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ElectricityMatch.com
We created ElectricityMatch.com based on the simple truth that searching for great electricity offers is of no value unless you actually find one that matches your needs. Your time is valuable and you want to see competitive offers presented in a clear and easy-to-read format. You need choices free from gimmicks and confusing jargon. You want to work with top-rated energy providers that consistently deliver what they sell.
About ElectricityMatch
About Charlie HewittCharlie Hewitt has more than 25 years of in-depth energy experience having served in executive and managerial roles at some of the largest retail energy providers in North America. His expertise covers a wide range of retail energy disciplines including pricing, contracting, risk management, and credit. He holds an MBA from UT Arlington, MA and BS degrees in geology from UT Austin, and was a TXU environmental research fellow.
ElectricityMatch.com
Why Shop for Electricity?
There are many things that motivate us to shop for goods and services. We are looking for quality, selection, service, and innovation. Most importantly, we shop because there is an element of satisfaction in getting a good deal.
In the electricity market, there is a constant influx of new providers. Mergers and acquisitions frequently change the competitive landscape. However, this creates opportunities for residential customers to get low rates, support renewable energy, and gain access to the latest energy saving technology.
With so many electricity suppliers in the market,it can be a challenge to evaluate all of the available rate plans. This presentation is intended to give consumers some tips and guidelines for making the most of theirelectricity shopping experience.
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Before You Shop
To find the best electricity rate for your home, there is some information you need to have handy before you begin your search:
• Copy of your most recent utility or competitive supplier billing statement
The billing statement has important information needed to switch your service to a different electricity provider. This includes the exact service address of your home, utility account number, point-of-delivery identification number, and/or electric service identifier (ESI ID).
• List of how much electricity (kWh) you consumed in each billing period over the past 12 months
If you do not have billing statements available, most utilities and competitive electricity providers have this information available via their online customer portal. Some plans are better-suited for small or large average usage.
• Information to confirm your identity
You many need your driver’s license number or Social Security number to complete the enrollment process.
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Key Elements
Now that you have gathered the information you need to shop for and select great electricity rates, we need to cover the basics on the types of plans you will encounter.
The topics to be addressed include:
• Electricity provider
• Payment type
• Rate structure
• Term
• Extras
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Electricity Provider
The good news is that electricity companies undergo a thorough licensing process in each state where they market their services. There are also safety nets in place in the unlikely event your electricity provider exits the market. This allows you to shop based on rates, service, and features rather than having to worry about the financial integrity of the energy supplier.
The bad news is that it can be difficult to figure out which electricity providers have the best track records when it comes to customer service. Some states, like Texas, publish complaint statistics for each provider. While these are helpful, keep in mind that this information may not reflect the overall customer service experience. After all, most customers do not file complaints just because they find thought a customer service representative could have been more cheerful.
Check with friends, family, and co-workers to learn about their service experiences. Be wary of recommendations that involve network marketing as they are typically biased. You can also check online reviews or social media. Just keep in mind that customers are more likely to complain that sing praises on those forums.
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Payment TypeIn northeastern states with electric customer choice, it is common for your electricity provider to bill you through your utility. If this is the case, you can skip this section!
For customers billed directly by their competitive electricity provider, there are two primary payment approaches:
Postpaid
This is the standard approach. Your electricity provider bills you after the monthly service cycle. This means the provider is taking a risk by purchasing the electricity on your behalf and then collecting payment after you have used it. This requires you to meet the electricity provider’s credit standards or pay a deposit. Credit standards vary by provider are not disclosed. If your credit is decent but not stellar you might be able to shop electricity providers and find one not requiring a deposit.
Prepaid
With prepaid electricity offers, you establish an initial balance with the electricity provider and then deposit additional funds into your account as the balance runs down. These plans are great for customers needing immediate service and not wanting to tie up money in a deposit.
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Rate Structure
There are three main categories of electricity rates available to residential customers: fixed rate, variable rate, and time-of use.
Fixed Rate
The appeal of a fixed rate structure is easy to appreciate. You get peace of mind knowing that your rate is guaranteed for the term of the agreement. Although most electricity providers can adjust the rate if there is a change in law or regulation, you are protected from wholesale market price swings. Polar vortex? No problem. Spike in prices on the hottest day of the decade? Same price.
Of course, the fixed rate protects you from all price changes. If prices go down, your rate stays put. If you terminate your agreement early, you typically pay a penalty for doing so.
Think of it as gilded cage. It protects you but it also keeps you from leaving. This is by far, the most common plan chosen by consumers because the benefits of price protection far outweigh the obligation of fulfilling the contract term.
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Rate Structure
Variable Rate
For customers desiring flexibility, variable rate plans may be the best choice. With these plans, the rate changes every month. Prospective customers can view historical rates on the electricity provider’s website for an idea of much they have varied in the past. While there is no price certainty, customers are free to convert to a fixed price plan or change providers without penalty.
Most of these plans do not change rates based on a transparent formula. This is why Connecticut recently banned variable rates as they were deemed potentially deceptive. Electricity consumers in other states have not had significant problems and these rate plans have proven to be very popular.
Some electricity providers do provide formulas for how their variable rates change. These rate plans are usually tied to natural gas prices and the formula is spelled out in the customer agreement.
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Rate Structure
Time-of-Use Rates
Smart meters have opened up a new type of rate plan for residential electricity consumers. Time-of-use rate plans charge different rates depending on the time of day or day of the week electricity is consumed.
For example, an electricity provider might reduce the rate for evenings, weekends, nights or other times. Some providers even set the electricity rate to zero for Saturdays or Sundays.
The purpose of these rates plan is to reward customers who shift electricity usage to off-peak periods. Instead of running the dishwasher or doing laundry in the afternoon, the customer has a reason to move those tasks to evenings or weekends.
To truly benefit from these rate plans, you should carefully consider what energy uses you can move to the discounted periods. If you travel during the week or are a night owl, these may be a great option to consider.
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Term
If you are choosing a fixed price or time-of-use electricity rate plan, give some thought as to what term might suit you best.
Shorter terms are typically less than a year. These might be a good choice if you want a measure of price security but do not want to be tied down too long.
The twelve month term is the workhorse of the electricity choice market. It provides a reasonable amount of price protection and it blends in peak and off-peak monthly prices. This is a great middle-of-the-road choice and gives you a chance to try out a new electricity company without committing to a long-term deal.
Longer terms (24 months and greater) provide maximum price certainty. They also reduce how often you have to shop for electricity. Be sure that you are comfortable with the electricity provider and understand the penalties for terminating the agreement early.
Some electricity providers will offer odd terms (e.g., 14 months) to take advantage of opportunities in the wholesale market. Be open to selecting one of these plans if the price is favorable.
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Extras – The Fun Stuff!Now that you have waded through the boring stuff, you get to consider some of the cooler features of electricity rate plans.
• Billing and Payment. Most electricity providers offer electronic billing and automatic payments. Some providers actually require it. You will even see a few electricity companies that waive fees on credit card payments. Make sure you understand what options are associated with the provider and plan you select.
• Renewable Energy. You have an opportunity to support green energy by selecting a plan backed by renewable energy. Some plans are 100% renewable while others may have a lesser percentage.
• Thermostat Plans. Electricity providers may offer free smart thermostats as an incentive to enroll. These are a great way to optimize your heating and cooling.
• HVAC Maintenance. Electricity plans are available that include seasonal maintenance to keep your heating and cooling system in top shape.
• Rewards Programs. Some electricity provider have their own loyalty programs while others participate in broader programs like Plenti.
There are many more offerings from electricity providers. Just be sure to take care of the steak before considering the sizzle.
