New energy choice markets in the northeast (Pennsylvania, New Jersey, Maryland, Connecticut) as well as existing deregulated areas such as Texas and Illnois are making some business electricity companies household names as the battle for market share has heated up.

Electricity companies who offer electric service to commercial and industrial clients buy power commitments in advance for the businesses and then sell it back to them in the form of a monthly electric bill.  Essentially these business electricity companies act as banks for large energy users.  As retail electric suppliers, they buy blocks of power on the wholesale market and then sell it to the customer with a retail markup.  This is why electricity companies require businesses to sign electricity contracts that locks them into service with the supplier for the term of the contract.

However, some of these business electricity contracts can be confusing and misleading to executives who are looking at purchasing energy for the first time.  Some of the misleading practices include “passing through” part of the charge to other sections of the bill,  thus making the rate appear lower than it really is.  Also, electricity companies can add unnecessary meter charges that can add up for businesses that have multiple meters.

It is important for businesses to do their due diligence or work with a energy consulting company who has a clear expertise in the field of deregulated electricity.  Electricity brokering companies can compare electricity contracts, rates, and suppliers.

Businesses should be weary of electricity companies offering variable rates that are contract free.  Usually the offer will not guarantee any type of rate allowing the electricity supplier to charge whatever they want in any given month.

Customers of the Pennsylvania electric utility PECO energy will want to shop and compare electric rates very soon in order to prevent a large energy bill spike this summer.  With gas prices already on the rise and  expected to continue to increase, it is imperative to the personal finance of these energy customers to find lower electricity prices.

For a electricity consumer who uses 1000 KWh a month, the supply portion of the PECO electric bill will increase by more than 10% going from 9.99 cents to over 11 cents starting on July first.  Customers who use more than 1000 KWh will have even higher rates.  PA electric choice is providing savings opportunities for customers, but finding those deals has proved to be difficult for many consumers.

Fortunately, electricity price comparison web sites like www.electricrate.com give PECO energy customers a variety of energy choices with savings and promotions easily identifiable.

Finding a lower electric rate will not take you away from being a PECO energy customer.  PECO energy will continue to serve as your local utility delivering the power to your home or business.  With the Electric Choice Act in effect, PECO no longer is involved in the business of offering competitive generation rates.  They instead only focus on the reliability and maintenance of the power lines and wires.  They are however, mandated by the Public Utility Commission to offer default rates to customers who do not shop for competitive rates.

Electricrate.com provides an easy platform for customers to do energy shopping and compare electric rates being offered to the PECO price to compare default rate.  Current savings of 10-16% are available versus the summer PECO default rates.

Electric bill savings can also be found for Pennsylvania electricity customers who are serviced by the utilities PPL Energy in central Pennsylvania and Duquesne Light in the Pittsburgh area.  As is the case with PECO energy, these energy consumers will remain customers of their respective utility companies no matter which electric supplier they choose.  It is simply about saving money on the electric bill; if you can find a lower rate compared to the default rate then you should switch.

Even after a customer chooses a lower electric rate, they will continue to get their monthly electric bill from their local electricity utility company (PECO, PPL, Duquesne Light).

Electricity rate savings are also available for small businesses throughout the state.  Small business customers of PPL in particular have huge savings potential.  Businesses who have not switched suppliers, and thus are still on the PPL default service, will see their electric bills increase by 15% on June 1 if they do not take action.  If they do shop, they can find savings of about 15% off of current default rates.  If nothing is done the business electric rate will be above 11 cents.  If they shop and compare rates, then they will find competitive electric rates below 8.7 cents.

New Jersey power consumers are finding savings through the state’s electricity choice program.  Electric choice in New Jersey has brought in more than a dozen electric suppliers offering electricity rates to commercial and industrial customers over the last several years.  Now electricity suppliers are starting to offer residential rates in New Jersey.

NJ power shoppers who take the time to compare electricity offers are finding the best deals.  In addition to low electric rates that offer significant savings versus utility default rates, some electric suppliers are offering incentives and promotions to entice customers to switch.  Despite electric bill savings of over 20% in some cases, less than 8% of New Jersey residential electric customers have switched suppliers.

Those who have not switched continue to pay a high default rate with their local electric utility company – PSEG, JCPL, ACE, Rockland.  PSEG and JCPL have been pushing power shopping and choice to their customers to help spread the word.  Though New Jerseyans now have a choice of who supplies their electricity, the power continues to be delivered by the local utility companies.  PSEG, JCPL, Atlantic City Electric, and Rockland Electric do not lose the customer when they switch electric suppliers.  Instead, the utility company continues to bill the customer and charge regulated rates for power delivery.  The only thing that changes is that instead of paying the high default supply rate, the customer pays a competitive supply rate.  If that competitive rate is lower than the default rate, than the customer saves money on their electric bill.

Here are some current low power rates in New Jersey:
PSEG Rates

JCPL Rates

Atlantic City Electric Rates

Residential customers of Rockland Electric in New Jersey can reduce the supply charges on their electric bill by 20% by going here.

Many customers of Rockland Electric, the smallest electricity utility in New Jersey, are unaware of electric choice in the state.  Due to its relatively low number of customers, very few electricity companies are offering competitive rates in the Rockland area.  However, due to recent market changes, the electric suppliers who have entered the market are able to offer low electric rates with that offer significant savings against Rockland Electric default rates.

Rockland Electric is a regulated electricity delivery company who serves customers in northern New Jersey.  They are required by the New Jersey Board of Public Utilities to offer a default generation rate for their customers.  Rockland Electric would prefer that all of their customers choose an alternative generation supplier so that they can focus on the management and reliability of the power lines and wires.

