How to Save Money on Your Electric Bill
Easy How to Do It
You can save money on your electric bill if you live in Connecticut, Illinois, Massachusetts, Maryland, New Jersey, New York, Ohio, Pennsylvania, Texas, or any of the many other states that changed how they regulate electric utility companies. The choice is up to you.
It used to be that electric companies were regulated by the state utility commission. And the rates they charged on your electric bill were fixed. But recently some state governments have deregulated electric companies. With deregulation, many companies can sell electricity in the same area, and can set their own prices. This change introduces competition between electric companies. Increasing competition has been successful in reduce electric rates and lowers your utility bills.
In these states with deregulated utility providers, consumers and business owners can switch to a low-cost electric supplier and save money on their monthly electric bill. Buying cheap electricity means that you can reduce your electric bill by as much as 20%. Business customers can save even more.
Your Electric Bill
Your electric bill shows separate charges for generation, transmission and distribution of electricity. In the past, one company provided all 3 parts of your electricity service. Now with deregulation, many companies will compete for the business of electric generation. They want to be your supplier of electricity. Transmission and distribution covers the actual delivery of electricity over poles and wires to your home or place of business. These services are provided by your local wire company and have NOT been deregulated. Your usual electric company will continue to provide transmission and distribution, prepare your electric bill, and respond to emergencies and power outages just as before. And the charges for transmission and distribution that appear on your electric bill are still regulated by the state Public Utilities Commission.
How to Shop for Electricity
You can save money on your electric bill by shopping carefully among the electric providers. These companies quote their price for electricity in cents per kilowatt hour, kWh. For example, they may offer electricity for $0.0899 per KWh. Your electric bill shows the rate you are now paying. Compare the new offer with the current price on your electric bill to decide if you will save money. Distribution charges on your electric bill will be the same, no matter which electric supplier you choose.
Electric rates are quoted per kilowatt hour, kWh. Some suppliers will offer you guaranteed rate for a fixed period, or a variable rate, that can change at any time. With a guaranteed rate, you are more likely to save money on your electric bill. You should also ask about the length of the contract, if there is an early termination fee. Some companies offer incentives for new customers, like a gift card.
The Public Utilities Commission in your state has an official website where you'll find a list of the companies licensed to sell electric power in your area. To find out the electric rate they offer, you should contact your supplier.
What If I Don't Choose an Alternate Electric Provider
If you don't select an alternate electric company, your business will automatically be assigned to a one by default. The default electric provider company and the default rate for electricity is chosen by the Public Utilities Commission in your state. So it makes sense to shop for a lower electric rate and to sign up with that company.
What Changes Will I Notice With a New Electric Provider
Once you sign up with your new electric provider, there is nothing else to do. You don't have to notify your previous electri company. There is no change in your electric meter or your monthly readings. Only the charge on your electric bill will change, because you are saving money. You will have a dependable source of electricity, no matter which supplier you choose.
How Much Will I Pay for Electricity?
The price of electricity per kilowatt hour varies around the USA. It depends on the costs of generating electricity. The expense of replacing old power plants, installing environmental controls and the availability of inexpensive fuels will affect the price of electricity. The average electric rate in the USA is about 9.78 cents per kilowatt hour. But rates are much higher in the northeastern section of the country, so these states have been quicker to deregulate electric suppliers. By introducing competition among power suppliers, companies become more efficient and electric bills are lower.
What Is Electricity?
When a turbine spins, it creates an electric current. The power plant can run on many fuels like coal, natural gas, wind power, nuclear power, geothermal power from the earth, or solar power. Once electricity is generated, it must be transported along the transmission and distribution network. Electricity must be consumed immediately because there are no current technologies to store it. So the supply and consumption of electricity must be kept in balance at all times.