Commercial and residential electricity customers have a number of options when it comes to choosing an electricity company for their supply rate in Pennsylvania. In areas where the capped rates have already expired, such as PPL and Duquesne Light, there are over 20 electric providers actively offering service. Choices are more limited in areas where the capped rates have not expired, such as PECO, but are expected to increase rapidly when those capped rates expire on December 31, 2010.
With so many options you might be wondering…..What should I look for in an electricity company?
Obviously the price is going to be the most important thing for most people, and that price is measured in a rate per kWh (kilowatt hour) which is the measurement for electricity usage. For residential customers the Public Utility Commission does a good job of making the providers stay honest forcing them to include all components of the rate (including taxes) so that you can compare offers apples to apples. However, there are some things the consumer should know: Is the rate fixed or variable; Is there a meter charge; What is the cancellation fee; Can I reach a representative by phone or is everything done via email. These are important questions to ask a electricity company when deciding whether or not the savings they are offering are going to be worth it to you.
As of the posting date of this article, the lowest residential fixed rate is being offered by Champion Energy, and the lowest variable rate is being offered by Verde Energy. The fixed rate will guarantee a residential customer savings over the utility default rate during the term of the agreement. The variable rate will will not guarantee such savings, however the savings should be available for at least the near future unless unforeseen events occur that can disrupt the energy markets at the wholesale levels such as a natural disaster. However, customers are not locked into a variable rate for any specific time period, so they can leave if the rate was to get higher than the default rate.
Commercial electricity customers have to worry about the above concerns plus a whole new set of possible traps. Commercial companies have access to a variety of products and contract concessions that residential customers will not see. If educated, these business energy consumers can greatly benefit from electric choice, but they need to be careful about traps that companies can insert into the electric contract.
Due to the fact that commercial customers are individually priced with electric providers, the “best price provider” for business electricity is constantly changing and is dependent on the customer’s specific usage demand patterns. To get the best rate offer, a copy of a business electric bill is needed.
All in all, there are a number of electricity companies in the Pennsylvania market offering beneficial rates and contracts for both residential and commercial electric customers. The more you understand about the electric competitive market, the more you will benefit.
The purpose of this article is to briefly explain the different type of electric providers in the Pennsylvania PPL electric market.
With the competitive electric market in the PPL utility territory maturing, business and residential customers are starting to become more familiar with some of the 30+ alternative suppliers’ brand names.
With many consumers the idea of electricity choice is still a foreign concept, and difference between providers is minute. In reality the difference between some electric providers can be vast. To start, though all electric providers are selling the same end product, electricity, how and who they sell it to will determine if they can be a right fit for you.
I put the providers into three categories: Level 1 (Bait and Switch), Level 2 (Fixed Rate), Level 3 (Large Business Complex).
Level 1 providers are providers like Viridian and Glacial Energy. They present an easy and friendly way to switch showing an introductory rate that is less than current default rates. There rate is a floating rate that can changed at anytime. Their market is usually small businesses who spend less than $1,000 a month. They attract a customer who is unwilling to sign a more complex contract that would allow them to lock into a low fixed rate.
Level 2 providers offer customers a true fixed rate that will not fluctuate during the term of the contract. Their contracts are more complex than that of the Level 1 provider because they are essentially buying the power for the specific customer on the wholesale market in advance. This is how they are able to offer a fixed rate. Providers like this include Liberty Power, Con Ed Solutions, and Direct Energy. Their target markets are businesses that have good credit ratings.
Level 3 providers are usually only willing to service large business customers. They tailor their rate products and contracts for those customers. Their contracts are usually the most complex and often the customer will benefit by having a licensed broker represent them in negotiating the contract with the provider on their behalf. The complexity of the contract is however justified as the provider is making a large investment, by agreeing to buy a large block of energy, for the customer and in doing so can save the customer a lot of money on their energy expenses. Though not always limited to these type of transactions, some of the providers that are more likely to fall into this class are Suez Energy, UGI Energy Services, and Constellation New Energy.
For more information on specific providers, feel free to leave a comment or send and email.
Glacial Energy is an alternative electric supplier located in nearly every deregulated market in the U.S.
On the positive side they offer an easy to read contract agreement to customers and generally, like most alternative suppliers, can offer customers on default service savings.
On the negative side, they rarely offer fixed rate contracts or a variable product tied directly to the wholesale electricity market. Instead, they offer what they call a “Glacial Index” rate. The Glacial Index rate is essentially a floating rate that has no boundaries as to how high it can go. Furthermore, they require their customers to lock in for a term of 12 months or more. With a floating rate product such as this there should be no need to have to commit to a 12 month term agreement.
If you’re a small business looking for savings on your electricity bill and are still on default service, you will most likely save some money by signing with Glacial Energy in the short term, however I would caution that in the long term they can increase your rate at any given time if you are on their Glacial Index product.
More serious consumers should look to sign a contract with a provider that offers a fixed rate or a floating index rate that is tied directly to the wholesale market in which case you are taking a calculated risk. The Glacial Index is random risk with Glacial having all of the power to increase the rates at anytime.
Suez Energy Resources is a retail electric provider who is active in Connecticut, Pennsylvania, Delaware, Illinois, Maine, Maryland, Massachusetts, New Jersey, New York, Texas, and Washington DC. They offer competitive pricing to large commercial and industrial markets in these regions. Typically they will not price deals that are below 4 million KWh annual usage which usually amounts to a customer spending around $40,000 a month on electricity. However they do seem to make exceptions for smaller users from time to time.
They offer a variet of products tailored to larger users such as block pricing and heating index rates. From discussions with large users and brokers, their pricing tends to be competitive. On the down side, they currently shy away from offering long term contracts.