With electric rate caps expiring for the remaining 60% of Pennsylvania customers on January 1, 2011, dozens of new energy providers are flooding the market trying to profit from switching customers to a lower energy rate.

While that’s good news for customers because it means competition will drive electric rates down, it also means customers must be vigilant in finding a reputable supplier among the over 100 electric companies now vying for customers’ business.

The Pennsylvania Public Utility Commission reports that there are 124 active and licensed electric generation suppliers as of June — an increase of nearly 50 suppliers since the start of the year, as new competing energy providers eye serving customers hoping to avoid utility rate hikes of up to 30% by switching electric suppliers.  There’s about 20 more suppliers with license applications still pending before the Public Utility Commission, and there could be as many as 150 energy suppliers in the market before the year is out.

So how do Pennsylvania customers — the vast majority of which have never shopped for an electricity provider before — find the right supplier.  That’s where the industry experts at SaveOnEnergy.com come in, who can not only help customers find the lowest energy rate, but can make sure customers find a reputable and trustworthy energy supplier.

In general, customers should have no qualms about choosing a new energy supplier.  Regardless of who the customer chooses, the local utility — PECO, PPL, etc. — will still deliver your power over their transmission lines, and will still respond to outages and other service disruptions as they do now.

However, just as customers wouldn’t pick their doctor or mechanic without doing research and asking around, picking the first energy supplier that offers a low rate is not the wisest decision.  Selling electricity is a complex and highly technical business, and not just every venture capitalist can build a successful start-up that can serve customers for the long haul.  In other states where customers can choose their energy provider — Texas, Ohio, Maryland, and even in Pennsylvania in the 1990s — energy suppliers have left customers stranded on higher rates by not living up to their contracts or going out of business, because of the volatility in the electric and natural gas markets.

SaveOnEnergy.com helps customers weed out weak or unstable energy suppliers, and only recommends established suppliers with track records of providing customers with savings over the long haul.

SaveOnEnergy.com’s seasoned management team, with decades of experience in the energy industry, screen all the players in the market, and search for electric suppliers with proven financial stability and established and trustworthy leadership with significant experience in serving satisfied customers.  SaveOnEnergy.com pours through public and proprietary market data to vet each and every supplier, to ensure they aren’t taking risks with their customers’ money, or gambling on the market. 

By vigorously screening and recommending energy suppliers for customers, SaveOnEnergy.com ensures that when customers use SaveOnEnergy.com to find a low electric rate, there won’t be any surprises down the line; customers will be assured of saving money on their electric bill for 12, 24, or even 60 months.  Taking just a few minutes to find a low energy rate on SaveOnEnergy.com takes the guesswork out of finding the right energy supplier, and gives customers peace of mind that’s not available when they go it alone.

Pennsylvania businesses looking to save money on their electric bills when rate caps come off at the remaining utilities — including PECO in the Philadelphia area — will be bombarded with offers promising lower electric rates from new electric generation suppliers as well as these suppliers’ marketing agents and brokers.  However, only SaveOnEnergy.com, an independent consultant, can provide customers with low electric rates customized for your business that result from competing energy providers battling head-to-head to win your business.  Only SaveOnEnergy.com’s exclusive retail exchange portal assures customers of finding the lowest electric rates in the market, and not the higher rates of a broker’s preferred supplier. 

Starting January 1, 2011, business customers at PECO, Met-Ed, Penelec, and West Penn Power (Allegheny Power) are likely to see electric rate increases as high as 30% if they stay with their utility for their electric supply.  Fortunately, with competition among new alternative energy companies, businesses can lower their electric bills and save thousands, if not millions, each year. 

With the impending end of rate caps at these utilities, over 50 new sales channels, many of them start-ups, are marketing electric supplies to customers.  They all promise lower rates, but many of these sales agents work with only one supplier, or only a handful of preferred suppliers that provide these agents with higher commissions.  It means customers aren’t assured of getting an impartial analysis and may not receive the lowest rates.

SaveOnEnergy.com is different.  Only SaveOnEnergy.com offers business customers the chance to get competing electric rate quotes from up to eight screened and reputable energy providers, ensuring that competition drives the customer’s electric rate lower.  All business customers have to do is take a few minutes to enter their information on SaveOnEnergy.com’s commercial exchange portal, and the information is instantly transmitted to the competing energy suppliers, who then develop customized low rates and contact the customer directly.  Because the electric companies on SaveOnEnergy.com know they are competing against seven other energy suppliers, they are forced to provide their lowest rate to the customer, with no padded margin or profit.  Other electric brokers working with fewer energy providers can’t provide the same low rates because there’s less competition for your business.  Furthermore, these other brokers may not bid your electric load individually, and instead may only quote a more expensive “standing offer” that the energy supplier provides to them to solicit business.  This all means using another broker to choose an electric company will end up costing you more money than using SaveOnEnergy.com to make energy suppliers compete for your business.

During last week’s KEMA executive forum in Irving, Texas — a gathering of thought leaders and movers and shakers in the retail energy industry — executives all called for more innovation — both technological and in customer service — to support the growth of retail energy choice in America.  With its unique connection to customers, providing them with a one stop shop to compare competing energy plans and find the lowest power rate, SaveOnEnergy.com is poised to be a driving force in making retail energy providers live up to their promises of innovation, and provide a better customer experience to energy consumers. 

Chris Weston, CEO of Direct Energy for just under a year, keynoted the KEMA conference by telling energy companies that they have to be, “better with the service we provide to our customers.”  Furthermore, to fend off opponents of choice in the energy industry, Weston stressed that energy providers must innovate.  “We are at an important point of inflexion for our industry, created by smart meters and environmental awareness and we must take advantage of this situation, cementing the benefits of competition and becoming more than a line on the bill,” Weston said.  If energy suppliers can not live up to the promise of better customer service and innovation, the industry risks backsliding in a return to the monopoly system, Weston said.

Thousands of energy consumers looking for a new energy supplier use SaveOnEnergy.com every month to compare not only rates, but value-adding product features like airline miles, rebates, and green energy.  However, SaveOnEnergy.com only lists the premier energy suppliers in the industry — companies that its experts have vetted and companies that customers can trust.  Gaining a listing on SaveOnEnergy.com, by proving its product is worthy to be considered by customers, is a top goal for energy providers looking to win more customers in a crowded and fragmented market.

That puts SaveOnEnergy.com in the position to represent customers and demand innovation from energy companies.  Much like Wal-Mart uses its thousands of stores and millions of customers to force vendors to be greener and more efficient with packaging and shipping as a condition of gaining access to Wal-Mart’s coveted shelf space, SaveOnEnergy.com similarly places high standards on suppliers for recommendation on its energy comparison website.

Right now, that means only energy suppliers with high levels of customer service, unique billing and payment options (online bill pay, credit card payments), and value-adding bonus features (airline miles, prepaid gift cards, green energy, etc.) are recommended.  In the future, as smart meters support more advanced products, it means only electric companies offering customers new ways to manage and lower their electric bills through energy efficiency, unique rate designs, and in-home monitoring devices will win SaveOnEnergy.com’s recommendation. 

Those energy companies that don’t innovate and don’t offer added value to customers won’t have access to SaveOnEnergy.com’s thousands of monthly shoppers.  This will force them to re-invent their products, come up with new ideas, and ultimately create a better customer experience in their efforts to win a listing on SaveOnEnergy.com and gain customers.  Additionally, bad actors who mistreat customers or don’t provide a good customer experience will be shuffled out of the industry quickly, as they will be barred by SaveOnEnergy.com, choking off their ability to find new customers and stay afloat.  SaveOnEnergy.com thus acts as a filter so only the best, most customer-friendly suppliers are able to find and win customers, rewarding these energy providers for their commitment to customers, and forcing other energy suppliers to strive to the same high levels of customer service.

