I would agree that some of the companies out there provide what some would call a "teaser rate" for a short term. Some also charge an enrollment fee. Looking at the lowest rates and the conditions attached to those rates brings to mind the expression "if it is too good to be true, it probably is."
My Evaluation Approach
The beginning point in my evaluation is my previous year's electricity cost. In 2013 I spent about $750 for electrical service, or an average of $63 each month. This expenditure includes:
- Electricity Supply Services, about 47% of my monthly bill.
- Delivery Services, about 42% of my monthly bill.
- Taxes and Other, about 11% of my monthly bill.
The actual difference in projected costs for Electricity Supply Services is about $156 or $13 per month. That's the value of potential savings if I could find an alternative supplier. Obviously, spending more than this amount in monthly fees to achieve a savings is not a good idea unless the rate is so low as to offset the fees.
Now you might say that I am spending too much time to save but $13 or so per month. However, I would suggest that we consider this type of "rate creep" and the impact on personal finances over a period of years. I'm one who promotes planning, preparation, budgeting and debt avoidance.
Choosing Electric Providers
Here in Illinois we have the Citizens Utility Board (CUB) which has a website. That website includes a list of possible providers and their rate structure. Some municipalities have used "Municipal Aggregation" to purchase electricity on behalf of residential and small business customers. I've included a link to CUB's list of communities which use this approach. If you are in your community's "Municipal Aggregation" program then the following does not apply to you. Your community has chosen your electric provider.
Reviewing the CUB website provides a list of providers which can be compared. The list may not include everyone and it may not be current. The website is but a starting point and it is necessary to contact the provider before making a final decision. I've included a link at the end of this post.
Prices published on the CUB website vary from $0.0523 per kWh to above $0.10 per kWh. Some are fixed rate, some are variable rate, some include a monthly fee and some include an exit fee.
What did I do?
I decided my provider would have the following rate structure:
- Fixed monthly rate
- No monthly fee
- No exit fee
- Rate below ComEd's published rates
ComEd's rates, according to the CUB website will be "7.596 cents per kilowatt-hour (kWh) rate from June 2014- September 2014 and 7.42 cents per kWh rate from October 2014-May 2015."
With the above criteria, many provider were eliminated from the CUB list. The remainder were scrutinized by term.
The next step was to take the most promising suppliers and check their website. This is a critical step because rates do change and the CUB site may not be current. I then contacted the supplier that met my requirements and enrolled.
CUB Website Links
Clicking will open a New Window> CUB Alternative Electric Suppliers List With the above criteria, many provider were eliminated from the CUB list. The remainder were scrutinized by term.
The next step was to take the most promising suppliers and check their website. This is a critical step because rates do change and the CUB site may not be current. I then contacted the supplier that met my requirements and enrolled.
CUB Website Links
Clicking will open a New Window> CUB Municipal Aggregation List
Is that $63 a month a typographical error? What's your Nicor bill each month?
ReplyDeleteThanks for this, Norm.
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