How do power companies afford to give $55/month credit? (Houston: 2013, apartments)

[misterno]

My brother signed up for this service from Gexa (see attached)

He says he will get $55 credit every month for 6 months regardless how much his bill is

His first bill was $5 after credit.

There are other companies doing this also. What is the reason?

[PinkLadyK]

After 6 months your rate doubles and most people probably don't take steps to change providers, so they pay the higher price for years. Gexa is only out the discount for 6 months.

[tampac66]

Originally Posted by misterno

My brother signed up for this service from Gexa (see attached)

He says he will get $55 credit every month for 6 months regardless how much his bill is

His first bill was $5 after credit.

There are other companies doing this also. What is the reason?

Because he's paying a higher rate per kWh plus a delivery charge and the credit only applies if you use less than 1000 kWh. So, whatever credit you get in the summer you probably pay for in the long run.

If you can consistently use less than 1000 kWh then you'll be doing great... but that's very hard to do in Houston.

[misterno]

This is really stupid

No company would do such a thing

If you live in an apartment like 1 bedroom you will definitely consume less than 1000 kwh/month

so essentially all these small apartments will have free electricity for life

Simple as that

There must be something else

[Tassy001]

Originally Posted by misterno

This is really stupid

No company would do such a thing

If you live in an apartment like 1 bedroom you will definitely consume less than 1000 kwh/month

so essentially all these small apartments will have free electricity for life

Simple as that

There must be something else

Size of the apartment is not all in question, how well the apartment is insulated and condition of appliances and AC unit also will contribute to the electricity usage. .

[misterno]

Originally Posted by Tassy001

Size of the apartment is not all in question, how well the apartment is insulated and condition of appliances and AC unit also will contribute to the electricity usage. .

I lived in an apartment 2 bedroom and it was old run down bad windows for several years in Houston

I never consumed more than 500kwh a month

That means free electricity FOREVER

This is crazy

[Lbjen]

Is this legit? We use a really small amount of power in our home (built 2013, 3,000 sq ft), my last bill was for 566kwh, last summer we only went over 1,000 once.

If I'm understanding correctly, the charge if we do go over 1,001kwh it will still only be 5.5c, and we just wouldn't get the $55 monthly credit?

[misterno]

Originally Posted by Lbjen

Is this legit? We use a really small amount of power in our home (built 2013, 3,000 sq ft), my last bill was for 566kwh, last summer we only went over 1,000 once.

If I'm understanding correctly, the charge if we do go over 1,001kwh it will still only be 5.5c, and we just wouldn't get the $55 monthly credit?

It is legit

Call the phone number in the attachment which is in the first posting. It is Gexa, everyone knows Gexa power

Although it is legit, I am still in a shock

Is this where the competition is going? wow

[misterno]

Originally Posted by PinkLadyK

After 6 months your rate doubles and most people probably don't take steps to change providers, so they pay the higher price for years. Gexa is only out the discount for 6 months.

Just sign up for 6 months then

problem solved

[PinkLadyK]

Originally Posted by misterno

Just sign up for 6 months then

problem solved

If you are diligent (like me) and call to renegotiate, then you, the consumer can save money. You asked why the companies did this, and I told you why. Most people are not diligent and they make money after 6 months.