How To Shop For Electric

How much is electricity is not the only question you should ask!

There are certain details you should be aware of prior to committing to a new kWh supplier. Grab your power bill for reference.

    • Comparing prices – make sure your comparing peaches to peaches!   All plans are not alike, how much is the electricity depends on the price per kWh. The factors involved in the pricing will be dependent on whether your signing a contract or not, going with a fixed or variable rate, which months you make a decision to change your supplier, market forces like the price of gas or coal, whether it’s sun and solar systems or wind energy, and if unknowns like weather conditions or natural catastrophes are affecting the energy markets. When comparing prices make a list next to that price so you understand what your comparing.  KEEP IN MIND THAT ANY PROVIDER YOU CHOOSE SHOULD HAVE A BETTER PRICE PER kWh THAN YOUR UTILITY, OTHERWISE DON”T MAKE A CHANGE
    • Comparing terms – as mentioned above, each company offers different terms such as:
          • Variable or fixed – the rate your used to now is typically a variable rate, it is the same thing that our utility has always offered but check yours directly on your electricity bill.
              • A variable rate will fluctuate because the cost of energy changes with the market.  The benefit is that your paying market prices which over time tend to be the true value of a commodity, the risk of a variable price though is that the market price shoots up quickly and unexpectedly.
              • A fixed rate on the other hand is one that doesn’t move at all.  It stays the same throughout a contract period.  The largest benefit of this type of rate is consistency, your rate won’t move so you can budget appropriately.  Additionally you can benefit if prices move higher than your contract rate because your paying less but the risk is that the if the rates go lower than what your contract rate is than your paying more for the one you’ve chosen to set with a contract.
            • Contracts – pay close attention to the fine print!!!
              • Is it a contract?  Some companies sign agreements instead of a contract.  There is a difference!!  A huge difference which can cost you money.  Contracts specify exact terms and conditions that must be followed by the energy company.   Agreements aren’t as iron clad.  They sometimes allow the company you signed with to make decisions and change terms and conditions without your expressed consent.  What does your paperwork say, contract or agreement? 
              • What is the length of term?  Many companies will sign you to a twelve month or year contract.  Make sure though that the rate stays the same for that full twelve months because some companies are known to have conditions in the contract which allows for adjustments every 3 month, 6 month, or 9 month period.  The pitfall here is that these contracts are geared towards a rate change in the most expensive months.  That is how the companies recoup any losses from signing people up at a lower promotion rate.
              • Promotional rates – Everyone is familiar with these.  Low teaser rates to induce you to sign a contract.  Read the fine print!!!  These companies always get there money in the long run, how is your new company getting theres? How much is electricity now compared to later?
              • Is the company going to be in business long term?  If your signing a contract you want to make sure the company you choose is on the up and up.  A few companies are being sued for slamming and pyramid **LINK***scams*****, do your research and make sure  your not signing with one.
              • Ask the person selling you the product questions.   Do they even know why twhat they get in return for you changing your electric.  Ask them why their rate is so low.
    • Once you’ve decided on the best rate and terms compare that to your current usage.  For electric the usage is based on kilowatt-hours (k-Wh), you get charged your rate multiplied by your monthly usage.  So find your current power bill and locate the utilities’ rate and the monthly usage.  Your electricity bill will equal:

Utility bill = Utility rate x monthly usage (in k-Wh)
Your new electricity bill will follow the same equation:
Your expected new electricity bill = new rate x monthly usage (in k-Wh)

Your savings will be the difference between the two:
Savings = Utility bill – expected new bill

Here is an example using a past PECO (Philadelphia’s utility) rate: 
PECO rate = $.0992 per k-Wh
New rate = $.0899 per k – Wh
Current usage = 768 k-Wh a month
PECO bill = $.0992 x 768 k-Wh = $76.19
My expected new electricity bill = $.0899 x 768 = $69.04
Expected savings per month = $76.19 – $69.04 = $7.15
Expected yearly savings = $7.15 x 12 months = $85.80

That’s more than one free month of PECO and around a 10% savings for the year. This example varies on savings in Connecticut, Maryland, New York, New Jersey, and Pennsylvania but in most cases an alternative supplier will benefit the consumer and we’ve even seen savings in the area of 30%.  Click here for an explanation of deregulation to understand why and how this can even happen!

If you are a resident in Connecticut, Maryland, New York, New Jersey, and Pennsylvania you can go to www.Shop4Electric.com for a competitive kWh rate.  Commercial customers click here to start.