The cheapest electric rate that we were able to find for Rockland Electric customers is 9.7 cents versus the 12.15 default rate, a 20% savings.  The offer also includes a gift card up to a value of $75.

PSE&G electricity customers in New Jersey paying basic generation service rates, the PSE&G default rate, are paying among the highest electric rates in the country.  The basic generation service rates are supply electricity rates that PSE&G charges customers who have not selected and alternative electric generation supplier.  These default rates are based on a series of auctions that PSEG holds for their customers.  Electricity suppliers compete to provide rates for a percentage of the PSEG default customers.

PSE&G passes the supply rates from the electricity companies who win at the auction directly on to customers.  So even when a customer pays the basic generation service default rate, they are still paying money for their supply service to another electric supplier other than PSE&G.

Lower electric rates can be selected by customers who take the time to shop and find their own electricity supplier.  When the auction for default rates takes place electricity suppliers have to take into account that a certain percentage of customers will leave the basic generation service during the year.  For example, if an electric company wins the right to provide default service for 100,000 customers starting in June, they have to put a premium on the price taking into account that there is a probability that 15% of these customers might sign a contract with an alternative electricity supplier who is offering a lower electric rate.

When electricity suppliers market their service and rates to individual customers, they do not have to include a premium since they are pricing for one entity.  This results in lower rates and savings on the PSE&G electric bill.

Here are some current offers and savings for electricity customers in PSE&G:

Centerpoint Energy is the electric delivery company in the Houston metro area.  They are responsible for the management and maintenance of the electric lines and wires, and charge fees that are regulated by the state utility commission and passed through the customer’s electric supplier charge.

The electricity market in Houston is deregulated so residential customers have the power to choose who supplies their electricity.  Many electric rate options exist for Houston energy users including fixed rates, variable rates, long term, short term, and green energy options.

The actual reliability of the power is the responsibility of Centerpoint Energy.  The Texas electricity suppliers are retail electric companies who merely buy the power on the wholesale market and sell it to consumers and retail prices.  If one of these companies were to go out of business and default on their energy requirements, the customers serviced by the defaulting supplier would be transferred onto Centerpoint’s provider of last resort (POLR).  In other words, Centerpoint would continue to deliver power to your home, but the rate would change to a default supplier at a regulated rate.  At this point the customer would still have the power to choose and shop again for competitive electricity pricing.

Residential electricity customer in the Houston area should really focus on finding the lowest electricity rate when shopping for competitive electric suppliers.  Promotional offers found at electricity companies like this that offer free movie tickets and even airplane tickets with time can also weigh into the decision.

Here are some current electricity pricing options in Houston:

PECO energy customers might notice a slight increase on their energy bills this month.   February 2011 will mark the first set of bills that PECO electricity customers receive that include PECO default rates since capped rates were lifted on January 1, 2011.

Many PECO customers are still unaware that they have a choice when it comes to who supplies their electricity, and some of those choices will result in savings on the electric bills.  Though it should be noted that many electric suppliers are offering rates that are higher than current PECO default rates.

Most electric suppliers offering service in the PECO area offer a single billing option.  In other words, if you choose to switch electric suppliers, you will still only receive one electric bill per month from PECO for the delivery and supply of your electricity.  The alternative would be to receive two bills; one from PECO for the electricity delivery, and one from the new electric supplier for supply service.

The single billing option combined with a lower electric rate than the PECO price to compare rate make switching electric suppliers equivalent to getting a rebate from PECO energy.  For example, if you choose a fixed electric rate of 8.9 cents from an alternative electric supplier, you in effect are getting a PECO rebate of 10% off of the current PECO electric supply rate of 9.92 cents.

Below are “PECO Rebate” offers from electricity suppliers who offer single billing.

PSEG electricity customers are finally able to save money on their electricity bills by choosing a lower rate than the default PSEG rates.

In recent years, electricity suppliers had been slow to enter New Jersey electricity market.  Now that the electricity companies are able to offer electric rates that are lower than the  utility basic generation service rates, companies have entered the market and are offering their service to PSEG customers.

To see if money will be saved, customers should look at the “Supply” section on their PSEG bill.  There they will find the electric rates that can be compared to alternative electricity company offers.  Electric savings are currently being offered by as much as 12.4%, but not all offers result in saving, so it is important for customers to compare rates.  Some PSEG bill payers are even choosing to pay more on their electricity bill for the right to buy 100% wind power or other forms of green energy.

Customers who shop for lower power rates might also find promotions that can further sweeten the deal on top of electric bill savings.  PSEG customers will still receive their electric bill from PSEG even after they switch electric suppliers.

The best offers, (lowest rates plus promotions) for fixed and variable electric rates, that we have found are below:

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.

PSEG electricity customers can save money on the supply portion of their electric bill by buying their power from an alternative supplier.  PSEG default electric rates, labeled Basic Generation Service (BGS) by the state of New Jersey, are currently higher than some competitive offers.

The delivery portion of the bill remains regulated and serviced by PSE&G.  Some electric companies offer dual billing in which you receive one bill from PSEG Energy for the delivery portion, and a separate bill for the supply charges from the alternative electricity company.

The more popular choice is to receive single, or consolidated, billing where you get one bill per month from PSEG.  On the PSEG electric bill the delivery charges would remain the same, and the supply charges would be that of the alternative electric supplier who you sign a contract with.

PSE&G posts the total “Price to Compare” at the bottom of the electric bill even after a customer has chosen an alternative electric supplier to provide electricity.  By doing this, a customer can see how much money they are actually saving every month.

PSEG electricity customers on default service will pay $0.11481 per KWh from now until the end of May 2011.  They will then pay about $0.1200 (depending on their total usage) in the summer months of June through September.

PSEG customers can save money by choosing: