Commercial electricity for Houston businesses

Houston businesses have been able to choose their electricity supplier since 2002. Two decades later, a substantial number are still buying power from whoever they were assigned to at the start, or from a supplier whose contract quietly auto-renewed while everyone was busy running the business.

That is not carelessness. A commercial electricity contract is genuinely tedious to evaluate: the headline rate is only one of the terms that determines what you pay, the usage data suppliers price against is not on the front of your bill, and the offers that arrive in the post are engineered to look comparable when they are not. Most owners have better things to do, so it sits.

Half your bill is not shoppable — start by knowing which half

Before talking about savings it is worth being precise about what can actually change. A Houston commercial electricity bill has two structural halves:

What actually determines the price you are offered

Two Houston businesses on the same street, using the same annual kWh, will be quoted different rates. The variables that move the number are:

• Load factor. Steady, round-the-clock consumption is cheaper for a supplier to serve than the same total delivered in a narrow afternoon spike, because covering that spike means buying expensive peak-hour power. A warehouse and a law office using identical annual kWh are not equally attractive accounts.
• Contract length. Terms typically run twelve to sixty months. Longer is not automatically better — it buys certainty and sells flexibility, and which of those you need depends on whether your business is growing.
• When you sign. Wholesale power prices move daily with natural gas, with ERCOT's forward curve and with weather forecasts. The same account priced two weeks apart can come back materially different.
• Business credit. Suppliers assess credit before pricing. A weak or thin credit file can mean a deposit requirement or a loading on the rate, and it is better to know that before you are surprised by it.
• Usage data quality. An account presented with twelve months of interval data is priced against what it actually is. An account presented as a single monthly total is priced against an assumption, and assumptions are priced conservatively.

What we do that a comparison website cannot

Rate comparison sites optimise one number, because one number is all they have. That works reasonably for a household. It works badly for a business, where the terms sitting behind the rate routinely matter more than the rate.

Reading the contract means checking, at minimum:

• The volume tolerance band — how far your usage can move from the forecast before the supplier settles the difference at market prices. For a seasonal business this can matter more than the rate itself.
• Pass-through language — which charges are fixed in your rate and which are passed through to you as they change. Two contracts with identical headline rates can behave very differently here.
• The early termination fee — what leaving costs, and whether it is a fixed amount or a market-based calculation that could be far larger.
• Renewal and evergreen clauses — what happens at the end of the term if nobody does anything. This is the clause that creates most of the overpaying we find.
• Assignment terms — whether the contract survives if you sell the business or the property.

Where we work in Houston

All of Houston proper sits in CenterPoint Energy territory, and so do most of the suburbs around it. We build a page for each metro city we work in, with the local specifics that actually differ — the anchor industries, the load profile, and in a couple of cases the fact that retail choice does not exist at all.

That last point is worth stating plainly. Parts of Montgomery County, including Conroe and much of the area north of The Woodlands, are served by Entergy Texas, which is a regulated utility with no retail choice. No broker can switch a supplier there because there are no suppliers to switch between. We check the ESI ID before we do anything else.