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.

Energy customers in New Jersey are given a variety of  options when in comes to their energy purchasing decisions.  New Jersey is leading the country in clean energy initiatives with the NJ Clean Energy Program which provides rebates and promotions for consumers looking to purchase energy efficient hardware.  The program also promotes the use of renewable energy sources such as solar and wind and provides financial assistance for consumers and businesses who invest in solar energy systems.

NJ Energy customers have also seen the benefits of an energy choice market where customers are able to shop for competitive electricity and natural gas rates.  Many energy consumers in New Jersey have not used NJ Energy Choice to their advantage because of an unfamiliarity to the program.  Natural gas customers who have not shopped pay a default rate with their utility which is based largely on market price.  In this sense the decision to purchase competitive natural gas is a decision of price protection and certainty; savings versus the default rates cannot be guaranteed because they change on a monthly basis.

On the contrary, utility default electric rates are set for one year at a time, and the default rates for the following year can be estimated within a tight range since a large percentage of that energy is purchased in advance for default rate paying customers.  These buying strategies present opportunities for NJ electricity customers to save money on their electric bills if they find competitive electric rates that are lower than the default rates.  Many electric suppliers in New Jersey are offering electricity prices that will save customers money.  Business customers in particular have big opportunities to save money.  Many small businesses in New Jersey have not chosen a competitive electricity supplier because they do not fully understand their electric bill.

New Jersey electricity customers, both residential and business, can use electric choice information sites to understand energy competition and electricity rate structures so that they can maximize their energy savings.

Energy choice is becoming more attractive to residential customers of Orange and Rockland Electric in New York.  The New York utility company charges a default supply rate to its customers which changes on a monthly basis.  The default rate has been above 10 cents per KWh six out of the last nine months, causing electricity customers to look into competitive offers.

The Orange and Rockland price to compare average over the last 12 months is 9.858 cents as of March 2011.  From March 2010 to February 2011 this changing average had been above 10 cents.  Currently, a six month fixed competitive offer of 8.5 cents is available which also includes a promotional $75 visa gift card.  The 8.5 cent offer is a 14% savings versus the 12 month default average.  The idea of saving 14 percent on the electric bill is having a positive effect on electricity shopping in New York.

Unlike other deregulated electricity markets where price to compare default rates are fixed for several months, New York Orange & Rockland price to compare rates are variable and change monthly.  This has caused a slow transition for customers to shop and compare electric rates.  However, with recent data showing that electric default rates in New York have been significantly higher than competitive fixed electric market rates, customers are starting to warm up and welcome the idea of electricity choice.

In Houston Texas, where the electricity market is deregulated, customers have dozens of choices when it comes to who will provide their service for power.  Residential electricity customers in Houston can choose to pay a low variable rate that gives the flexibility to leave the company at any time, or they can choose a number of fixed rate options with different sets of terms ranging from 3 months to 3 years.  In recent years green power choices such as wind power have become more popular among Houston energy customers.

Choosing a wind power option is not different than choosing any other type of electricity rate product.  All of the electricity that is generated from sources such as wind, coal, and natural gas, go into the same grid.  Choosing wind power for your home means that your retail electric provider of choice will buy the power from the wind power company generating the electricity, and then sell it to you at the retail level.  When you buy wind power you are voting with your dollars to support clean energy.

The electricity rate that an Houston energy customer ends up paying depends on the electricity product that they choose. Here are the some of the best electric offers in Houston updated daily:

Today PSE&G serves as the electricity delivery company for over two million residential and business energy customers living in New Jersey, including major suburbs of New York City and Philadelphia.  PSEG used to be a full functioning regulated electricity company, taking care of all aspects of electricity, generation, transmission, distribution, and customer service.  Now that New Jersey has enacted energy choice, PSE&G is now only in charge of delivering power, transmission and distribution, to their customers.

