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.

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.

We have recently been getting a lot of questions pertaining to the Energy Alliance of Pennsylvania as a result of their increased rates over the past few months.  After much research, here is what I have discovered:

The Energy Alliance of Pennsylvania is a licensed retail electric provider that was set up by the Manufacturing and Business Association (MBA) through Fluent Energy as a way to get better electric rates for their members.  In their own words….

“The Association has established the Employers’ Energy Alliance of Pennsylvania, Inc. (EEA-PA), which will act as an energy supplier for its more than 4,700 member companies and organizations operating throughout central and northwest Pennsylvania. By purchasing directly from the electric grid and gas pipeline and eliminating broker commissions and marketing costs, the EEA-PA is able to pass savings directly on to participating members.” (keep a mental note of the words in bold)

The statement sounds good in theory, but many members saw their rates skyrocket to over $0.13 a few months ago when PPL default rates are at $0.10402 and the majority of businesses in the area are able to get low fixed rate offers of $0.085 (35% less than the $0.13 rate).  So what is going on here?

First, upon reviewing the Energy Alliance Electric Service Agreement, the Alliance buys their electricity on a monthly basis from the wholesale market which makes them extremely and completely open to spikes in the market.  When the Alliance charged their customers over $0.13 the wholesale market did see a bump in prices.  However, the jump in wholesale prices should not have caused rates to go up as high as they did.  Here is where things get really interesting….

In the Electric Service Agreement, the part that explains how customers will be charged, it reads:

“Basic Commodity Price: this is a variable price which is comprised of the weighted average PJM Independent System Operator commodity price and other associated costs of goods sold, plus the administrative fee per kWh set forth below, and any applicable taxes and/or agent fees.”

To break that sentence down, the first part (basic commodity price) is the wholesale price of electricity.  The administrative fee per kwh is listed in the contract at $0.0012 which isn’t out of the ordinary.  Applicable taxes are always warranted.  Then comes the kicker, ever so slightly written, “agent fees”.  What exactly is an agent fee?  It is not defined anywhere else in the contract, and to me it seems like it is the very thing the Alliance set out to eliminate in the first place (bold area from above “liminating broker commissions and marketing costs“).

Basically this “agent fee” gives the Energy Alliance the right to tack on whatever commission they would like on a monthly basis, and it is possible that when the members of this alliance payed a rate of $0.13 cents per KWh a few months ago, someone walked away with a nice undeserved bonus.

I would recommend to any business involved in this Energy Alliance to seek out a fixed electric rate that will prevent such spikes to happen in the future.  For a list of electric companies offering fixed rates and their offers, email us or write a comment to this article.

The thing that really gets to me about the Energy Alliance of Pennsylvania is the way they market themselves.  They come off trying to sell the whole “power in numbers” mentality when really their buying structure is not taking advantage of their buying power at all.  Furthermore, there statement of lower rates due to the fact that they will eliminate broker fees, followed up by adding their own agent fees is just plain misleading.  Even the name “Energy Alliance of PA” gives the impression that they are a non-profit when clearly they are as profit seeking as Walmart or McDonalds.

Viridian Energy is a new company, founded in 2009, who offers a variable electric rate to customers in Pennsylvania, Maryland, Connecticut, and New Jersey.

Viridian Energy only offers a variable rate which can be dangerous if you are a customer.  There is really no limit to how high a variable electric rate can go up in any given month, and history shows that eventually the rates will increase drastically.  The main reason for this is the huge dependency that Viridian places on the wholesale market.  When the market behaves, Viridian can offer a rate that is slightly lower that the utility default rates, however when the market spikes they will be forced to pass on the extra costs to their customers.  I recommend finding a fixed electric rate that will lock in a rate for a set period of time.

Viridian Energy markets through “Direct Selling” or multi-level marketing.  They attract independent associates, who are often not well informed on energy prices and markets, to sell Viridian electric rates to their friends and family in hopes that it will cause these customers to stay loyal to them long term.

Viridian’s rates are not attractive.  Lower electric rates, both variable and fixed, can be found by comparing other electric companies’ offers to Viridian’s offers.

Besides the lower rates offered by these other companies, the important thing to note is that these offers are fixed.  Viridian’s offers are variable and can go even higher at any time.  Viridian advertises that they have “no contracts”, but when it comes to buying electricity, it is good to have a contract as it will state the exact rate you will pay assuming that the contract is for a fixed rate.  Without a contract you are truly at the mercy of the electric company.

