More Pennsylvania businesses are realizing they have to shop around for a better electric rate to avoid impending rate increases at PPL Electric Utilities that will be as high as 36% starting January 1, 2010.

Shopping, however, can be a complex and time consuming process for business owners.  For example, the Sunbury Daily Item takes a look at how the Keystone Forging Co. in Northumberland is looking at their electricity rates.

Keystone President Joe Cipriani is still examining options to decide which energy provider is right for Keystone.

“Right now, we’re working on getting specifics — whether we want to go with a contracted rate or a market rate,” Cipriani said.

The type of electric rate to choose is one of the toughest questions for business owners.  No longer are businesses stuck with a plain vanilla rate that’s designed around a class average load shape, and doesn’t meet the unique needs of business customers, each of which uses electricity differently.  With competition, businesses can get customized rates tailored to their individual load factors and usage patterns, which can save them money.

Unlike under the monopoly utility system, where rates routinely fluctuated depending on the cost of fuel and wholesale power, businesses can now get fixed rates for 12, 24, or even more than 36 months, which are especially attractive now due to low energy prices caused by the recession.  These fixed rates, aside from locking-in today’s low rates, provide budget certainty for businesses planning their operations in the coming year, something that was impossible prior to competition.

Businesses wishing to take a little more risk can opt for a variable or “market” rate that fluctuates with wholesale energy prices.  The variable rate allows businesses to take advantage of any future drop in energy prices, but also places the risk of any future increase in rates on them.  However, energy companies have come up with innovative ways to mitigate this risk while still allowing their customers to take advantage of any drops in electric rates, through sophisticated products that lock-in certain costs but “float” other costs.

Such “blended” products take a variety of forms.  For example, one common product may fix the price of costs that are more volatile and risky to leave open — such as capacity and ancillary services.  However, the product will allow the “energy” rate, which reflects the cost of actual electric supply from the wholesale market, to vary depending on market prices. 

Another blended variation may fix the price of a base amount of electric usage, and price any usage above that threshold on variable rates that float with the market.  Still another blended option may impose a cap or “collar” to allow the customer’s electric rate to vary, but only within a predefined range.  This collar allows customers to enjoy the benefits of any price drops while limiting their risk exposure, and still giving them some budget certainty by ensuring that their electric power rate never exceeds a set cap.

So which type of electric rate is right for your business?  It’s a tough question, especially for Pennsylvanians who are shopping for electricity for the first time.  That’s where the industry experts at SaveOnEnergy.com can help find the best energy price.  Not only does SaveOnEnergy.com pit up to eight competing energy companies against each other to get you the lowest rate, its experts can help find the right type of rate for your business.  They can take the confusion and complexity out of shopping for an energy supplier by matching your individual usage and characteristics with the right electricity product, so you save the most money on your electric bill.

As noted last week, Pennsylvania electric customers in the PPL territory are facing rates hikes of up to 36% starting January 1, 2010, if they don’t shop for a lower electric rate from a competing energy supplier.  Businesses shopping for a lower rate can cut the expected increase by more than half, and save about 20% on their electric bills.

However, there are about 50 alternative energy providers competing for the business of Pennsylvania’s commercial and industrial customers.  Some of them have been in the state since customers could first shop for electricity in the late 1990s, while others have just recently been licensed by the Pennsylvania Public Utility Commission.

The challenge for Pennsylvania businesses will be finding the right energy company and the lowest rate in this competing herd of providers.  And although 50 is a large number of competing providers, they won’t automatically give you their best rate if they don’t think they have to win your business.  Electric companies will typically offer you a higher rate in their initial quote, in hopes you accept the first offer and don’t shop around to see what else is out there.

That’s why Pennsylvania businesses need to use SaveOnEnergy.com to find the lowest electric rate.

Only SaveOnEnergy.com offers business customers its one-of-a-kind retail exchange portal that pits up to eight competing electric companies against each other.  That direct, head-to-head competition means customers get the lowest rate possible, and aren’t stuck paying a higher rate than they should.  Because energy suppliers competing for customers through SaveOnEnergy.com know they must beat the price of up to seven other providers, they can’t add any extra margin to their electric rates, and have to pass on all the savings to the customer to win the customer’s business.

Customers shopping through SaveOnEnergy.com’s retail exchange portal are also assured of finding a reputable, financially sound provider that will honor their contract and term.  SaveOnEnergy.com’s rigorous screening criteria — which looks at financial resources, managerial competence, technical fitness, and customer service — eliminates fly-by night operators among the 50 certified suppliers in Pennsylvania that may be offering a low teaser rate, but wont be able to stand behind it in a year.  That means business relying on SaveOnEnergy.com to find the best energy price don’t have to worry about their energy provider going out of business or jacking up rates, because SaveOnEnergy.com’s industry experts have vetted all of their suppliers, and only list top-flight firms.

PPL Electric (Pennsylvania Power and Light) confirmed last week that business customers who do not choose a new energy provider will see their rates increase anywhere from 18% to 36% on January 1, 2010, when a decade-long rate cap is due to expire. 

As previously noted, large rate shocks for Pennsylvania electric customers have been expected by PPL for some time, based on preliminary electric pricing data.  However, last week PPL completed its final purchases to supply its so-called “default service” customers — or customers who do not choose an alternate electric company — and was able to calculate the final impact of the higher rates.

PPL said monthly bills will increase on average about 18.4 percent for small businesses and about 36.1 percent for mid-size businesses.  The projections are based on a new, blended rate of 10.053 cents per kilowatt-hour for small and medium-sized business customers.

“Under current market conditions, customers may be able to secure better pricing by shopping and selecting an alternative retail energy supplier,” PPL said last week.

That’s because PPL’s new prices are “blended” over several years of buying electricity.  Accordingly, PPL’s electricity rates include power that was bought — and priced at — record high levels of energy prices in 2007 and 2008.

Energy prices have plummeted since 2008, but customers can’t benefit from those savings by remaining with PPL.

However, competing energy providers are able to pass the current low prices along to customers, because they haven’t locked in any power purchases yet.  That means customers can save significantly on their electric bills simply by shopping for a new electric company and lower rate.

Shopping for a new energy provider can easily save business customers 20% based on current pricing, and depending on the customer’s usage and size, even larger amounts.

To ensure customers get the lowest rate possible, SaveOnEnergy.com makes energy suppliers compete head-to-head to win customers’ business.  SaveOnEnergy.com’s exclusive retail exchange portal allows the customer to shop for a low electric rate any time day or night, and pits up to eight competing electric companies against each other.  Through SaveOnEnergy.com’s exchange portal, a customer’s information is instantly transmitted to competing providers, who contact the customer directly with their best rates.  With just a few clicks of the mouse, customers can put the power of competition at work for them, drastically cutting the time and hassle of trying to get individual supplier quotes.  Just as important, SaveOnEnergy.com screens all of its energy suppliers, to ensure that customers only receive service from stable, reputable energy suppliers that will be able to offer customers significant savings long into the future.  With electricity shopping a new experience for most Pennsylvania businesses, using SaveOnEnergy.com to find the best electric provider ensures that customers don’t end up with a questionable or unproven operator in their quest save money on their electric bill.

“Retail electric providers in Texas’ deregulated market are offering residential rates that in many instances are lower than those of some municipal power companies, electric cooperatives and investor-owned utilities that are still under rate regulation,” the Forth Worth Star-Telegram confirmed in a new survey. 

Noting that Texas electric providers have sharply lowered rates in response to a plunge in prices for natural gas, the Star-Telegram reports that, “many consumers in Dallas-Fort Worth and other deregulated markets have been entering into fixed-rate plans of one year or longer to lock in lower rates before natural gas prices bounce back, as energy analysts have forecast will occur once the economy rebounds and gas supplies tighten.”

In a recent review of energy prices, the Star-Telegram found that the average rate for customers in the Dallas-Fort Worth area was 10.64 cents per kilowatt-hour, and that the average rate for the 50 cheapest plans was 9.62 cents per kilowatt-hour.  Five plans were under 9 cents, the Star-Telegram reported.

The Star-Telegram found 110 different electric rates and products available for customers in the Dallas-Fort Worth market.  That kind of clutter can be intimidating to a customer shopping for a first time, and why customers can use SaveOnEnergy.com to quickly and easily compare rates.  SaveOnEnergy.com screens the lowest rates from Texas electric companies and only recommends providers high levels of customer service, so customers can have peace of mind when choosing a new energy provider.

“Many of those deregulated rates are lower than rates offered by some munis, co-ops and IOUs [investor-owned utilities] operating outside the deregulated market overseen by the Electric Reliability Council of Texas,” the Star-Telegram noted.

The Star-Telegram survey showed average rates of 9.58 cents for five regulated IOUs; 10.43 cents for six munis; and 10.88 cents for six co-ops.

But customers have to switch electric providers and shop for the best rate to save money, the Star-Telegram noted.

Many customers who never have switched from their longtime “legacy” electric utility might be paying 14 cents or more, Tim Morstad, associate state director for AARP Texas, told the Star-Telegram.

In other words, shopping for a lower electric rate could save these customers as much as $50 per month, or $600 per year, based on average residential usage of 1,000 kilowatt-hours.

“Some people have just cut the same check to the same company for so many decades they’ll keep doing that,” instead of switching, Morstad said.

That’s why customers need to compare electric rates on SaveOnEnergy.com, to ensure that they are paying the lowest rate for electric service.  SaveOnEnergy.com lets customers compare rates anytime day or night, with just a few clicks of the mouse, to make finding the lowest electric rate simple and easy.