Everyone Knows It's Windy

I’ve known for some time that I can choose my electricity supplier.  Electric choice came about as a result of power industry deregulation that began in the late 1990s.  By way of background, the power supplier operates the machinery that generates electricity.  The other link in the electric supply chain is the local electric distribution company.  We can’t choose our distribution company.  Electric distribution companies are public utilities that have been granted the exclusive right to run wires overhead or underground that connect to the wires in our homes.  Since distribution companies are monopolies, their rates are regulated by state public utility commissions.  Suppliers, on the other hand, are able to compete with each other to sell us the power that gets delivered by the distribution company.

I had been contacted in the past by various power supply companies seeking my business.  In one case someone came to my door and offered me what seemed to be a good deal.  A few years later, another company offered me what seemed like a slightly better deal, so I switched to them.  In both cases, I did very little research in making my choice, and I never really thought about switching suppliers on my own. 

Recently, however, my power supplier notified me that it was leaving the electrical supply business.  A second letter stated that my supplier was transferring its customers to another company.  The letter told me that the rate would stay the same for one month and then would change from a fixed rate to a variable rate.  I remembered reading horror stories in the newspaper about people receiving shockingly high bills this past winter after signing up for variable rate electricity.  So I decided I’d better do some “power shopping” to figure out the best deal for me.

Now I knew the internet was the place to go to shop for power, but I’d never done it before.  So I went to my favorite search engine and searched for “electricity choice.”  Since I live in Pennsylvania, I looked for websites with a Pennsylvania focus.  I found two that were very helpful.  The first was a site called Electric Shopping Guide.  The Pennsylvania Office of Consumer Advocate runs this site, which seems like a pretty reliable source of information to me.  The site contains a Guide instructing consumers how to shop for electricity.  The Guide advises consumers about what to look for in selecting a supplier.  It also contains charts with rates offered by competing suppliers and other useful information.

I discovered that one of the first things you must decide is whether you want to sign up for fixed rate or variable rate pricing.  Variable rates are often lower than fixed rates but can be increased by the supplier without notice.  If you are interested in looking for the best deal every month, a variable rate may interest you.  Personally, I felt like I had better things to do than monitor the cost of electricity on a monthly basis, so I looked for a fixed rate. 

There are two important factors in choosing a fixed rate.  First of all, you have to decide for how long a term you want the fixed rate.  Terms typically range from 3 months to a year.  Obviously, if you anticipate rates dropping, you may want a shorter term.  Conversely, if you think they may be going up, pick a longer term.  The second important factor in choosing a fixed term is whether the supplier charges an early termination fee.  Just like many mobile phone carriers, some electricity suppliers will hit you with a fee if you decide to leave early.  I noticed that one supplier charges a fee of $295, while others have no early termination fee at all.  An early termination fee is not legally allowed for variable rate plans.

The charts in the Electric Shopping Guide also will tell you if the electricity being supplied is generated from burning fossil fuels like coal or from renewable resources such as wind, solar, water or biomass. 

While the Shopping Guide provided much useful information, I found that the rates quoted in the charts were somewhat outdated.  So I visited the other site that I found to be helpful.  PA Power Switch – Pennsylvania is operated by the Pennsylvania Public Utility Commission and it contains more up-to-date rate comparisons.  Then, if you find a supplier that has what you want, you can click on a link that takes you directly to the supplier’s website.  Once on the supplier’s website, you can see the actual rates being offered and sign up for the plan you want.  The new supplier typically will contact your present supplier and distribution company to advise them of your switch.

As a result of my power shopping, I switched to a supplier offering a fixed price for a one-year term.  My supplier will not charge me a cancellation fee if I should decide to switch again during my contract term.  And the best part is this:  for less than a penny per kilowatt hour more, I am now getting electricity generated exclusively by wind power.  I was so excited that I went out and bought a cordless electric lawn mower.  Now the power of the wind cuts my grass!

So whether you’re interested in reducing your carbon footprint or in just finding the cheapest electricity available, doing some power shopping is a good idea.  And now, when I’m mowing my lawn or dreaming about buying a plug-in hybrid electric vehicle, I’ll be humming that old song by The Association, “Everyone Knows It’s Windy.”