The time and energy that it takes to compare electric rates can be overwhelming for some.  However, with a little research and education, customers in Texas, Pennsylvania, New Jersey, Maryland, Delaware, and Connecticut can lower the cost of their electric bill by comparing electric rate offers from electricity companies against the electric rates of the local utility.

Electricity customers attempting to compare electric rates should look at a few key elements for every offer:

1. Is the electric rate fixed or variable.  A fixed rate will secure the electric rate for a set period of time as stated in the electricity contract.  Variable electric rates will usually have low introductory offers, but will contain to guarantee as to how high the rate can go.

2. Meter charge.  A large meter fee (anything above $5) can make a rate appear low when really the electric company is just charging you more in another area of the bill.  The average size house uses about 1000 KWh a month.  A rate of $0.09 per KWh will equal a $90 bill.  Adding a $10 meter charge would be the equivalent of adding a whole penny ($0.01) to the rate.  So a $0.09 cent rate with a $10 meter charge is the same as a rate of $0.10.

3. Is any proportion of the energy you buy derived from green energy sources? Some people are only concerned about the price, but if you are interested in helping you environment you can request a portion of your energy to be generated from green energy (usually wind power).  There are 100% wind power electric contracts available, but usually you will be rate that is a little higher.

These are three of the main things to consider when taking the time to compare electric rates.

For a list of pre-screened electric rate offers, visit our ELECTRICITY PRICES section to find low electric rates in your state.

Commercial and residential electricity customers have a number of options when it comes to choosing an electricity company for their supply rate in Pennsylvania.  In areas where the capped rates have already expired, such as PPL and Duquesne Light, there are over 20 electric providers actively offering service.  Choices are more limited in areas where the capped rates have not expired, such as PECO, but are expected to increase rapidly when those capped rates expire on December 31, 2010.

With so many options you might be wondering…..What should I look for in an electricity company?

Obviously the electric price is going to be the most important thing for most people, and that price is measured in a rate per kWh (kilowatt hour) which is the measurement for electricity usage.  For residential customers the Public Utility Commission does a good job of making the providers stay honest forcing them to include all components of the rate (including taxes) so that you can compare offers apples to apples.  However, there are some things the consumer should know:  Is the rate fixed or variable; Is there a meter charge; What is the cancellation fee; Can I reach a representative by phone or is everything done via email.  These are important questions to ask a electricity company when deciding whether or not the savings they are offering are going to be worth it to you.

As of the posting date of this article, the lowest residential fixed and variable rates are:

Current PPL Rates

Current PECO Rates:

The fixed rate will guarantee a residential customer savings over the utility default rate during the term of the agreement.  The variable rate will will not guarantee such savings, however the savings should be available for at least the near future unless unforeseen events occur that can disrupt the energy markets at the wholesale levels such as a natural disaster.  However, customers are not locked into a variable rate for any specific time period, so they can leave if the rate was to get higher than the default rate.

Commercial electricity customers have to worry about the above concerns plus a whole new set of possible traps.  Commercial companies have access to a variety of products and contract concessions that residential customers will not see.  If educated, these business energy consumers can greatly benefit from electric choice, but they need to be careful about traps that companies can insert into the electric contract.

Due to the fact that commercial customers are individually priced with electric providers, the “best price provider” for business electricity is constantly changing and is dependent on the customer’s specific usage demand patterns.  To get the best rate offer, a copy of a business electric bill is needed.

All in all, there are a number of electricity companies in the Pennsylvania market offering beneficial rates and contracts for both residential and commercial electric customers.  The more you understand about the electric competitive market, the more you will benefit.

The purpose of this article is to briefly explain the different type of electric providers in the Pennsylvania PPL electric market.

With the competitive electric market in the PPL utility territory maturing, business and residential customers are starting to become more familiar with some of the 30+ alternative suppliers’ brand names.

With many consumers the idea of electricity choice is still a foreign concept, and difference between providers is minute.  In reality the difference between some electric providers can be vast.  To start, though all electric providers are selling the same end product, electricity, how and who they sell it to will determine if they can be a right fit for you.

I put the providers into three categories:  Level 1 (Bait and Switch), Level 2 (Fixed Rate), Level 3 (Large Business Complex).

Level 1 providers are providers like Viridian and Glacial Energy.  They present an easy and friendly way to switch showing an introductory rate that is less than current default rates.  There rate is a floating rate that can changed at anytime.  Their market is usually small businesses who spend less than $1,000 a month.  They attract a customer who is unwilling to sign a more complex contract that would allow them to lock into a low fixed rate.

