Thursday, June 23, 2011

Is it worth changing your energy supplier?

Thanks to New Jersey’s energy deregulation law, individuals and businesses have the right to choose their electric and natural gas supplier. Customers can now purchase from the lowest priced or any company that best meets their needs as opposed to whatever company serves the local community. 
"Life is a sum of all your choices." ~ Albert Campus
Electric and natural gas suppliers are different than distribution utility companies. The distribution company is who you currently receive your bill from. They own the pipes and wires that bring the power to you.  However, if you look at your current bill you will see two charges. One is for the distribution company and the other is for the energy supplier. You can change the supplier but not the distributor.  In most cases, if you change providers your bill will still appear to be the same and be paid in the same manner.  Think of this as going to Shop Rite and buying Pepsi instead of Coke.  The receipt is still from Shop Rite no matter what brand you purchase.
"You have chosen wisely." ~ Grail Knight
To determine if you can find a lower rate than you are currently paying, click on your current energy provider to find out which alternative electric suppliers serve your area.

Atlantic City Electric
Orangel Rockland Electric

Elizabethtown Gas
New Jersey Natural Gas
South Jersey Gas

The website can also help you make your decision.  The site compares available rates and offers in your area.
"A man who does not think for himself does not think at all." ~ Oscar Wilde
Before changing providers, you should definitely do some homework and research all available options before making a selection. That will help assure the deal you choose is actually as good as it looks.  Here are some important answers you should have answered before signing on the dotted line:
  • Is the rate guaranteed? Suppliers typically offer three types of pricing options: fixed, floating, hybrid.  Fixed rates guarantee a certain rate no matter the market price.  Floating rates are adjusted periodically to coincide with the market price.  Hybrid rates offer a combination of both fixed and floating.  Typically, the fixed rate will apply a percentage of the bill and the rest will be subject to a floating rate.   
  • What is the length of the contract?  What seems like a good move now might not be 6 months from now.  
  • Are there any additional costs?  Some of the offers may seem very low.  That may be because their published cost does not include New Jersey sales tax or other fees.  Some plans will also charge an additional fee if your monthly usage is significantly above or below your normal usage.
  • Other products or services?  Some companies provide better customer service than others.  While the gas or electricity will still be delivered through the same wires and pipes, some companies offer additional services such as energy audits or consulting services.  
I looked into this because a gentleman came to my home yesterday and tried to aggressively sell us on the idea of switching providers.  While the idea of saving some money sounded good... the guy was way too unprofessional. (He had no company van, no business card, or any information he could leave behind!) That was one offer we had to let pass.  But the overall idea sounded good so I did the research above.  
"As long as one keeps searching, the answers come." ~ Joan Baez
Since my current home is not a huge energy hog, the potential savings would be barely greater than the cancellation fee if the rate choice ended up not working in my favor.  Predicting energy rates is not a game I want to play.  However, if you are a large energy consumer you may want to do some research and make a switch.