PSEG Price to Compare

June 24, 2010

As reported by
PSEG Electric Rates for 2010March 7, 2010

Basic Generations Service (BGS) rates for PSEG electric customers have been established for the new year.  BGS rates are the default rate for customers serviced by the utility PSEG who have not shopped for a competitive electricity supplier.  The new rates will go into effect on June 1.

PSEG default rates for the supply portion of the bill are divided into a summer term that begins June 1 and extends through the end of September, and the non summer term that begins October 1 and extends through the end of May 2011.  The default BGS rates include the entire Supply section on customer PSEG bills.  This is often an area of confusion to business customers who look into the benefits of competitive rate shopping.  The total price to compare takes into account the generation rate as well as capacity charges.  When customers just compare the per KWh rate on their current bill they are not getting an apples-to-apples comparison. 

In order to realize the actual price to compare, PSEG business customers should take their total supply charge and divide it by the total amount of KWh they consumed for the bill period.  This will result in a KWh rate that can be compared to offers from competitive suppliers.  This price to compare will include state taxes of 7%.  So if the competive rate does not include taxes (as will be stated on the contract) multiply the rate by 1.07 to get the true comparison rate.

The bottom line is that there are competitive electricity suppliers available for business customers serviced by PSEG.  Depending on the size of the customer and the type of electricity product chosen (fixed, variable, green energy, long term), savings can be as much as 25%.

Our perspective:

We found this to be a very informative article. When we are speaking to a prospective client, we alway go into great details discussing the importance of comparing a price to compare.

Things to know

7% Loss factor – In order to deliver 100,000 kwh of electric to a destination a supplier must ship 107,000 kwh. This 7% allowance must be factored into a deregulated electric price received from a provider. This loss factor is already in PSEG price to compare.

Sales Tax – PSEG also has 7% sales tax figured into their price to compare.

We find that many times potential clients are mislead. They are quoted the price for the supply only and told the actual price to compare. As usual, the savings are too good to be true.

Actually, the savings can be very good but you have to define what is the actual price they are offering. Is it fully loaded. Does it inclde the 7% loss allowance plus the 7% sales tax.

To learn more email or call 856-857-1230