This article pertains to commercial and industrial electricity customers in deregulated markets where Integrys Energy is active, including but not limited to Maryland, New Jersey, Pennsylvania, Connecticut, Delaware, and New York.
Integrys Energy has offered electricity contracts with misleading rate quotes to commercial and industrial customers. If you are deciding to use Integrys Energy as your supplier it is extremely important that you either review the contract thoroughly, or work with a consultant or energy broker who is equipped to do so.
As a business electricity customer, here is what you need to know:
Every deregulated electricity state divides their bill into two basic parts, the regulated delivery part and the competitive supply part. Depending on who is your local regulated utility will depend on how these charges are viewed on your bill. Sometimes, like in the case of PSEG in New Jersey, the two parts are clearly divided. Other times, like in the case of PPL in Pennsylvania, the charges are not so clearly separated.
The competitive supply portion of the bill can further be separated into several components (energy charge, transmission, capacity, line losses, etc.). When you receive a competitive rate offer from an energy supplier, the rate should include every component of the competitive supply portion. However, what some suppliers do is give a quote that only includes a portion, and then passes on the rest of the charges in a subsection on the bill.
So for example, you might get an offer from Electric Supplier (A) for a rate of 8 cents that includes every aspect of the competitive supply part. Then Electric Supplier (B) might offer you a rate of 7 cents that only includes part, say the energy charge, of the competitive supply part. The remaining part of the competitive supply part (transmission, capacity, line losses) will show up on the bill in a different section, and all of a sudden 7 cents is really 9.5 cents.
Integrys Energy practices the method of Electric Supplier (B) from the example above. Recently I reviewed a contract that they presented to a customer. After reviewing the contract I found that the customer would have paid exactly double to what they thought they would have paid. This is because Integrys divided the competive supply part into two sections, and gave both sections the same exact rate. This was extremely misleading as the implementation of the exact rate for two different sections was designed to make it appear as if everything would be charged the single rate once. But after taking a closer look, I was able to see that there would in fact be two separate charges.
To summarize the above paragraph, had the customer signed they would have paid:
6 cents per KWh for (energy commodity)
6 cents per KWH for (capacity, transmission, line losses)
12 cents total
The sales person representing Integrys presented the rate as 6 cents. The customer thought that the 6 cents was a great offer compared to the 8 cents offer they were getting from another legitimate supplier (the 8 cents offer was found to include the entire portion of the competitive supply part). In reality the 8 cents should have been compared to 12 cents, and not 6 cents.
People making electricity decisions for businesses need to be aware of these deceitful practices.
A simple way to do this is to email the sales person and ask them: Does the rate include energy, capacity, transmission, line losses, and all other components of the utility price to compare?
Anything less than a “yes” means that there will be some surprises.