As reported by ElectricWatch.org

imagesThe cold winter of 2013-2014 has resulted in a jump in wholesale energy prices across the country. Rising oil, coal, and natural gas prices have caused higher electricity prices for suppliers, and those suppliers have passed the expense on to their customers where possible.

Many electricity customers in energy choice markets have enrolled in variable rate plans over the last few years. Electricity companies offering variable rates often entice new customers into their service by offering a low teaser rate that shows impressive savings against the utility default rate for the first month. However, with time the variable electric rate inches up month after month, or rapidly if the energy markets see a big spike forcing electricity companies to pass the higher prices onto their customers.

In January and February many electricity customers of North American Power, Energy Plus, and Systrum Energy are seeing their bills double, and in some cases triple, do to skyrocketing variable electric rates. These electricity companies, and others, have attracted customers in over the last several years offering “no contracts” and rewards programs. However, as many consumers are finding out, not having a contract in place can be a costly mistake. Despite rising energy prices, consumers who have elected to enter into fixed electric rate contracts are not being hurt as their rates are locked for a specific term.

Electricity customers who are on variable rate plans should start shopping for fixed electric rates as soon as possible. If you are on a variable rate and haven’t gotten your bill yet it would be a good idea to call your supplier and get an estimate of how much the electric bill will be. Once you receive the electric bill, switching suppliers at that point will guarantee that you receive at least one more bill from your current supplier.

Our viewpoint:

HBS deals primarily in the commercial deregulated energy market. We alway encourage our clients to sign a fixed cost electric contract. There have been many companies that popped up over the past few years trying to take advantage of the competitive deregulated prices offerring low teaser rates to get you onboard. Beware of the variable rate contracts. The savings never add up and many times you find there is little or no savings.

To learn more email george@hbsadvantage.com

As printed in philly.com

 

LindaPeterson  of West Chester was eager to switch from Peco Energy Co. at the end of last year.
She signed up for an alternative electricity supplier offering avariable rate that would fluctuate depending upon market conditions.

AsPeterson  discovered, variable rates sure can vary.

For a few months this year, Peterson’s rate was very attractive, indeed. But it went up
58 percent from May to June. At 15.63 cents per kilowatt hour – that’s just the
generation charge – her last bill was about $23 more than it would have been had
she stayed with Peco.

“I knew there would be some variation, but that’s just a huge, huge increase,” said
Peterson, who is semi-retired.

A representative from her supplier, Palmco Power PA L.L.C., did not return a phone call about
Peterson’s bill. But its customer-service department, in an unsigned e-mail,
blamed an “unusual” wholesale price spike for the increase.

“Thankfully,however, shortly after the wholesale price increase, wholesale prices dropped,and our
price billed to our customers dropped accordingly,” it said.

In Pennsylvania’s buyer-beware world of deregulated utilities, Peterson can’t do much but switch to
another supplier. Her agreement, like most with variablerates, does not carry an
early cancellation fee.

According to the state Public Utility Commission, a supplier can bill a variable-rate customer
at whatever price it believes the market will bear, even if the customer
originally thought he or she was getting a discount.

A company also can offer different rates to different customers. The variable rate that is
on a customer’s bill does not have to be the same as the initial price posted on
the PUC’s website, http://PAPowerSwitch.com.

“A supplier could have one rate for PowerSwitch . . . while offering a different rate
door-to-door . . . yet a different rate for enrolling by mail,”Denise McCracken,
the PUC’s spokeswoman, said in an e-mail. “They could offer me one rate . . . my
neighbor a different rate (as long as they are not discriminatingon the basis of
race, gender, etc. of course).”

In Pennsylvania and New Jersey, where dozens of electrical suppliers are competing, customers
accustomed to a lifetime of regulated utility prices now face a dizzying array of
choices – fixed rates, variable rates, and”green” rates from renewable-power
generators. Next year, Peco customers will begin seeing rates that vary hourly,
according to the market.

More than 20 percent of Peco customers have switched since Jan. 1. But despite promises of
savings, most residential customers seem unwilling to leave the protective comfort of the regulated utility.

