How to save money on your Electric Bill
Did you know that Electric and Gas are no longer monopolies and due to deregulation you have a choice of who supplies your business with Electric and Gas services? Maybe you do know because you have been getting annoying sales calls telling you to switch but you think it is a scam. Well I am here to tell you it is not and you can save thousands and perhaps tens of thousands of dollars depending on how much energy you use.
Power to Choose
Thanks to a national energy deregulation bill passed in 1999, organizations in roughly two dozen states (CT, NY, NJ and PA included) can now manage and control their energy costs in ways never before thought possible. Before deregulation you had no choice. You did not need to pay attention to the energy markets and you simply paid the bill like everyone else. But today you have the power to choose your supplier! The savings will not come to you by default; you must actively make a choice. In a deregulated market you must decide who to buy from, when to buy, what type of service agreement, how long to contract or whether you should consider a market based (variable) rate. If you do not choose a new supplier the local utility by default will remain the supplier of your energy at the highest market rate permitted.
What was deregulated?
Simply put the supply portion of your electric bill. The utilities sold off their power plants, and now only own the transmission and distribution wires. They also serve as a 'backstop' for power supply to customers who do not shop for electricity. With the move to competition the utilities have separated their service into two parts:
- Regulated distribution of power, which is still only provided by the utility, and
- Supply (called BGS) of the electric commodity (open to competition)
Customers who choose an alternate energy provider
still have their power delivered to them by their local utility, and will therefore contact their utility for any outage issues. Depending on your utility market after you choose a new supplier you may still get one bill from the utility with two company names on it or you may receive two separate bills; one from the utility for the delivery and the other from the new supplier.
Types of programs
If you have not chosen an alternate supplier you are paying a month-to-month variable rate based on filed tariffs. This is usually the most expensive type of rate that you can have since it is based upon the demand of the month in which you were billed. Like everything else in life if you wait until the last minute to buy it you usually pay more. If you choose a new supplier you have the option of remaining on a month-to-month variable rate or choosing to lock in today’s low rates for up to three years in most markets. Energy costs are at or near their all-time lows so it makes sense to lock in for as long as you can to hedge rising energy costs and inflation.
Types of Sales People
First you need to know if you are speaking with a direct sales person for one supplier or a broker that represents multiple suppliers. An energy broker is ideal as they will present independent and unbiased recommendations for the best program that suits your needs. The sales person you deal with is paid a commission from the energy supplier so there is zero cost to you the customer.
How does it work?
Your sales person will want to see the last three months of your utility bills. They will also ask you to sign a letter of authorization which permits them to bid on your behalf and they will need the legal entity name and corresponding tax ID number. With this information your broker can go out to the market and get competitive bids for your energy needs. They should then present you with some options and you choose to activate your savings.
If you activate your savings by choosing a new supplier there should be no cost to switch. You get the same power, same delivery company, same poles, same wires and same meter. There will be no interruption or downtime of service. The only change will be a new bill in 45 – 60 days from a new supplier.
Today’s Economy is difficult at best and you owe it to your business to see if you can save your company money. You have nothing to lose and big savings to gain.
 Alternate electric providers are also known as Retail Electric Providers (REPs) or Energy Service Companies (ESCOs) depending on your market.