Through SaveOnEnergy.com, Weston’s vision of an innovative and customer-responsive industry of energy companies offering customers the best services and the lowest rates can be reached.

Recently, the Public Utility Commission of Texas (PUCT) — the state’s utility watchdog — said that it will open an investigation into how Texas energy companies market their services under different trade names.  Several PUCT Commissioners expressed concern that the current ability of Texas energy providers to use up to five trade or “assumed” names — in addition to their legally certified name — can be confusing to customers trying to understand who is trying to sell them power. 

It’s simply another reason why customers are better off getting help in choosing the lowest electric rate, by relying on an industry expert like SaveOnEnergy.com.

During a recent PUCT open meeting, Commissioner Donna Nelson noted that some smaller electric providers in Texas are simultaneously marketing under several names.  The use of multiple names can confuse customers and frustrate their efforts to check an energy supplier’s track record, complaint history, and compliance, Nelson said.  Ultimately, the use of multiple trade names can hinder a customer’s understanding of what company is truly trying to sell them power.

There are legitimate reasons why an electric company may want to use one or two “assumed” names in marketing electricity.  For example, the company might be part of a larger conglomerate whose name otherwise does not connote their presence in the electric industry.  Another example is that an electric company may want to differentiate one of its product lines –such as renewable energy service or prepaid service — by branding not only that product with a unique name, but by offering the product exclusively under a different trade name.

Unfortunately, there are also less legitimate reasons for an energy supplier to use multiple assumed names.  As cited by the PUCT, using multiple names, or frequently changing names, could be used to distance an electric company from a history of complaints or a bad public image.  Certainly, there are examples of such actions in other industries.  Although not completely analogous (since it involved a merger and change in corporate structure and not simply the creation of a new assumed name), the rise of the brand AirTran, in place of the much-maligned ValuJet, is a prime example of a company seeking to shed baggage associated with an old name.

Customers, however, can avoid being duped by multiple trade names by using SaveOnEnergy.com, a trusted industry expert, to find the lowest electric rate.  SaveOnEnergy.com’s experts diligently research and screen all energy providers, and track each different supplier’s trade and assumed names.  Only reputable electric companies with proven tracks records of providing customers with low rates and high levels of customer service are recommended by SaveOnEnergy.com, so customers don’t have to worry about whether their electric supplier is just a shell company for another provider trying to hide its history.

A clearer picture has emerged for how many California businesses will soon have the ability to choose their electric company, and how businesses will be able to exercise this new right.

As we’ve previously noted, legislation has expanded the right of California business customers to choose their energy provider, but the law must still be implemented by state regulators.

Under a draft decision from the California Public Utilities Commission, the new expanded limits on electric choice (known as “direct access”) would be phased in over a four-year period.  While the draft must still be approved by the full Commission, it represents a consensus of all parties on the major issues related to electric choice, and is not likely to change substantially.

The draft would set the maximum amount of annual direct access load as 11,710 gigawatt-hours (GWh) at Southern California Edison, 9,520 GWh at Pacific Gas & Electric, and 3,562 GWh at San Diego Gas & Electric.  However, there are numerous California business customers already shopping for electric companies due to grandfather clauses enacted in 2001.  These customers’ load will be subtracted from the maximum caps listed above, leaving the following amounts of new direct access load available at each utility: 3,946 GWh at SCE, 3,946 GWh at PG&E, and 462 GWh at SDG&E.

Starting around this April, the utilities will commence an “open enrollment” window in which customers may declare their intent to choose their energy provider, and reserve space under these new caps.  Space will be allocated on a first come, first served basis.  Given the limited space available (especially at SDG&E), making a quick decision will be crucial for businesses wishing to choose their energy supplier.

Under the phase-in process, only 50% of the total available space will be made available for new direct access customers in 2010, and a “gold rush” has been predicted as business customers are eager to leave high utility electric rates in favor of cheaper electric prices available through choice.

