Now that energy markets have been deregulated and power suppliers have to compete with each other for your business, things have gotten…a little complicated to say the least. To make their prices look as attractive as possible, providers are playing some funny games with rates and fees and hidden “ancillary charges” Here are a few things they hope you don’t notice until it’s too late.
1. The quote you receive doesn’t always include hidden “ancillary charges.”
Let’s face it, if you have been in a deregulated market very long, you’ve probably found the price quoted doesn’t always match the bill.
Providers are competing on the base rate (kWh). The standard charges over and above the cost of energy are the delivery charges, PUC fees and taxes. These should all be known up-front and are supposed to be “pass-through” charges, in other words passed through with no mark-up. But what they don’t tell you can be huge. In some cases the provider may choose to inflate these charges to the customer, or add ancillary fees not included in the original quote. Buyer beware.
2. You can save money by signing a new contract up to 2 years before your contract expires.
If your contract expiration date is looming, this is not the best time to make a decision on your electricity. You might be forced to accept the current market price, which is higher than you like. Providers can play on customer’s fears of a power outage and pressure them to sign contract they regret. What they don’t tell you is that you can start the process long before the urgent takes precedent over the important. When market conditions are favorable, you can write a new contract for up to 2 years before your contract expires, thus locking in a lower rate.
3. Loyalty to the incumbent provider can cost you.
Your company’s current provider is in the energy business and knows that clients switch regularly. It’s a natural part of being in a deregulated environment. Don’t stick with your provider out of a sense of loyalty or misplaced idea that he’ll automatically work to get you the best price. Do your research and get several prices. If you want to be loyal, give your current provider a chance to beat the best price you find.
4. Talking to multiple providers makes good business sense.
Just like it is for most things, it pays to shop around for electricity. Most people don’t… because they think it’s too difficult and time consuming. That is a real concern, but if you place this in the hands of a reputable electricity broker, they can do all the legwork for you. Don’t put all your eggs in one basket.
5. Brokers bid out your usage to several providers, thus securing a very competitive rate.
A broker will do the heavy lifting for you. He’ll talk to his provider contacts, negotiate rates and get multiple bids based on your usage history. In effect, the broker causes a “bidding war” for your electricity contract. And when that happens you can rest assured you are getting the most competitive price available.
Conclusion: In a deregulated energy market like yours, it’s almost impossible to keep track of all the pricing games…and to know all things the providers would prefer you didn’t know. Fortunately, there’s a better way. A competent energy broker can insure that you have all the information you need to make the wisest choice. An energy broker is not loyal to any one provider. They work for you to develop an energy management strategy that’s best for you. And, best of all, it doesn’t cost you anything to work with a broker.
Since 2002, as one of the industry’s most respected brokers, Texzon Utilities has helped companies of all sizes make well informed, strategic decisions regarding their energy purchases, producing savings that track to the bottom line.