While New Jersey customers have a choice of who supplies their electricity they do not have a choice of who delivers the power to their homes and businesses.  Many consumers in the PSE&G service territory are reluctant to shop for lower electric rates because they feel loyal to PSE&G.  This is the wrong way to view electricity deregulation.  Even when a customer chooses an alternative electricity company to provide power, that person still remains a customer of PSE&G as PSE&G continues to act as the electric utility company delivery power to the property.

When a PSE&G customer receives their electric bill they will notice that the bill is divided into two sections; delivery and supply.  The delivery charges are those charged by PSEG to deliver power as well as maintain the lines and wires.  The electricity delivery charges are regulated by the New Jersey Board of Public Utilities.  The supply section of the electric bill is the part that customers have a choice and can compare electricity rates among other companies.  PSEG customers who do shop pay a default electric rate that PSEG is tasked with charging.  PSE&G does not receive a profit from these default supply charges as stipulated in the New Jersey Electricity Choice and Competition Act.

In addition to PSEG’s service of delivering power and providing default supply rates, they also continue to provide customers with their monthly electric bill.  Even after a PSEG customer chooses an alternative electricity company to provide their electric supply service, the customer will continue to receive one electric bill from PSE&G, in most cases.  It is possible that the alternative electric supplier will want to send their own invoice in which case you will receive two bill, one from PSE&G and one from the chosen supplier.  However, in most cases the competitive electricity companies choose to have their charges billed as a separate line on the PSE&G bill.

The competitive electricity company’s rate takes the place of the PSEG default supply rate, and if the chosen rate is lower than the default rate the customer saves money on their electric bill.  Here are some competitive electric rates that are currently lower than PSE&G default rates.

The Atlantic City Electric company, the electricity utility company serving the majority of southern New Jersey, has the highest electric default rates in the country among utilities serving electricity deregulated markets.  Current residents serviced by Atlantic City Electric who have not chosen a competitive electric supplier for the supply portion of their energy usage, are paying the Atlantic City Electric price to compare rate of 13.15 cents per kilowatt hour.

Customers can save 13% by paying a fixed rate of 11.40 cents per kilowatt hour.  The offer also includes a Visa Prepaid Gift Card.

Despite the large savings available for Atlantic City Electric residential customers, well under 10% of them have switched electric suppliers to companies offering lower electric rates.  Much of the resistence is centered around the unfamiliarity that New Jersyans have with electricity choice.  Most people might be surprised to find out that the Atlantic City Electric company supports energy choice and wants their customers to shop for lower rates. Those who switch electric suppliers will still receive their electric bill from Atlantic City Electric.  The only thing that changes is the Atlantic City Electric price to compare rate, or default rate, is replaced by the rate offered by the electric supplier of the customer’s choice.

Here are current competitive electric rates:

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.

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.

With PPL Capped rates expiring at the end of 2009, PPL is now only in the business of delivering electricity and not responsible for generating or supplying electricity to businesses and consumers.  PPL is  currently providing electricity supply default service to those customers who have not shopped the competitive market.

Residential customers on the PPL default service are paying a rate of $0.10448 per kilowatt hour while small and medium size businesses in the GS1 and GS3 rate classes have a PPL default rate of $0.10402 per kilowatt hour.  Rates for all of these customer classes can be lowered to the $0.09 range, or possibly better, if customers take some time to shop the competitive energy market.

Responding to consumer fears of entering into a contract, many providers are offering a month to month option with no penalty for changing providers.  Customers should understand that with these type of agreements, the rate is variable and can change to anything at any given time.  On the contrary, fixed rates lock in a rate for a specific period of time.  Though it comes with the downside of a penalty if you leave the provider before the contract is up, you get the upside of securing a lower rate than the default service.  In the PPL electricity market, any fixed rate contract that is lower than the default rate ($0.10402 commercial) is guaranteeing savings for 2010.  The floating month to month rate only guarantees savings in the initial month of service with the new provider.

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