Being among the first businesses to send a Notice of Intent to shop for your electric supply will be paramount in ensuring you will have the right to save money on your energy bill.  At the same time, making a quick decision can be difficult for many businesses who have never chosen their electric company before, as choice has been suspended in California for a decade.  That’s where SaveOnEnergy.com can provide invaluable help to California businesses.  For no charge or fee, SaveOnEnergy.com can help you find the right energy supplier before the open enrollment period begins and the floodgates open.  Only SaveOnEnergy.com can use its one-of-a-kind retail exchange portal to pit up to eight energy providers against each other in direct competition for your business, getting you the lowest electric rate and maximizing your savings.  And SaveOnEnergy.com also screens all its energy suppliers against a rigorous criteria and only recommends reputable providers, so you don’t need to worry about enrolling with a fly-by-night operation, or taking months to research all the electric companies yourself and possibly missing the enrollment window.

Competition in the Texas electric market means that energy providers have created a wealth of new products and services designed to meet customers’ individual needs and lower their electric bills.  Such new products include fixed priced plans which give customers budget certainty, time-of-use plans that let customers take advantage of lower rates during off-peak times, seasonal rates designed for customers with electric heat, prepaid products for customers looking to avoid costly deposits, and many more.  Soon, Texas electric companies will be offering electric plans designed specifically for customers with plug-in electric vehicles.

One of the newest products introduced last year by several Texas energy companies is a program where customers with distributed generation — like rooftop solar panels — may sell their excess generation back to their energy supplier.  Not only do these customers save money by generating their own power, they receive a credit when they generate more power than they need, further reducing their monthly electric bill.

However, such product innovation is typically only available in parts of the state where customers can choose their electric company.  While about 85% of Texas’ electric customers have such choice, several areas, such as El Paso and San Antonio, do not have electric competition, and customers cannot choose their energy supplier.  That means customers are stuck with whatever their monopoly utility offers them, and there is no product innovation or money-saving alternatives aside from what the utility decides to do. 

For example, El Paso residents with rooftop solar systems can’t contract with an energy provider to buy back their excess solar generation, like customers in Houston, Dallas and Corpus Christi can do under electric competition.  State Sen. Eliot Shapleigh noted that in Houston, thanks to the solar buyback program available under electric choice, some customers’ monthly electric bills were actually credits of $20 — that is, they had zero electricity charges, and were being paid $20 per month to credit their solar generation.  Customers with electric choice can make providers compete for their excess solar power, and be paid a price anywhere from 7.5¢ per kilowatt-hour to 10¢ per kilowatt-hour for their extra energy.

El Paso Electric, meanwhile, remains a, “1950s electric company,” Shapleigh writes, and does not offer the innovative, money-saving options that are available under electric choice.

The Electric Reliability Council of Texas (ERCOT), which runs about 85% of Texas’ electric transmission system, said recently that the state is projected to have enough power through 2013.  Starting in 2014, based on current projections, the state could dip below a minimum 12.5% “reserve margin,” or the amount of extra power the state requires in excess of projected demand as a safety net.  Currently, the 2014 reserve margin is forecast at 12.3%. 

The reason for the drop is the delay of a new power plant that was originally scheduled to come online in 2013, but has been pushed back due to economic considerations.  Specifically, the Cobisa Greenville Project, a 1,792-megawatt natural gas-fired plant, won’t go into service in 2013 as originally planned.

One of the main reasons for the delay in new power plants is the low energy prices currently being enjoyed by Texas electric customers.  While the economic recession and competition among electric companies have pushed rates below 10 cents in most areas, the recession has also stalled many power projects as developers wait until Texas power prices rise with the economic recovery before moving forward with their projects.

However, while the reserve margin is projected to dip below the minimum level needed for reliability after 2013, there is no cause for great alarm, because there is sufficient time for power developers to respond to market signals and build new generation in time to meet reliability needs.

In fact, it is typical for power projections five years out to show capacity below the minimum reserve margin.  For example, in 2007, ERCOT projected that for 2010, reserve margins would be only 8.3%, well below the minimum of 12.5%.  However, as 2010 grew closer, generation developers responded to market signals and built new generation to meet the projected demand.

