Posts Tagged ‘austinenergy’

Austin Energy – I Love it when companies make up words

I got my latest bill from Austin Energy the other day, and read the enclosed newsletter, PowerPlus(TM) as normal.

I was amused to see the heading “Levelized Billing” – Now, I know that readers here will sort of understand what this means. If you don’t I’d suggest googling it, there is just one dictionary that defines it, The Business Dictionary, and the second result is, surprise, surprise Austin Energy.

Companies mostly make up works to obfuscate, to hide something. They rarely make up words to make things clearer and more obvious.

Just for clarity, what it really mean is that you are depositing money in Austin Energy’s account, in advance. They provide you with an estimate of what it’s going to cost you for energy for the next year, based on any projected price hikes and they then divide the total by 12-months and you pay that much each month.

So, you’ll be giving them an interest free loan every month, they’ll have the money in the bank before you use the energy and at the end of the year, if they’ve screwed up on the estimate, the price hike or otherwise, they’ll pay the surplus back to you without interest, or you owe them the difference. It’s a power industry-wide scam.

This is a standard (bad) practice in the UK, especially with companies like British Gas. What they do is over estimate your usage, which puts your monthly upfront payments up. They over estimate their price hikes, whichl puts your upfront payment up even more; and then at the end of the year, they suggest that your balance really isn’t significant and it will be consumed by next years estimate, so you should leave it with them to offset your year+1 costs.

Multiply that by 20,000, 50,000 customers and bingo, the residents of Austin become one of the largest loan companies to Austin Energy on the basis you are giving money for energy you have not yet used.

Now, since Austin Energy is community owned, that may not be a bad thing. Afterall, one assumes with all these upfront loans from residents they should be able to reduce they amount they borrow at commercial banking rates and pass this cost saving onto its customers.

Just so you understand what Levelized means of course.

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