Home
Compare Energy Prices to Save Money on Your Electric Bill
One thing that everyone needs is power. Homes today are using more electricity than ever because of all the gadgets they have plugged in 24/7. This presents plenty of ways to save energy. By learning the truth about how energy companies bill the general public and how to truly compare energy prices, anyone can save money. So, before signing up with one of the companies available in your area, read on to learn how to compare energy prices for your electric bill.
Can We Compare Energy Prices?
Many states today have decided that while the default supplier for electric is the local electric company, the market itself is open for consumers to compare energy prices. This has opened up a new market for other companies to come in and present their business as an alternative electric company. This is not the case in all states, but where it is available, consumers have the opportunity to reduce energy bills significantly.
How to Compare Energy Prices
When looking at your electric bill, it is broken out into two different areas. The first area is the delivery charge. Unfortunately, there is nothing you can do about the prices on this part of the bill. The delivery charges are determined by your local utility company. Since they are serving the area and maintaining the lines, homeowners are more or less stuck with the prices these companies charge. However, there is a second part of the bill that offers you a way to save money on electric.
The second part of the bill is where you are going to look when you want to compare energy prices. This section of the electric bill lists the supply charges. When you are shopping around, you will need to know the true comparable rate of the supplier. This can get tricky, and it is where some companies try to be deceitful when luring in new customers. The areas of interest here are: Transmission Charge and Basic Generation Service.
The Basic Generation Service is usually broken out into two different prices. The reason for this is that most electric suppliers charge different rates for the first XX amount of kWhs on the bill. Your bill might look something like this:
Basic Generation Serv: First 550 kWhs X $0.105345 ea kWh 59.59
Next 79 kWhs X $0.108228 ea kWh 8.55
In this particular case, the consumer is being charged a specific rate on every bill for the first 550 kWhs used. You will notice the rate climbs for all electricity used after that allotment. This is where most energy companies get you. During high demand periods, such as the winter and summer, most consumers will blow right through their base kWhs and most of the bill is at the higher rate. That rate will also change by the season. Again, during high demand periods, most electric companies will increase that rate and, therefore, increase your bill.
What most people fail to take into account when they compare energy prices is the portion of the bill that is right above the Basic Generation Service charges. On your bill, it will look something like this:
Transmission Service Charge $0.010397 each kWh 6.54
This is the service charge that should be included in your Basic Generation Service fee when you compare energy prices. In effect, the rate from this particular electric company is not $.108331 (the average of both rates divided by kWhs) that it appears to be on the bill. It is actually $0.118728. This is the rate that must be used when you compare energy prices.
Another bonus offered by most alternative suppliers is that they allow you to lock in your rate for a specific period of time. While they will usually have an early termination fee, the lower rate makes it beneficial to sign a 6-month or 12-month contract. Take the time to research past bills to find out what your lowest supply charge was over the course of the year. That is the rate you will want to compare against the long-term rates these companies are offering. It may also prove prudent to compare energy prices during lower demand months, as you can lock in that lower rate before prices rise in the winter or summer months.
Once you have that rate, then it is time to shop around. However, it is still important to look over the terms and conditions of all companies to ensure the published rate includes both the generation charge AND the transmission service charge. If the company does not list the policy clearly on its site, then take the time to make a call before signing up for service.
Which Utility Companies Are Available In My Area?
The answer to this is actually quite simple. In most cases, the State Board of Public Utilities will have a link showing all approved energy suppliers. This list should also have a link for each company with its published rates. Simply go down the list and compare energy prices until you find the lowest rate available. Once you find your company, contact them to find out how to change your service.
This can usually be done right online with a few clicks of the mouse. However, something to consider is if you are currently on a budget or not. In most cases, your default company will only budget you for the delivery charges after the change. You will actually have to contact the new company and make them aware of the fact you wish to be put on a budget. If they do not offer this service, you will have to pay for the supply charges in total each month. If they do offer this feature, they will contact your previous supplier to establish what your monthly budget will be on the new billing.
Will Billing or Service Change After Switching Companies?
No! After you compare energy prices and find a new supplier, your default company will still handle all service calls and all billing. If anything happens to your service, you would still call the same company that you have been calling from day one. You will still only receive one bill. The only difference will be the lower rate. All you need to do is make sure you pay your bill on time so you can continue to save money on electric.
As stated above, if you are on budget billing, you will have to contact the new supplier and make them aware of the fact you wish to establish a budget with them. Not all alternative energy suppliers offer budget billing in every state they service. If this is important, please read each companies billing terms and conditions before signing up with them as your new supplier. If they do offer budget billing, they will contact your old supplier for usage records and let them know the new budget for your future bills. You will still only receive one bill from your service company.