Here is a look at how the forecast reserves for 2010 increased over time, as new power plants were built in response to the forecast demand.

Date of Forecast                         Projected 2010 Reserve Margin

May 2007                                  8.3%

Dec 2007                                   14.0%

May 2008                                  17.3%

Dec 2008                                   21.2%

May 2009                                  20.1%

Dec 2009                                   21.8%

As can be seen, while 2010 supplies were projected to be below the reserve margin three years ago, new projects came online to meet, and exceed, the forecast demand.  This market response is one of the many benefits of the competitive Texas electric market, as customers no longer pay for extra power that isn’t needed.

Under the traditional monopoly system, power plants were planned years in advance, based on forecasts of demand, which, like any forecast, were simply educated guesses.  That often meant more power plants were built than were actually needed.  But customers still had to pay to build those power plants because monopoly utilities were guaranteed a regulated rate of return.  Another problem often encountered was known as the “gold plating” of the electric system — or building many more power plants than needed to serve customers to increase a utility’s regulated rate base, on which it made profits.  With competition, generation developers do not earn a guaranteed rate of return, which means customers only pay for plants that are actually used, saving them millions of dollars annually.

As we’ve noted the past two weeks, soon a lot more California businesses will be able to choose their electricity company under a process known as “direct access,” which allows new energy providers to compete for customers’ business.  That competition drives down power prices, and can save California businesses thousands of dollars, if not millions, on their energy costs.

In fact, many California businesses are already enjoying the savings possible from shopping for electricity, under a policy that grandfathered them and has allowed them to choose a competing energy company since the late 1990s, while other customers have been denied this right during a suspension of direct access.

Take, for example, the California State University (CSU) system.  Len Pettis, Chief of Plant Energy and Utilities for California State University, has said that, “[d]irect access has afforded CSU a portfolio of energy supply options and cost certainty not available from the utilities.”

In fact, CSU has saved over $30 million from shopping for electricity for nearly a decade — savings that have been used to help meet enrollment targets, save jobs, and reinvest in energy efficiency measures on campuses.

Bill Dombrowski, President of the California Retailers’ Association, added that, “California’s retail business owners overwhelmingly support a return to customer choice as a means to energy management.”

“Choice, or direct access as it is referred to, provides innovation and management opportunities that will translate into lower costs for goods,” Dombrowski explained, pointing to a problem under the current suspension of direct access.

“The problem today is that some retailers have it, but because of the suspension, others who want to exercise choice can’t have access to the same benefits.  Allowing all retailers to have the same low cost electricity options is a matter of commercial fairness,” Dombrowski noted.

Unfortunately, the bill expanding direct access (SB 695) does not extend the ability to shop for a lower electric rate to all non-residential customers, and only expands the amount of customers eligible to shop subject to a cap.  That makes it crucial for California businesses to be ready to shop for a new electric service provider in about March or April, when the California Public Utilities Commission will likely take the first step in allowing new customers to shop for electricity.  Working with SaveOnEnergy.com to monitor the re-opening of direct access and find the right supplier can ensure customers that they are able to switch to a lower electric rate immediately when the cap opens, ensuring they are not left out.

Still, even though it is limited, “[t]he passage of SB 695 enables California businesses to gain greater control over one of our largest costs – energy – allowing us to place greater focus on building our businesses and creating more California-based jobs,” said Glenn Barrett of SUPERVALU, Inc.

More California businesses will soon have an opportunity to save money on their electric bills by shopping for an alternative energy provider, thanks to legislation passed in the last session.

Since 2001, only a limited amount of California businesses and residents have had the ability to buy electricity from a competitive electric service company and save money on their power bill.  Due to the energy crisis, “direct access,” or the ability to shop for your energy supplier, was suspended for new customers.  Customers who were buying electricity from a competitive supplier at that time were grandfathered, and have had the ability to shop for a lower electric rate since that time.  That has given some businesses a competitive advantage, because they could lower one of their largest costs, energy, by having different electric companies compete for their business.

