Paying Your Electricity Bill

Everyone pays their bills differently. A lot of us even pay different bills, different ways. It's all about what works for you. However, sometimes the easiest for us may not be the best option for paying a specific bill and can cause more of a headache than it's worth.

When it comes to electricity, most retail electricity providers (REP) offer several options to ensure their customers can pay their bills each month, on time. Unfortunately, some of the options involve several outside factors that can delay receipt.

In this blog, we'll go over the pros and cons of each, but we wanted to touch on something equally important real quick.

Paying your electricity bill on time matters

First, making your payments on time avoids unnecessary late fees. Second, missed or late payments affect future contracts. Poor payment history may trigger future electricity providers to require you to pay a deposit to start service. Additionally, providers basically extend credit to you since electricity isn't paid for until after use. So, when you don't pay in a timely manner, the provider must make adjustments. One adjustment we have noticed is in the grace periods associated with nonpayments. The period of time before providers apply late fees or schedule service disconnections has gotten much shorter in the last 15 years. A direct result of providers getting short-paid or non-paid by some of their customers.

Best and worst ways to pay your electricity bill

Below we've outlined our opinion of the best and worst ways to pay your electricity bill.

BEST WAY: Bank Draft or ACH

It's like a check, but electronic. It's a debit that the retail electricity provider initiates. The payment gets processed relatively quickly, which cuts out a lot of time for error. Generally, this method is the gold standard in terms of making sure your bill gets paid on time. Also, your banking information doesn't change frequently. The main problem with debit and credit cards is they can get lost or stolen, often changing the numbers entirely, or the card expires.

*ACH can take 3-7 business days to take effect once requested, so be sure to monitor your payments at first.

WORST WAY: Online Bill Pay System Through Your Bank

If you send a bill payment through your bank, there's an extra step that has to be taken into account. A check directly from your bank does not come with a scannable payment coupon, which helps your funds get allocated to the right account. So, if someone else sent it or your name's not the same as what's on record with the provider, then someone has to take the time to go through and allocate that out. They got paid, but they don't know what account to allocate it to. There are several uncontrollable factors that can cause late fees or even disconnection fees to be assessed.

Things to consider if you absolutely have to go this route:

• Be aware of your bank's bill pay process, including the time it takes to send out funds. (Electronic payments can take varying times to process, based on both your bank and the provider's systems.)
• Be aware of the provider's process. Each provider is different. Some have up to a 10-15 day turn around when using this payment option. 
• Give yourself a minimum of 5-7 business days before the due date to make sure payment is received on time. (Even if it hits the provider's lockbox before the due date, it still has to be applied.)
• Electronic payments can be set up in a matter of minutes. But stopping them can be much more difficult. Check with your bank on how best to do this.
• We also recommend receiving your bills via email so you won't also have the delay in receiving the bill by mail.
• Take holidays into consideration.

Other payment options:

The rest fall somewhere in the middle. Again, everyone has different reasons for the way they choose to pay certain bills and that's ok. But, our job is to make your life easier!  

Credit Card

• Faster than sending a check
• Great way to build your credit when used correctly
• More secure than cash or debit
• Reward Points
• Funds can take a few days to process
• Interest charges
• Annual fees
• Easier to overspend
• Have to update accounts if the card is lost, stolen, or expired

*Most electricity providers do not accept American Express. The most commonly accepted credit cards are Visa or Mastercard.

Debit Card

• Faster than sending a check
• Almost every merchant accepts debit cards
• You can only spend what you have
• Funds can take a few days to process
• Harder to dispute charges than with a credit card
• Does not improve your credit score
• No reward points
• Have to update accounts if the card is lost, stolen, or expired

Paper Check

• Can be processed and matched to your account with the payment stub
• Able to stop payment before processing if necessary
• Track your spending in a checkbook register
• Postal delays
• Longer processing time: causes delays and possible late fees 
• The most risk for fraud and identity theft if intercepted

What about security?

We understand the concern of having someone's database hacked and someone getting access to your information. We see it in the news every year. But in the end, although it's a pain in the rear end, it's so much easier to just have your bank issue a new debit or credit card and move on down the road. There are entire departments in most of these banks that deal with credit card and debit card fraud. If you're watching what you have going on, then that's not really going to be an issue. Fortunately, most providers house their credit card payment information inside a secure portal with their merchant vendor. Additionally, there are regulations and standards that have to be met. In the state of Texas, all of these entities are subject to regulatory oversight by the PUCT (Public Utility Commission of Texas). And, if they're not being diligent with the customer's information, there's recourse. Generally speaking, none of us are 100% safe from fraud. It's unfortunate that services like PayPal or Apple Pay don't work for utility purposes. The problem is the processing fees tend to be very, very high. Where it might work in other retail businesses where a payment processor can charge 5%, in retail electricity, there are already very thin margins for most of these companies. Hopefully, as time goes on, more of these new ways to pay will become options.  

Energy Ogre is on your side.

The protection of our members and their personal information is extremely important to us. We don't just help you purchase electricity and call it a day. We manage every aspect of your account. If you need our help, just let us know. We can help track down information of what was provided when it was provided, how it was provided, and assist with any kind of fraud investigations if necessary. To date, we are not aware of there ever being an issue amongst any of the providers in the marketplace. The consequences are just too heavy. No matter how you choose to pay, just make sure you understand the process. Know how long you have from when your bill is generated until when it is due. (Generally, this is about 30 days.) As long as you take into consideration processing time and your funds reach your account by the due date, then you're all set! Have questions? Feel free to call us. We are here for you!

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