What is True Price?
True Price is a tool designed to simplify your choices and empower you to find the perfect plan.
Tired of Bill Surprises?
- Have you ever signed up for a new electricity plan with a really low advertised price, only to receive a much higher-than-expected bill later? You’re not alone.
- This happens because some plans have conditions that have to be met in order to get the advertised price, and in many cases, customers are unaware of those conditions when they sign up for the plan. This is where our True Price can help.
What we'll cover
Introducing True Price
- True Price is a tool we created to help customers quickly identify plans that could lead to higher-than-expected bills.
- Compare our True Price to the Advertised Price. The plan is straightforward if they’re within 1¢ or less of each other. You get what you see.
- If a more significant gap exists, special conditions may be required to receive the advertised price. Click “Explore Plan Details” to learn more about the plan and see if those special conditions apply to you. This is the best way to avoid higher-than-expected electricity bills.
- Please continue reading to learn more about our True Price…
What is True Price?
- True Price is a tool to help you quickly see which plans have conditions and which do not. An example of a conditional plan would offer a $125 bill credit if you use at least 1000 kilowatt-hours (kWh). In this example, you receive a $125 credit on your bill if you use 1000 kWh or more.
- Electricity billing works by taking your monthly kWh usage and multiplying it by a specific per-kWh price defined in your contract. If it’s a conditional plan, like in the example above, they deduct the credit after your monthly usage charge is calculated, but only if you meet the condition. The price used to calculate your monthly charge doesn’t change; it stays the same. It’s just that you either get the credit applied or not, depending on whether you meet the condition.
- True Price shows the actual price you pay per kilowatt-hour (kWh) of electricity you use, which is the specific per-kWh price the provider uses to calculate your monthly usage charge.
Why is this important?
- The per-kWh price providers use to calculate your monthly usage is generally much higher for a plan with conditions than a plan without.
- The provider’s advertised price is the “average price” you would pay after the credit is applied, which results in a much lower advertised price than the actual price they charge per kWh. The advertised price is accurate, but only if the conditions are met.
- This is important because what if you don’t meet the conditions? For example, what if you use only 900 kWh instead of the 1000 kWh condition needed for the $125 credit? What price do you pay then? True Price is the price you’d pay per kWh.
- Shopping solely on the advertised price could lead to unexpected bill surprises. This is what we want to help you avoid.
How to use True Price
- It’s easy! Simply compare our True Price to the Advertised Price.
- The Advertised Price and True Price should be very close in price, usually within 1¢ ($0.01) of each other. You know you’re looking at a plan with no conditions if they are. You get what you see.
- If they’re not close in price, the plan has special conditions. In that case, you would want to look into those conditions and ensure they apply to your situation.
- The most straightforward plans will have the smallest gap between the Advertised Price and the True Price.
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Why are the Advertised Price and True Price different at all?
- As mentioned, the provider’s advertised price is an average price, which means it takes into account all fees and credits, excluding taxes. Even if there are no special conditions, other fixed fees are charged regardless of usage. Typically, these are between $5 and $15 per month. These monthly fees are accounted for in the provider’s advertised price but not in the True Price. That is why there is a slight variation between the two prices, even for plans without conditions.
- Here’s how the pricing is broken down:
- In this example, the True Price and Fixed Fees remain consistent when calculating the monthly estimates. Providers take the monthly estimate and divide that by the usage. That is how they come up with their advertised prices. You can see how the Fixed Fees impact the advertised price at each usage level.
What would an Electricity Plan with conditions look like?
- In this example, you can see a sizable gap between the Advertised Price and the True Price. This indicates the plan has conditions that need to be met to receive the advertised price.
- The 11.0¢ price represents the average price per kWh you would pay if you met the conditions. But without our True Price, you may not realize special conditions are needed to receive the advertised price.
What to do if you see a plan that may have special conditions?
- This is another easy one! Click “Explore Plan Details” and look in the Advertised Rates section in the bottom left corner. We show you all three advertised prices at 500, 1000, and 2000 kWh and any conditions like Bill Credits or Minimums. This will give you an understanding of the conditions needed to receive the advertised price.
Plan without Conditions
- You can see the prices are very similar and gradually decrease as the usage increases. Also, there are no Bill Credits or Minimums with this plan.
Plan with Conditions
- With this plan, you see a variation in the prices across the different usages. The cause of this is the $125 Bill Credit at 1000 kWh.
- Also, be sure to check the provider’s plan description. This is where you can find additional information about the plan. For Time-of-Use plans, this will show the time of day at which the per-kWh rate changes.
- It’s always best practice to review the plan’s Electricity Facts Label (EFL), especially for plans with conditions. The EFL will provide all the necessary information to determine if the plan is right for you.
Plan with conditions pricing breakdown
- Here, we’ll show you how the condition of a $125 Bill Credit, if usage is over 1000 kWh, affects the monthly estimate and advertised prices.
- Similar to the pricing breakdown we did earlier, the True Price and Fixed Fees remain constant at the different usage levels, but this time, we include the Bill Credit condition that goes with this plan.
- The table shows how the monthly estimate fluctuates at the different usage levels. It goes down and then back up, which aligns with the fluctuation in the advertised price. This is what you can expect in a plan with conditions.
- This isn’t necessarily a bad thing. The key here is to be aware of these pricing details. That way, you can take advantage of the special pricing if it applies to you.
- This plan would be ideal for customers who consistently use between 1000 and 1500 kWh monthly. If you’re unsure of your usage or know your monthly usage is outside that range, you would want to find a plan that better fits your needs.
Are Electricity Plans with special conditions bad?
- No, of course not! Just because a plan has conditions doesn’t mean it’s not a good plan and that it can’t save you money! Again, the key here is that you know the plan has special conditions and that you understand those conditions.
- Knowledge is power! Identifying these plans and their conditions is important if you want to take advantage of their special pricing and avoid higher-than-expected electric bills.
Why did we do this?
- We created True Price because customers deserve fair and transparent electricity prices. Our True Price allows you to navigate the market more confidently and helps you avoid plans that don’t meet your needs, which could result in a higher-than-expected electric bill.
- Knowledge is Power – True Price doesn’t tell you which plan to choose. It empowers you to make informed decisions.
- It does so by:
- • Raising awareness by shining a light on plans with potential conditions that could confuse customers.
- • Promoting transparency with clear and easy-to-understand information about fees and conditions.
- • Enabling informed choices so you can confidently choose plans that best suit your usage and budget.
Test your new knowledge!
- Put what you’ve learned to the test. Check plans in your area and find your next electricity plan that’s perfect for you!
- If you found this helpful and think others could also benefit from reading it, share it!
Disclaimer: True Price is designed to reflect charges directly tied to your electricity usage, calculated based on kilowatt-hours (kWh) recorded by your Utility Supplier and reported to your Electricity Provider. It excludes fixed monthly fees, as well as state and local taxes or fees. While True Price doesn’t encompass these additional fees, they are readily accessible on our plan cards. Investigating these other fees is crucial when assessing an electric plan. True Price does not guarantee a specific price or represent the total average cost per kWh each month. Its purpose is to assist customers in accurately assessing whether they are viewing a plan that could have special conditions.