While most of the marketing efforts of competitive electricity suppliers have been focused on the territories controlled by PECO Energy and PPL Energy, customers of Duquesne Light are finding the largest savings against their utility price to compare default rates.
Duquesne Light customers, who currently have a supply default rate of 8.89 cents, can currently lock in a 24 month rate as low as 7.19 cents which will yield a savings of 19% on the electric bill. While customers new to electricity choice might be hesitant to lock in a rate for two years, it is important for them to understand the benefits of long term fixed electric contracts. The fixed electric contract will save customers money right away and protect them from potential default rate increases in the summer and in 2012. Electricity customers can also lock in for a shorter term at 12 months at a low rate of 7.55 cents resulting in a healthy 15% electric bill savings.
PECO electricity savings and promotions are expanding in the Philadelphia area as suppliers compete for market share. The PECO territory saw electric price caps expire on January 1 which has opened the door for alternative electric suppliers to offer rates to PECO default rate payers.
Duquesne Light saw their rate caps expire several years ago. However electric suppliers were slow to enter the market due to the low default price to compare rates that the utility was offering their customers as a result of an auction they held among wholesale energy suppliers. Now that those default rates are higher than what retail electric suppliers can offer, electricity companies have started to offer service to customers as they can now offer lower electric rates and electric bill savings. Customers who switch electric suppliers will still receive their monthly electric bill from Duquesne Light. The only difference will be the lower electricity rate on the bill.
Current Duquesne Light competitive offers:
As electricity deregulation markets have matured around the country over the last several years, electric suppliers have gotten tricky on how they present their offers on contracts. In short, the energy supply charge should include several components including the energy commodity, capacity, line losses, ancillary charges, and sometimes transmission charges depending on your specific market. Many suppliers will show a rate that just includes the energy commodity charge, and then pass on the extra charges through another category on the bill.
Why do they do this?
Simply put, they do this to make their rate look lower than their competitors. For example, one supplier might give a rate that includes everything for 7.5 cents. Another supplier might give a rate that just includes energy commodity for 6 cents. At first the 6 cent offer appears to be great. However, when you get the bill you will see a line for the 6 cent charge followed by an additional section that has another 3 cents for all of the addition charges. So in the end, that 6 cents is really 9 cents.
How do they get away with this?
It is all in the electricity contract!
It is extremely important to take the time to review all electricity contract offers to ensure that you are getting a true apples to apples comparison.
One of the reasons ElectricityWatch.org was set up was because I went through such a deceitful practice. I signed an electricity contract for a fixed rate of 7 cents when in reality I ended up paying 8-9 cents per month. During this time I could have paid a fixed rate of 6.65 cents.
Though everything is in the contract, many electricity companies have gotten very smart as to how they word their electric contracts so that the consumer overlooks important factors relating to the rate. If you would like us to review your business electric contract, feel free to post a comment with the request and we will contact you to do so.
Keep in mind this is for business electricity customers. Residential customers are protected by their state utility commissions from such practices. Businesses, however, are expected to do their own due diligence.
Texas residential customers who have had their contracts expire could be paying too much on their monthly bills. Nearly every competitive electric provider who offers term contracts has a clause built in that causes customers to stay with the provider after the contract has expired at rates determined by the supplier. The business strategy for the electric providers is that a large enough percentage of their market share will forget to sign a new contract allowing them to up the rates to a premium.
Two summers ago, electric rates in Texas for twice as high as they are today due to higher natural gas prices. Customers who signed fixed electric rate contracts during that time became customed to paying a high electric rate. As these contracts expire, providers continue to charge the high rates hoping that their customers have forgotten that they can now shop for a lower rate.
If it has been awhile since you shopped the electricity competitive market we encourage you to see if your contract has expired. Just because you are still receiving a bill from an electric provider you chose last year does not mean that you are still on contract.
For the lowest Texas residential electric rates today, email us with your city name and ask for rates. As of this week, fixed rates have been found below $0.09 per kwh. Many Reliant and TXU customers are paying over $0.15 per kwh.
