Commercial Electricity

Businesses in Philadelphia and the surrounding areas have the ability to substantially lower their electricity bills if they take the time to shop for competitive commercial electricity rates. The electricity savings are available as a result of a recent rate hike from PECO Energy at the same time that the competitive business electricity market is pushing prices down.

On December 1, 2013 the General Service PECO price to compare rate surged to $0.1016 per KWh. Meanwhile competitive commercial electric prices are well below $0.09 per KWh. The PECO General Service rate is the default electricity rate charged to small businesses who are not purchasing their power from a competitive electricity company.

The rate hike will go into effect for Philadelphia electricity business customers who have not entered into an electricity contract with a competitive supplier. Companies who have previously switched electric suppliers and who are on contract will see no change on their PECO electric bill. To date 50% of all PECO commercial customers are buying their power from a competitive supplier. The 50% who have not taken the time to learn about Pennsylvania business electricity choice are paying more than 25% for electricity generation and transmission service than is necessary. Companies offering low Philadelphia commercial electricity rates are available for these default rate payers to shop and lower their electric bills.

Business owners and decision makers who receive their electric bill from PECO can use the energy price matrix below to shop for competitive commercial electric rates that will provide savings versus the PECO price to compare. Select “PECO” in the Utility box and then select your average monthly electric bill amount to see specific rates for your rate class.

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The Met-Ed electricity default rates will increase for all rate classes across the board, including those for small and large businesses, starting December 1st. The new Met-Ed default rate for a business customers will go up to $0.09133/kWh. This will be an increase of 12% for companies who are still using Met-Ed as their default electric supplier. Businesses in the Met-Ed territory who are still on default service can expect to see the increase reflected on their first Met-Ed electric bill received in 2013.

Pennsylvania competitive electricity commercial rates are substantially lower than Met-Ed’s default rate. Commercial customers in Pennsylvania looking to switch to a competitive electricity supplier can expect to save 20-35% based on current market conditions. If a business looking to lower their costs decides to lock in a rate with a competitive electricity supplier they will still only receive one electric bill from Met-Ed.

With January and February expected to be cooler than last year, the demand for energy will go up which is sure to put more upward pressure on commercial electricity rates. Pennsylvania businesses looking to get off the Met-Ed default rate should consider locking in a rate before the holiday season swings into full gear.

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In discussing the best time to lock in fixed business electricity rate contracts, there is a wide misconception that fixed electricity rates go down during the fall and spring season of the year. While recent historical data may lead one to believe this may be the case, following this to an end in itself is a fallacy and can cost businesses money as they sit around and wait for prices to potentially fall.

Fixed electricity pricing is based on future forward contracts. With natural gas being a significant source of electricity generation in Pennsylvania, fixed rates are highly correlated with natural gas future contracts. This means that when you look to lock in a two year fixed electricity price, the forward natural gas prices for the next 24 months have an effect on the final fixed price for power. Every month included in the duration of the contract will have a set rate the moment the contract is signed. The final fixed price will be the weighted average of the estimated amount of electricity a business is expected to use for a given month times the rate. This means if a Pennsylvania business customer decides to lock in a fixed commercial electricity rate in the middle of summer the price will take into account the cooler months that come along with the fall and spring seasons.

Locking in a fixed rate will protect Pennsylvania business customers from the volatility associated with the energy market. The fixed rate will put a ceiling on the price if the market were to rise during the term of the contract. If the market were to drop you are not necessarily stuck with having to pay a higher rate. More and more electricity suppliers are offering the blend and extend option in Pennsylvania. This allows a business electricity customer on a fixed rate product to immediately lower their rate at any point during the term of the contract in return of extending out the contract. Exercising this option will maximize the savings for the initial term of the agreement while extending out protection against the risk of a potential rise in future energy prices.

Fixed rates are the most common rate structure for those looking to get off PPL, Met-Ed, or PECO’s high default rates. One appealing feature of fixed rates is the transparency in allowing a company to forecast their annual electricity expenditures. Those businesses still on the utility default rate will have to deal with large swings in costs when the electric bill comes due. Budget certainty is a great asset to have when dealing with a volatile market. With the blend and extend option in place, Pennsylvania business customers looking to sign a fixed rate may want to consider locking in a term for several years.

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Electric rates in Texas are down to levels that have not been seen since 2002 when the electricity market first became deregulated.  The downward trend in electricity prices has been a result of falling natural gas prices throughout 2010.

Both residential and commercial electric customers are benefiting from the lower electric rates.  Residential customers are signing fixed electric rates in the $0.08 – $0.09 cents per KWh range, where previously they had been as high as $0.17.  If you haven’t checked your electric bill rate in awhile, now would be a good time.  Often if you remain with a provider for a long time without signing a contract, they will gradually raise the rate even if the market does not dictate that to happen.  Your bill should clearly state the rate (cents per KWh) that you are paying.  If the rate is above 9 cents and you are not in a contract, shop for a lower fixed electric rate.

Commercial electricity customers are seeing rates below $0.05 per KWh.  This is a huge drop off from where the electricity market was just two years ago when in was not abnormal to sign a fixed electricity contract above $0.09 per KWh.  The lower electric business rates have allowed many businesses to drastically cut down on their energy costs.

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Compare Houston Electric Companies

September 8, 2010

Electricity prices in Houston and its surrounding cities have dropped to low levels.  When Houston residences compare electric companies they can find fixed electric rates under 10 cents per kilowatt hour for up to twelve months or even lower electric rates for shorter terms. Houston commercial electric rates are in the six cent per kilowatt […]

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Find Lower JCPL Electric Rates

August 13, 2010

Jersey Central Power and Light (JCPL) electricity customers are seeing some of the lowest electric rates since the utility deregulated back in 2003. The basic generation service, the JCPL default rate, will be $0.110285 per kilowatt hour from October 1, 2010 through May 31, 2011 for small and medium businesses.  From now through the end […]

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Kilowatt Hour Cost Increases for Large Commercial PPL Customers

August 5, 2010

Large commercial and industrial electricity customers in PPL who are on a variable rate will see an increase on their electric bills in August due to an increase in their kilowatt hour cost.  Many PPL (Pennsylvania Power and Light) commercial customers who are on default service and are under the PPL rate class of MP, […]

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Compare Electricity Companies in Pennsylvania

August 4, 2010

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 […]

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PPL Commercial Rates

February 10, 2010

PPL Commercial Rates Now that we are past a full month into the new year, PPL commercial customers are getting a first look at their new high PPL default rates which are 18-36% higher than what they were in December 2009.  The reason for this sudden increase is due to the fact that decade long […]

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Lowest Electric Rates for Connecticut Utilities

December 17, 2009

Business Customers being served by one of the Connecticut Utilities (CPL, UI) are given many options now that the Connecticut electricity market has been fully deregulated.  Most offers that come from certified retail electric providers involve a certain fixed price per KWh set for a certain term. Another option that exists for businesses is a […]

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