Level 2 providers offer customers a true fixed rate that will not fluctuate during the term of the contract.  Their contracts are more complex than that of the Level 1 provider because they are essentially buying the power for the specific customer on the wholesale market in advance.  This is how they are able to offer a fixed rate.  Providers like this include Liberty Power, Con Ed Solutions, and Direct Energy.  Their target markets are businesses that have good credit ratings.

Level 3 providers are usually only willing to service large business customers.  They tailor their rate products and contracts for those customers.  Their contracts are usually the most complex and often the customer will benefit by having a licensed broker represent them in negotiating the contract with the provider on their behalf.  The complexity of the contract is however justified as the provider is making a large investment, by agreeing to buy a large block of energy, for the customer and in doing so can save the customer a lot of money on their energy expenses.  Though not always limited to these type of transactions, some of the providers that are more likely to fall into this class are Suez Energy, UGI Energy Services, and Constellation New Energy.

For more information on specific providers, feel free to leave a comment or send and email.

Glacial Energy is an alternative electric supplier located in nearly every deregulated market in the U.S. including Pennsylvania, New Jersey, Maryland, New York, and Texas.

On the positive side they offer an easy to read contract agreement to customers and generally, like most alternative suppliers, can offer customers on default service savings.

On the negative side, they rarely offer fixed rate contracts or a variable product tied directly to the wholesale electricity market.  Instead, they offer what they call a “Glacial Index” rate.  The Glacial Index rate is essentially a floating rate that has no boundaries as to how high it can go.  Furthermore, they require their customers to lock in for a term of 12 months or more.  With a floating rate product such as this there should be no need to have to commit to a 12 month term agreement.

If you’re a small business looking for savings on your electricity bill and are still on default service, you will most likely save some money by signing with Glacial Energy in the short term, however I would caution that in the long term they can increase your rate at any given time if you are on their Glacial Index product.

More serious consumers should look to compare electric rates and sign a contract with a provider that offers a fixed rate or a floating index rate that is tied directly to the wholesale market in which case you are taking a calculated risk.  The Glacial Index is random risk with Glacial having all of the power to increase the rates at anytime.

Suez Energy Resources is a retail electric provider who is active in Connecticut, Pennsylvania, Delaware, Illinois, Maine, Maryland, Massachusetts, New Jersey, New York, Texas, and Washington DC.  They offer competitive pricing to large commercial and industrial markets in these regions.  Typically they will not price deals that are below 4 million KWh annual usage which usually amounts to a customer spending around $40,000 a month on electricity.  However they do seem to make exceptions for smaller users from time to time.

They offer a variet of products tailored to larger users such as block pricing and heating index rates.  From discussions with large users and brokers, their pricing tends to be competitive.  On the down side, they currently shy away from offering long term contracts.

Maryland is a unique restructured electricity market.  Real options exist for Maryland consumers, and significant savings opportunities are available.  Residential Baltimore Gas & Electric (BGE) customers can reduce their electricity generation bill by 14% by switching to a competitive supplier.  However, only 72,000 out of 5 million people in the state have chosen an alternative supplier.

How has Maryland reached this point in time where so much opportunity exists in a competitive market, yet so few people have participated?

The answer to the question is a combination of bad timing with the market and inpatient government officials.  Maryland, like other states who have deregulated their electricity markets, set capped rates for all of their customers when the restructuring act was passed.  This caused Maryland electric customers to enjoy low rates from 2000-2007 while energy prices were constantly rising.  In 2007, when these capped prices expired, many Maryland residents saw their electric rates shoot up by 50%.  The 50% increase was a result of Maryland Utilities pre-buying their power requirements for default service customers (those customers who did not choose a competitive supplier).  This is where the bad timing came in.  Electricity prices were at an all time high during the 2007-2008 period.  This made it difficult for alternative suppliers to offer competitive rates.

To make things worse, state officials started to call for the state to re-regulate the market stating that deregulation was not working.  Governor O’Malley backed the call for re-regulation which in turn kept electric providers from entering the market.  There is a significant investment required for electric providers to enter a new market or for a new entity to become a licensed retial electric provider.  It doesn’t make sense for a business to enter a trade that is not supported by the local government.

Fast forward to 2010 and Maryland customers are finally starting to see the benefits of electricity deregulation.  The call for re-regulation was shot down, and wholesale electricity rates have come way down from their highs.  In addition, default customers are paying rates that in many cases were established in 2008 during a time of high energy prices.  This is why residents are able to see savings of 14% on their electric bill versus their default price to compare rates.
Current BG&E Competitive Rates (Updated Daily):