The price of electricity consists of three components: electricity, electricity transmission and taxes. The share of electricity can be competitive. For electricity transmission, the customer always pays to the local distribution company. When it comes to the Power to Choose Texas then be sure that you get all the time.
What is the basic fee?
The basic fee is typically a monthly or annual fee. Its unit is dollar per month or dollar per year. The basic fee related to the electricity sales contract covers the fixed costs of the electricity seller. These costs do not depend on the amount of energy used. For example, an electric bill is sent the same to a low-cost and high-consumption customer.
The basic charge related to the electricity transmission contract covers the fixed costs of the TSOs. These costs do not depend on the amount of energy used. For example, the electricity network needed for the electrical connection must be maintained even if no electricity is used.
What is the Energy Charge?
An energy charge is a charge linked to the amount of energy consumed. Its unit is cents per kilowatt hour. All energy consumed must also be produced. The electricity seller pays the energy he buys to the power generators according to the amount of energy purchased and resells the electricity he buys to the consumer. Thus, the energy charge shown on the electricity sales invoice includes e.g. the costs of the electricity producer and the electricity seller.
All energy consumed must also be transferred. The amount of energy invoiced in the electricity transmission mainly covers the costs of electricity transmission and distribution, such as the costs of constructing, operating and maintaining electricity networks.
Why are electricity sales contracts priced at different electricity dealers?
The sale of electricity was liberalized in 1998, after which there was free competition in the sale of electricity. Electricity sellers can provide electricity at prices they decide all over Finland. The Finnish electricity market was one of the first in the world to be opened up to competition.
Why do electricity transmission companies have different prices for different transmission networks?
The transmission and distribution of electricity is a legal monopoly and each distribution network operator has its own domain. The transmission price of the distribution network company is affected by the structure and location of the electricity network and the number of customers. For example, if the electricity grid is located in rural areas, there is more per kilometer of cable per customer than in cities. This affects the electricity transmission price.
Does Tendering Affect the Transmission Price of Electricity?
Tendering for electricity does not affect the electricity transmission price. The electricity transfer price is the same no matter which electricity supplier you buy your electricity from. The price of electricity transmission is determined by the local distribution system operator.
Do I have to pay a basic electricity charge even if I do not use electricity at all?
The basic electricity charge is payable every time your electricity contract is in effect. Electricity companies have obligations and costs that are not directly attributable to electricity consumption. The distribution network company is responsible for e.g. maintenance and development of the grid, costs to the electricity seller for administrative routines such as contract management and billing.