On Monday, the Retail Energy Supply Association launched a campaign to educate customers
about the benefits of switching, but it faces headwinds generated bycustomers such as Peterson, who share their experiences.

“My neighbors are very scared about switching,” said Peterson, a clinical social worker with a
small private practice.

Peterson was an early adopter of electricity choice. She had switched suppliers in the late
1990s, when limited deregulation was introduced into the Peco market. Competitive
suppliers eventually pulled out because they could no longer beat the utility’s
capped rates. But when Peco’s rate limits were lifted at the endof 2010,
competitive suppliers returned en masse.

Peterson signed up with Palmco, the marketing arm of a Brooklyn fuel-oil dealer, which posted a
price on the PUC’s website. She liked the company’s low-key marketing,compared
with the blustery direct-mail appeals she received from bigger suppliers.

“The fact that they weren’t doing a lot of heavy marketing, I guess I trusted them
a little,” she said. “I didn’t expect them to escalate the price like that.”

According to a review of Peterson’s bills, Palmco’s rate was very generous during the first
few months. It charged her an introductory rate of 5.78 cents perkilowatt hour,
clearly a below-market 42 percent off Peco’s rate. But by May,Palmco’s rate had
increased to 9.91 cents – just about the same rate Peco was charging.

And then in June came the whopping 58 percent increase – to 15.63 cents per kilowatt hour.
Peterson averages about 475 kilowatt hours a month.

The owner of Palmco, Robert Palmese, did not return a phone call. But his
company’scustomer-service department offered this response:

“Our family has been in the energy business since 1938, 73 years. We know from experience
that it is always in the best interest of our customers to keep prices for energy
as low as possible.”

In an interview in October, Palmese offered reassurance to customers who might consider
his company.

“We have very casual marketing,” he said. “We’d like our customers tolike us. Just try
us, you may like us.

“You are always free to leave.”

 

Our Perspective

HBS is a independent deregulated energy management consultant. We have been providing deregulated energy solutions to our clients since 2000. We have heard stories like the one experienced above, countless times.

While the energy market prices are at their low point, it would be smart to lock into a fixed price contract for natural gas or electric for a minimum of 1 year but also be willing to look at the 2 year option. Fixed priced contracts normally provide a 10% to 15% savings under what Peco ic currently charging.

Do not be fooled by the variable rate options.

It is a good marketing ploy….

no contract…

month to month float….

But you will only pay more in the long run.

 

To learn more about deregulated opportunities for yopur business email

george@hbsadvantage.com

Visit us on the web www.hutchinsonbusinesssolutions.com

Just the Facts!!!

July 16, 2010

With the current electric market prices being very desirable, deregulation has hit full stride in New Jersey.

If you are a business spending over $3000 a month on electric, you will find real savings by shopping your account with one of the 8 to 10 deregulated providers selling electric in NJ. Hutchinson Business Solutions is an independent energy management consultant who represents all of the major deregulated providers selling electric in NJ. We have been bring deregulated savings to our clients for over 10 years.

 If you are not currently participating in the deregulated savings opportunity, the timing could not be better.

 Just a word of precaution!

Due to the current market growth there are many new faces showing up hawking the merits. Be sure to know all the facts before making any decision.

First, the price to compare from your local provider includes sales tax. Should you be taking to a consultant or broker, ask if the price is fully loaded. ie: does it include the 7% loss allowance (to deliver 100,000 kwh of electric, the providers must actually send 107,000 kwh, for there is a 7% loss in transmission), also does it include 7% sales tax.

Both these components are included in the local provider price to compare.

We see many companies that fail to include these items in their presentation and therefore you are not comparing apples to apples. There are times we found that when you actually add these 2 factors, the price is higher than what you are currently paying.

Know the facts.

Ask the right questions.

There are opportunities to save from 10% to 25% in the deregulated electric market depending on your usage patterns

Remember… The local provider buys electric on the wholesale market and then bills their customers retails pricing. HBS puts their clients in the wholesale position.

To learn more email george@hbsadvantage.com or call 856-857-1230.

Visit s on the web www.hutchinsonbusinesssolutions.com