Business Electric Contracts

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.