More businesses will soon have this ability to lower their costs by shopping for their electricity supply thanks to SB 695, passed during the most recent legislative session.  The bill requires the California Public Utilities Commission (PUC) to expand the number of business customers who are eligible to shop for an alternative power provider, subject to a cap.  Under the new law, the PUC must phase-in new, higher caps on the number of customers who may shop for electricity, with the caps specific to each utility service territory.  The cap of kilowatt-hours served by competitive electric companies shall be equal to the maximum total kilowatt-hours supplied by competitive providers in a utility service area during any sequential 12-month period between April 1, 1998, and the effective date of SB 695.  The phase-in will occur over a period of three to five years. 

The PUC has not yet started a proceeding to implement the expanded electric choice for business customers.  However, if experience in other states in any indication, business customers will want to be ready to strike once the PUC sets out a process for new shoppers, to avoid being shut out of shopping for electricity due to the cap.  In Michigan, a 10% cap on electricity shopping was instituted in 2008.  At Consumers Energy, the cap was hit in just seven months, leaving all remaining customers paying higher utility electric rates, instead of shopping for a lower rate from a competing energy provider.  With California’s high energy prices, businesses will have to act fast to ensure they don’t get shut out of their opportunity to shop for a lower electric rate.

Time is running out for Pennsylvania businesses in the Lehigh Valley to avoid rate hikes of up to 36% at PPL Electric Utilities starting January 1, 2010, as the decade-old rate caps expire.  Customers can avoid these rate shocks and save 10-20% on their electric bills by shopping for a new energy provider, but they have to act fast for the change to take effect in time to avoid the higher prices at PPL.

Pennsylvania businesses may choose to buy their electric supply from an alternative energy generation supplier to save money on their electric bills.  However, once the customer chooses their new electric company, the switching process can take up to 45-60 days depending on the customer’s billing cycle and when the switch is submitted.  Switches are typically performed when a customer’s meter is read, so that the change to a new supplier coincides with a new billing cycle.  Billing cycles can vary from 28 days to up to 35 days depending on where weekends and holidays fall during the month. 

That means a customer who switches to a new energy supplier may have to wait 35 days for it to take effect, in cases where they submit a switch just after their last meter read.  Furthermore, there are another dozen or so days built into the switching process for the new energy company and PPL to communicate data back and forth and confirm the switch.  That means a switch may be delayed by about 45 days from the time the customer chooses a new energy provider.

In other words, in order to ensure that a switch occurs before the expiration of rate caps on January 1, 2010, switches need to be submitted prior to about November 15, 2009, meaning customers have precious little time to shop if they still haven’t chosen a new electric company yet.

Fortunately, SaveOnEnergy.com can expedite the process of finding a new energy supplier for Pennsylvania businesses, all while ensuring customers still get the lowest rate possible, and find a financially sound electric provider.  SaveOnEnergy.com’s exclusive retail exchange portal allows Pennsylvania businesses to have up to eight electric companies competing head-to-head for their business, so customers get the lowest rate.  All customers have to do is take a few minutes to submit some information on their business and electric usage on SaveOnEnergy.com’s exchange portal, and the information is instantly transmitted to up to eight competing electric companies.  Energy suppliers then directly respond to the customer with their best rates, streamlining the process and ensuring that customers can still shop around for the lowest rate while making a decision in time to take effect prior to January 1, 2010. 

Getting eight competing quotes from electric companies without SaveOnEnergy.com may takes days, and customers would then have to take additional time to research each supplier to ensure that they were looking at a reputable company and not a fly-by-night operator.  Such research could take weeks for business owners who are busy serving their customers, delaying a switch beyond the January 1, 2010 rate hike.  Because SaveOnEnergy.com screens all of its energy providers against rigorous criteria, customers can be assured that they find a stable, competent energy supplier, but in a fraction of the time it would take to navigate the market on their own.