PECO Energy has announced that their default supply electricity rates will increase on September 1, 2013. The increase will be about a full penny per kilowatt hour higher than the rate that was charged during the summer, resulting in a $10 per month increase for a home that uses 1,000 KWh in a month.

The power rate increase will only occur for those PECO Energy customers who have not shopped for competitive electricity. To date only 31% of PECO residential customers are buying their electricity from a alternative energy supplier, meaning that the rate increase will take place for 69% of customers in southeastern Pennsylvania. The rate increase has presented a savings opportunity for these default paying customers. The increased PECO rates combined with lower competitive electric rates gives customers the chance to save money on their electric bill if they are willing to spend a few minutes shopping for competitive power rates.

Many customers have chosen to lock into long term fixed rate electricity agreements with energy companies that will not only protect themselves from the rate increase that will take effect in September, but also protect them from future potential rate increases. Many energy analysts are forecasting energy prices to increase from now throughout 2014 making now an idea time to lock in low fixed electric rates.

Electricity prices for Chicago customers serviced by ComEd are becoming more competitive as alternative suppliers position themselves for market share in the country’s third most populated city.

Now that Illinois has a full functioning energy choice market, electricity customers living in Chicago are becoming more aware of their options and terms such as their “Price to Compare”. The Price to Compare represents the rate that customers who do no shop for lower competitive energy prices pay for electric supply and transmission.

Starting in October 2011 and going through May 2012, the Price to Compare for ComEd electricity customers will be 7.733 cents per KWh (6.968 Electric Supply + 0.765 Transmission). If you switch electric suppliers, the electric rate that you choose will replace the price to compare rate of 7.733 on the ComEd electric bill. ComEd continues to send the monthly electric bill to their customers as well as control the meter readings and charge for distribution service. The distribution rates remain regulated by the Illinois Commerce Commission.

In order for a competitive electric supplier to offer service they must first be licensed by the Illinois Commerce Commission. Here are some active competitive electric suppliers offering service to ComEd customers with rates below the Price to Compare:

The vast majority of Philadelphia electricity customers are serviced by the utility PECO Energy.  At the beginning of 2011 PECO customers had their electric rates, which had been capped since 1997, lifted.  This launched the beginning of true electric choice in the area.

PECO energy customers have the ability to shop and compare electric rates, which  have been resulting in electric bill savings for thousands of Philadelphia residences and businesses.  Customers can compare competitive electricity rates in Philadelphia against the PECO price to compare.  PECO default rates increased in July, making competitive electric rates even more attractive.

Competitive Philadelphia electricity rates are providing as much as 18% savings versus PECO default rates for residential customers, and between 10-20% savings for business electricity customers.

Below are current PECO Residential Electric Rates

Below are current PECO Business Electric Rates

Energy customers in New Jersey are given a variety of  options when in comes to their energy purchasing decisions.  New Jersey is leading the country in clean energy initiatives with the NJ Clean Energy Program which provides rebates and promotions for consumers looking to purchase energy efficient hardware.  The program also promotes the use of renewable energy sources such as solar and wind and provides financial assistance for consumers and businesses who invest in solar energy systems.

NJ Energy customers have also seen the benefits of an energy choice market where customers are able to shop for competitive electricity and natural gas rates.  Many energy consumers in New Jersey have not used NJ Energy Choice to their advantage because of an unfamiliarity to the program.  Natural gas customers who have not shopped pay a default rate with their utility which is based largely on market price.  In this sense the decision to purchase competitive natural gas is a decision of price protection and certainty; savings versus the default rates cannot be guaranteed because they change on a monthly basis.

On the contrary, utility default electric rates are set for one year at a time, and the default rates for the following year can be estimated within a tight range since a large percentage of that energy is purchased in advance for default rate paying customers.  These buying strategies present opportunities for NJ electricity customers to save money on their electric bills if they find competitive electric rates that are lower than the default rates.  Many electric suppliers in New Jersey are offering electricity prices that will save customers money.  Business customers in particular have big opportunities to save money.  Many small businesses in New Jersey have not chosen a competitive electricity supplier because they do not fully understand their electric bill.

New Jersey electricity customers, both residential and business, can use electric choice information sites to understand energy competition and electricity rate structures so that they can maximize their energy savings.

Small businesses serviced by the utility PPL in central Pennsylvania will see their electric rates increase by 33% on June 1, 2011.  The current default electric rate of 9.766 will increase to 13.028.

Business customers who have participated in the PA electric choice program will not be effected by the electric rate increase.  The higher price is for the price to compare, or the default electric rate given to consumers who have not yet chosen a competitive electric supplier.  Cheap business electric rates are available for PPL customers who have not yet shopped for competitive electricity rates.

PPL Competitive Commercial Electricity Rates

The higher energy prices in the summer are expected to increase electricity shopping in the PPL region.  As of April 1, 56% of small businesses serviced by PPL had not switched suppliers and instead remained on the PPL price to compare electric default rate.  With current saving of 10% and more in the competitive electric market, the increased default rate will present and even bigger energy savings opportunity for businesses who won’t be able to afford to allocate more money on their electric bills.

Electric choice is still a new concept to many consumers.  Many business owners do not fully understand the benefits of choice and would rather stay with PPL, a company who they are familiar with.  The important fact that these commercial energy customers are missing is that PPL, as the local utility, continues to deliver the power to their customers regardless of the electric supplier chosen.  This distinction between electricity supplier and electricity utility (delivery company) has caused confusion to many customers in energy deregulated markets.

Delaware has a deregulated electricity market.  What does this mean?  It means that the local incumbent utility Delmarva, which was once a regulated monopoly controlling all aspects of electricity service – generation, transmission, distribution – is now only in charge of distribution (they are just an electricity delivery company).  The state mandates that they offer all of their customers a generation default rate for those customers who do not choose an alternative supplier.

