Commission of Texas (PUCT) charges a tax on a Public Utility Commission Assessment (PUCA).

These charges are standard for all deregulated energy customers across Texas. Now that you know what charges are normal, you can begin investigating the sudden spike in your bills.

Investigate your high energy bill

Unfortunately, figuring out why your bills are high will take some digging around. Identify the most common culprits and try these strategies to help you achieve more manageable bills:

1. Review your energy usage to find out if you consumed more electricity.
2. Assess your home’s efficiency and identify appliances that may be draining energy.
3. Consult your energy provider and utility company as a last resort.

Compare your usage month-to-month

Before jumping to conclusions, compare your current energy bill to the previous month. Pay close attention to the number of kWhs you consumed each month to identify if your usage increased. Any significant increase in usage is likely the main driver behind your higher energy costs.

By comparing your bills, you can also determine if your rate has changed. Rate fluctuations are typical for variable-rate plans, which vary each month with the wholesale cost of energy.

Diagnose your higher energy usage

In most instances, your bill likely spiked because you used more electricity than in the previous month. There are a couple of reasons why this may have occurred. Luckily, you can lower your energy usage by diagnosing the cause.

Texas’ weather can wreak havoc on your bills

Texas is well known for its unpredictable weather, including hurricanes, cold snaps, and heat waves. Especially in summer, Texans constantly rely on AC to stay cool amid the extreme heat. As a result, many Texans find that their summer energy bills are higher than spring or fall, entirely because of AC. If your energy bill was higher than last month’s, consider how the weather affected your energy usage. If a heat wave, cold snap, or storms hit your area, you likely used more electricity to cope with the conditions.

How to address increased electricity usage due to the weather:

The reality is that you may not be able to fully resolve this problem if your bill went up due to weather-related issues. However, you can try to alleviate the burden on your bills with a few energy-saving tricks:

• Replace your HVAC filters and consider a professional inspection to ensure your system is operating properly.
• A smart thermostat can help keep your home’s temperature comfortable and efficient during summer’s peak heat or winter cold snaps.
• Offset your AC with ceiling and standing fans. Turn your ceiling fans counterclockwise to suck up hot air and push down cool air.
• Check for gaps around your windows and doors, and seal up any cracks. This trick helps keep your home’s internal temperature regulated during summer and winter.

Inefficient home appliances are quietly ruining your bill

Inefficient appliances and lighting could be driving up your electricity bill. After heating and cooling, lighting and large appliances like your water heater, refrigerator, dishwasher, dryer, and washing machine are the next highest consumers in your house. All of these energy users can add up throughout the month, increasing your bill.

Strategies to save:

• A quick and cheap way to save electricity is to switch to LED lights, which use up to 75% less electricity than incandescent bulbs.
• If it’s time to upgrade your large appliances, consider ENERGY STAR-certified appliances. These energy-efficient models use less energy to do the same task. For example, an ENERGY STAR washing machine uses 20% less energy and 30% less water than regular machines.

Vampire energy sources slowly drain electricity

Vampire energy, also known as phantom power, is electricity that is quietly wasted in your home. Small devices like game consoles, computer monitors, and phone chargers continue to use energy when left plugged in but not in use. While vampire energy probably isn’t drastically increasing your bill, it is adding more kWhs of electricity to your overall consumption, which ultimately costs you more money.

Energy plan compatibility: A common pitfall

In some instances, high energy bills are related to an incompatible energy plan. Since plans often have different prices for each usage tier, it’s crucial to choose a plan that aligns with your usage patterns.

Watch out for bill credit plans

Bill credit plans can be a great way to save money, unless you don’t qualify for the credit. This type of energy plan requires you to hit a certain usage level to qualify for the discount. It’s critical to meet the usage threshold each month; otherwise, you might miss the credit and end up with an expensive bill.

Review our guides that discuss shopping according to your average usage to make sure you avoid this common price trap:

Best energy plans for low-usage homes

Best energy plans for high-usage homes

Think twice about variable-rate and time-of-use plans

Since variable-rate plans are tied to the energy market, your electricity rate fluctuates each month with the market cost of energy. Variable-rate plans can be great for flexibility but often lead to expensive bills when demand peaks. If you’re dealing with high energy bills and you have a variable-rate plan, switch to a fixed-rate plan for more stable bills.

Time-of-use plans (TOU) seem good on paper but rarely work out in your favor. These plans typically offer free or discounted electricity during “off-peak hours,” like evenings. The issue is that most people use more electricity during the day. Unless you have unique circumstances that allow you to take advantage of the discount, TOU plans tend to lead to higher bills than traditional fixed-rate plans.

What to do if your energy bill seems wrong

If you’ve assessed all these possibilities but still feel something is wrong with your bill, you can check with your energy provider and utility company. Follow these steps:

1. First, contact your provider to review the details of your bill and plan. They can double-check your charges and explain any components of your energy plan that may be causing the spike, such as a missed bill credit.
2. If your provider didn’t find anything wrong on their end, but you still suspect something is amiss, contact your utility. Your utility company is responsible for reading your meter and can investigate potential meter issues. Although it’s uncommon, your meter may be faulty and misread your usage.
3. Lastly, if neither of these options worked and you still believe your bill is incorrect, you can file a complaint with the Public Utility Commission of Texas (PUCT). The PUCT reviews complaints and service issues related to providers and utilities and could help investigate your bill.

Electricity bill cost FAQs

Can I avoid delivery fees?

No, everyone in Texas’ deregulated market must pay delivery fees to their local utility company. These charges ensure electricity is transported and delivered safely across the power grid to homes and businesses.

How can I tell what is draining my electricity?

Assess your home’s largest energy consumers first, such as your HVAC unit and large appliances like your water heater, laundry machines, and dishwasher. Old or faulty machines may consume excessive energy.

What would cause a sudden spike in my electricity bill?

If you have a variable-rate plan, then it’s likely you’ll experience a spike in your bill when the energy market is experiencing increased demand. Otherwise, if your bill suddenly goes up, you may be using a certain appliance more, such as air conditioning in summer or heat in winter.

Is switching energy plans worth it?

In some scenarios, yes. If you browse plans on our marketplace and notice that electricity rates in your area are lower than what you are currently paying, it might be worth switching. Call our team for guidance at the number on your screen today.