Hidden Fees with Electricity and Gas Utilities
Connection or Reconnection Fees
Explanation
If you are setting up service for the first time, or if your utility service has been disconnected due to non-payment, many electricity or gas providers charge a connection or reconnection fee. These fees typically range from $20 to $100, depending on the provider and whether the technician needs to visit your property.
Probability to Save
MediumWhy and How
If you’re setting up service, you can sometimes avoid this fee by opting for self-installation (where available). If reconnecting, inquire about payment arrangements or waivers if you’ve been a long-term customer or if the disconnection was due to circumstances outside of your control (like an error). Some states also have consumer protection laws limiting such fees.
Late Payment Fees
Explanation
If you miss your payment due date, many utility providers charge a late payment fee. This fee can range from $5 to $25, and some providers also suspend or restrict service after a certain period of non-payment, adding additional charges.
Probability to Save
MediumWhy and How
To avoid late fees, set up automatic payments or set payment reminders to stay on track. If you’re charged a late fee, you may be able to get it waived by contacting customer service, especially if you have a history of timely payments. Providers may offer a grace period during certain months or offer to spread payments across a longer term to help reduce the burden.
Security Deposits
Explanation
Some utility companies require a security deposit when you first open an account, especially if you have a poor credit history. This deposit can range from $50 to $300 depending on your credit score and the utility company’s policies.
Probability to Save
LowWhy and How
Security deposits are often non-negotiable for new accounts with bad credit, but you can inquire whether the deposit is refundable after a certain number of on-time payments. Some providers offer to apply the deposit to your account after a year of good payment history, or reduce the deposit amount for long-term customers.
Service Fees for Paper Bills
Explanation
Some electricity or gas providers charge an extra fee if you receive a paper bill instead of an electronic bill. These fees are usually around $1 to $5 per month and can add up over time.
Probability to Save
HighWhy and How
To avoid this fee, switch to paperless billing by registering for email statements or setting up automatic payments. Many utilities offer small discounts or incentives for customers who opt into electronic billing.
Disconnection Fees
Explanation
If you fail to pay your bill on time, utility companies may disconnect your electricity or gas service, charging a disconnection fee. These fees can be substantial, ranging from $30 to $150, depending on the provider and location.
Probability to Save
Low to MediumWhy and How
Disconnection fees are difficult to avoid, but they can be reduced or waived in some cases, especially if you call before the disconnection and request a payment plan or extension. If service is disconnected, contact the provider immediately to arrange for prompt reconnection and ask if any of the fee can be waived due to financial hardship.
High Usage Surcharges
Explanation
Some utility providers impose a surcharge or additional charge if you exceed certain usage thresholds during peak periods (e.g., summer for electricity). This surcharge can range from $0.05 to $0.20 per kWh (kilowatt-hour), which can significantly increase your bill.
Probability to Save
MediumWhy and How
To avoid high usage surcharges, monitor your electricity or gas consumption and try to reduce usage during peak times, like running the air conditioner less during the summer or using high-energy appliances during off-peak hours. Some utilities also offer budget plans that average your usage over the year to prevent bill spikes during certain months. If you frequently exceed your limit, ask if the surcharge can be waived, particularly if you're willing to reduce your usage.
Regulatory Fees and Taxes
Explanation
In addition to your basic usage charges, utilities often include regulatory fees or taxes that can be difficult to identify on your bill. These may include things like environmental charges, renewable energy surcharges, or state/local utility taxes. These fees vary widely by region but typically account for 1% to 5% of your total bill.
Probability to Save
LowWhy and How
Regulatory fees are typically non-negotiable and set by local or state governments. However, you can inquire about the specific breakdown of these fees and determine whether any exemptions or reductions apply in your area. Some states offer low-income assistance programs or energy credits that can offset these fees.
Early Termination Fees (ETF) for Fixed-Term Contracts
Explanation
If you're on a fixed-term contract (for example, a one-year plan) and decide to switch providers before the contract ends, you may incur an early termination fee (ETF). This can range from $50 to $200, depending on the terms of the contract.
Probability to Save
LowWhy and How
Early termination fees are typically non-negotiable. However, if you want to cancel a contract without paying the ETF, some providers may allow you to transfer the contract to another person, or you may be able to negotiate a reduced fee if you’re willing to accept a shorter-term contract or switch to a different plan.
Third-Party Fees for Payment Methods
Explanation
Many utilities charge a third-party payment processing fee if you pay your bill via credit card or use a third-party payment service like PayPal. These fees can range from $2 to $5 per transaction.
Probability to Save
HighWhy and How
To avoid these fees, use direct debit, bank transfers, or other no-fee payment methods directly with the utility provider. If credit card payments are the only option, some utilities offer discounted or waived fees for signing up for automatic payments or for using certain payment methods, such as debit cards.
Energy Efficiency Fees
Explanation
Some utility companies charge an energy efficiency fee as part of their service to help fund energy-saving programs, renewable energy development, and sustainability efforts. This fee can range from $2 to $10 per month, depending on the provider.
Probability to Save
LowWhy and How
These fees are often mandatory and contribute to public energy-saving efforts, so they are usually non-negotiable. However, you can inquire whether you're eligible for any discounts or rebates for using energy-efficient appliances or reducing consumption. In some cases, you may be able to offset this fee through green energy programs or rebates offered by your utility.
Seasonal Charges
Explanation
Some utilities charge additional fees during high-demand seasons, such as summer or winter, when heating or cooling demands are higher. These fees are meant to cover the increased operational costs but can add an additional $5 to $25 per month to your bill.
Probability to Save
MediumWhy and How
To save on seasonal charges, you can monitor your usage and adjust your thermostat settings to conserve energy. You may also consider enrolling in a budget plan where fees are averaged across the year, helping to avoid large spikes in certain months. Additionally, some utilities offer special seasonal discounts or rebates if you participate in energy-saving programs.