Even though Delmarva offers a default generation rate, they do not profit off of these charges.  Their only profit is derived from the delivery charges that are still regulated by the state.  Because of this fact, Delmarva not only does not care if their customers choose a competitive electric supplier, but actually support it.  They want all of their customer to purchase their generation electric service from alternative suppliers so that they can focus their attention on the management and reliability of the electric lines and wires in the state.

Customers looking to shop for competitive electric rates can use the Delmarva default rates (Price to Compare) to determine if the offers they receive are worth signing a contract.  Current competitive electricity rates are showing good savings (8-20%) versus the default rates over the last several years.

Delmarva default rates change about every 4 months.  It is important for Delmarva customers to realize that signing a fixed electricity  contract is not only about saving money off of the current default rate, but also about price protection into the future.  It is possible that the future default rates can become lower than the fixed rate that you signed.  However it is possible, and more likely, that they can drastically increase.  Fixed rate contracts are designed to offer customers with budget certainty giving them electric rate protection.

The Atlantic City Electric company, the electricity utility company serving the majority of southern New Jersey, has the highest electric default rates in the country among utilities serving electricity deregulated markets.  Current residents serviced by Atlantic City Electric who have not chosen a competitive electric supplier for the supply portion of their energy usage, are paying the Atlantic City Electric price to compare rate of 13.15 cents per kilowatt hour.

Customers can save 13% by paying a fixed rate of 11.40 cents per kilowatt hour.  The offer also includes a Visa Prepaid Gift Card.

Despite the large savings available for Atlantic City Electric residential customers, well under 10% of them have switched electric suppliers to companies offering lower electric rates.  Much of the resistence is centered around the unfamiliarity that New Jersyans have with electricity choice.  Most people might be surprised to find out that the Atlantic City Electric company supports energy choice and wants their customers to shop for lower rates. Those who switch electric suppliers will still receive their electric bill from Atlantic City Electric.  The only thing that changes is the Atlantic City Electric price to compare rate, or default rate, is replaced by the rate offered by the electric supplier of the customer’s choice.

Here are current competitive electric rates:

Residential electricity customers of the New Jersey utility company Jersey Central Power & Light (JCP&L) are receiving competitive offers for the first time.

Though JCP&L has had a deregulated retail energy market for several years, electricity companies were slow to enter the market due to low JCP&L electric default rates.  JCPL sets their default rates for their roughly 972,000 electric residential customers by holding an auction the previous year.  Between 2004 and 2008 energy prices were in a consistent upswing.  This made it difficult for competitive electric companies to offer discounted rates as they were always buying in a market where the price was higher than the default rates established in previous months.

With a general downturn in electricity prices in 2010, competitive electric companies are finally able to offer residential customers attractive electricity offers.

As competition has increased in the JCPL market some electricity companies have focused their marketing efforts on promotions and sign-up bonuses.

Fixed rate offers for terms as little as 4 months and as high as 24 months with a $75 gift card can be found here.

Variable month to month rates with a $50 cashback bonus can be found here.

Fixed electric rates will protect customers from JCPL electric rate increases that are expected to occur on June 1, 2011.

Peco energy customers are preparing for electricity choice. On January 1, 2011 capped electric rates for all Peco electricity customers (residential, commercial, and industrial) will expire and a true competitive electric market will take shape.

The restructuring is the result of Pennsylvania’s Electric Choice Act of 1996, which forced traditional utilities to divest their power plants and become merely regulated distributors of electricity over their wires. Peco customers have seen their rates stay at constant rates since 1998. When those rates expire at the start of the new year, some customers will see there electric rates on their utility bills increase. To offset the increases and even save more than current prices, Peco customers are encouraged to shop for lower electric rates.

Peco energy makes money from a regulated distribution fee, not from generating the power itself. They are mandated by the state to provide default electric rates for those electricity customers who are slow to shop the competitive market.

One of the biggest misunderstandings is that Peco will be upset with their customers if they choose a lower cost electric supplier. This is a false belief. Peco energy is not in the business of providing electric generation rates and are unable to do so based on the Pennsylvania’s Electric Choice Act of 1996. Peco Energy is actually encouraging their customers to shop for lower electric rates.

If you are living in Texas and have noticed in recent months that your monthly electric bill has become higher, it may be time to start looking for a new electricity contract.  The reason for the recent upswing in your electricity bill may very well be due to the fact that your old electricity rate contract has expired.

The Texas electricity market is the most active deregulated electric market in the country.  However, what many Texas electric rate payers do not understand is what happens in many cases to their rates when their electric contract expires.

Usually a person will sign a fixed rate electric contract for a set term, for example twelve months.  When the contract expires, the electricity company chosen by the customer will continue to service the customer usually on a marked up rate.  The longer you go without signing a new contract, the greater the chance your rate will continue to rise.

Electricity customers have thousands of “rolling customers” on their books.   Rolling customers are customers who have expired contracts.  The electricity company continues to serve the customer but instead of charging a fixed rate, they are able to charge almost anything they want, as stipulated in the original contract.  At the point it become a game of economics for the electricity company.  They try to determine what the maximum rate is that they can get away charging you before you will look for a new competitive rate.

Right now electricity rates are very low.  If you are paying over 10 cents per kilowatt hour you should look into securing a lower fixed rate.  Champion Energy is offering low fixed electric rates below 9 cents for customers in Texas.

Recently, we helped customers who were previously with TXU get off of rates as high as 15 cents transferred onto fixed rates of 8.6 cents, a 43 percent savings; all because the customers had gotten “comfortable” with TXU who raised their rates over time to well above the current competitive electric rates.