Are Energy Communities The Next Big Thing?

You may or may not have heard of an energy community. This is a relatively new concept and a promising one at that. If energy communities are embraced, they just may be a way for consumers to regain some power from the electrical companies.

What is an energy community?

An energy community is collaboration between a group of people, where a representative acts on their behalf in order to get the best price. This service is available for:

• Residential
• Small Businesses
• Commercial

Here is how it works…

When hydro is deregulated, the markets are opened up to a healthy dose of competition. You see, when one particular company can no longer lay claim over the rights to a certain area or locale, other companies are free to offer services to the inhabitants. This means that pricing becomes a crucial selling point.

When you sign up with an energy community, you will be put into a group with similar consumers. The energy community then negotiates a lower rate for the group. You will still be provided service by the provider that you were with and are free to change providers if you wish. Keep in mind however, that provider’s fees for administration and termination are still applicable and are the responsibility of the customer. It has been reported that some customers see as much as 30% savings. The only major difference that you will see, besides pricing of course, is that you will be billed by the community and pay the community. They will then forward on your payment to the provider.

How is the community paid?

The community’s representatives get paid commission from the electrical companies. A typical commission is 3% of the total value of the contract.

Is there anything else?

Depending on the provider that you choose, there may be other programs they offer. For instance, Community Energy in Texas has a program where they retain a small portion of your total savings. At the end of the year, you may cash out and take the money, or you can donate it in order to get a tax write off. The organization mentioned above is licensed to give grants to charities and schools out of the money they collect. If you chose to donate, you can either designate it to the general fund, or specify an organization to which you would like to contribute. This is an easy way to give back to your community.

The other thing to consider is that you will still have the option to choose your billing date. This allows you to control when you will have to pay your bill, so you may set it up at a time that is convenient for you. As with any contract you are entering into, ask questions and read everything before you sign anything.

Energy communities are an emerging niche in Texas due the recent deregulation of hydroelectric services. It is clear that these communities are going to be an excellent option for consumers who want to reduce their cost of living or operational costs of a business. It is very possible that more of these types of groups will be popping up and giving people the opportunity to take total control of their finances.