The Energy Plus Company has seen tremendous market growth since being founded in 2007. The company’s success is centered around their rewards programs which they built with household name corporations in the airline, hotel, and retail industries. In 2011 the company was bought by NRG, a fortune 500 company who owns several other retail brand energy companies. Energy Plus offers electricity service in New Jersey, Connecticut, Illinois, Maryland, Massachusetts, New York, Ohio, Pennsylvania, and Texas

Energy Plus has built their marketing campaigns around their ongoing rewards programs, similar to credit card reward programs; the more power you use the more rewards you will get. They entice people to sign up for their electric variable rate service, and in return customers can receive their choice from a variety of rewards including cash back, student loan payoff funds, airline mileage, or gift certificates to retail stores.

For customers looking to maximize their savings, the problem with the Energy Plus Company is that they not only charge a variable rate that has no limit to how high it can go, but they don’t even post what the initial variable rate will be when you get your first bill. You might get reward points or cash, but that money is coming from an inflated monthly electricity bill. In the north east markets, where the majority of the Energy Plus Company customers are located, smart shoppers can save a tremendous amount of money on their bills by taking the time to compare low fixed electric rates. In many areas savings are above 20%. For example, Illinois electricity consumers living in the ComEd area can currently save up to 29% versus the local default rates. However, according to customer surveys, the Energy Plus Company charges rates that are close to the utility default rates and sometimes more.

Their contract states:

“The variable rate may change each month and will reflect the cost of electricity, including energy, capacity, settlement, ancillaries, related transmission and distribution charges and other market-related factors; plus all applicable taxes, fees, charges, costs, expenses and margins. The rate may be higher than your EDC’s rate. EP does not guarantee any savings over the EDC’s rates for the entire term of this Agreement”

In conclusion, the Energy Plus Company has a successful marketing program going because their is a market out there of uneducated consumers whose eyes light up when they see the word “REWARDS”. However, in the end these consumers end up paying more money for the rewards they earn then they are worth. Smart electricity shoppers should focus on getting the lowest fixed rate available in their service territory.

Summer electricity rates for PSEG customers on supply default rates have been announced. The PSEG default rates are named Basic Generation Service (BGS) charges by the New Jersey Board of Public Utilities. Customers who do not shop for competitive rates, offered through the New Jersey Electricity Choice and Competition Act, pay the BGS charges. Those customers who do shop for competitive electricity prices can find rates that are significantly lower than the BGS charges resulting in a lower PSEG electric bill. The competitive rates include all charges listed under the “Electricity Supply” section on the PSEG electric bill.

All BGS charges on the PSEG bill include the state SUT tax. The New Jersey Board of Public Utilities requires all competitive electricity companies to include the SUT in their rate offerings to residential customers so that consumers can compare PSEG electricity rates smoothly and accurately, eliminating potential hidden fees that companies might otherwise try to impose.

Starting on June 1, 2012 residential customers paying BGS rates will pay $0.1097 per KWh for their first 600 KWh and $0.119038 for everything in excess of 600 KWh. Most residential properties bigger than a one bedroom apartment will consumer more than 600 KWh. The average BGS customer will pay over $0.1100 on their electric bill this summer. Competitive rates (see below) can reduce the rate per KWh tremendously resulting in a lower PSEG electric bill.

Duquesne Light customers who have not shopped for competitive electricity rates are paying much more for power than they need to. Recently Duquesne Light increased their price to compare rate, the rate customers pay for electricity who have not selected an alternative supplier, from 9.32 cents to 9.89 cents. Meanwhile competitive rates give consumers the ability to pay as little as 6.47 cents which is 35% less than the current default rate.

The amount of money electricity consumers can save in the Duquesne Light area is among the highest in competitive energy markets in the country. Word of the potential to save on electric bills is getting around in the Pittsburgh area as 38% of residential customers have switched electric suppliers in order to get off of the high Duquesne Light default rate. Duquesne Light serves around 500,000 residential customers in the Pittsburgh and surrounding areas.

The Duquesne Light customers who are still paying the default price to compare often have a misunderstanding of how Pennsylvania electricity choice has been set up as well as a lack of trust in the alternative energy companies offering rates. These consumers should understand that switching electricity suppliers will not end their relationship with Duquesne Light. Duquesne Light will continue to deliver power to their customers no matter which electric supplier is selected to provide power. In addition, Duquesne Light also continues to send the monthly power bill and respond to power failure and emergencies.

The Duquesne Light price to compare is determine by an auction process where competitive energy companies bid for the right to service default paying customers. These companies have submitted bids with a premium on the pricing since at any time default customers can leave the default rate and sign a contract with an alternative energy company offering a lower electric rate. Duquesne Light collects the money for the default rates and passes it through to the energy companies who have won the previously held auctions. Duquesne Light does not care if their customers switch electric suppliers because their revenues and profit margins are derived from the delivery charges found on the Duquesne Light electric bill.

The delivery charge remain regulated by the state of Pennsylvania. Often consumers fear that if they switch to a lower electric rate than Duquesne Light will “make up the difference” by increasing their delivery charges. This could not happen since the delivery rates are approved at the state level for the entire class of residential customers. Furthermore, as noted above, Duquesne Light does not profit from the price to compare default rate that they charge, so it does not hurt them when a customer switches to a competitive electricity company.