How do I Lower My Electric Bill

States that have decided to deregulate, or restructure, their electricity utilities are giving their consumers the opportunity to lower their electric bills.  Misunderstanding how to lower the electric bill has been a problem for some of these electric rate payers.

As a simple review, the electric bill is divided into two main sections; the delivery (lines and wires) section and the retail supply section.  The delivery section is the portion of the bill, usually between 20-30% of the total charge, that is paid to the utility company for delivering the power through the lines and wires.  These charges are still regulated by the state.

The energy charge, also called supply charge, makes up the majority of the bill and is the section that has been deregulated.  It is here where customers can lower their electric bill by finding an alternative electric company that will supply electric power at a lower price per kilowatt hour than the current default electric rate that the incumbent utility offers.

Most default rates are set for a specific period of time.  You can lower your electric bill by finding out how long the default rate will be at a certain amount per kilowatt hour and then finding an alternative provider who will offer a lower electric rate for that period.  For example, the default rate for customers who are served by the utility PPL in Pennsylvania is $0.10402 per kilowatt hour for the entire year of 2010.  Locking in a fixed rate of $0.09 per kilowatt for any period in 2010 will give the customer a lower electric bill by 13.5% off of the energy supply portion of the bill.  It might be wise to lock in a low electric rate for a period that goes beyond the expiration of the current default rate if you think energy prices are headed up.

States where you can currently lower your electric bill against the utility default rate include Pennsylvania, Connecticut, New Jersey, Maryland and Delaware.  There are also saving available in Texas if you have not shopped the competitive electric market within the past two years.

Share

{ 3 comments… read them below or add one }

MARGARET M. ROOT August 12, 2010 at 8:18 am

WANT TO LOWER ELECTRIC BILL. HEARD ABOUT VIRIDIAN THROUGH THE BOYS & GIRLS CLUB IN ANSONIA, CT

WOULD APPRECIATE SUGGESTIONS.

MARGARET ROOT, 31 LAUREL AVENUE, DERBY, CT 06418

I LOVE ALONE AND MY LAST U.I. BILL WAS $250.00. Ususally around $125.00 – $150.00 U.I.

ElectricityWatch Team August 12, 2010 at 2:29 pm

Look at are Electricity Prices Section to find the lowest electric rates in your state.

Currently MX Energy is offering the lowest fixed rate in the UI territory while Positive Power is offering the lowest variable (no contract) rate. The fixed rate will guarantee the rate for 12 months.

Makarska October 1, 2010 at 4:42 pm

Thanks for this great post. The info I have gained from your blog is truly encouraging

Previous post:

Next post: