Electricity is a necessary evil for everyone. Whether you own a home or a whole building, there will be costs for both the supply and the actual provider of the electricity. While you'll always have to pay for this utility, there is hope for owners who live in one of the sixteen states (the District of Columbia, Connecticut, Delaware, Illinois, Maryland, Maine, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, and Texas) that have deregulated electricity services. Due to this relatively new change in statutes, purchasing electricity utilities can now be split into different suppliers and providers. This competition can allow you to save money in the long run, if you do your research carefully.
Deciding Between a Separate Provider and Supplier: Choosing an ESCO
Due to the deregulations, consumers now can choose between alternatives to traditional electricity suppliers. Some of these alternatives are what's known as ESCOs, or Energy Service Companies, which are companies that purchase electricity supplies on the open market, the same way that your current electricity company obtains its electricity supply. The big difference is that while large, national companies charge a large markup for both the supply of electricity and charge for the cost of getting it to your home (delivery), ESCOs offer a lesser markup on the supply side of things. These companies are all competing for your dollars, so they are more likely to charge less than their competitors in order to receive your business.
In areas where there are different suppliers to choose from, the delivery company often remains the same. To use the example of New York City, if you choose an ESCO here, your electricity will still be delivered by the same ConEdison lines as those who do not choose to use an ESCO. However, while you'll still have to pay their delivery fee, you will be saving money on the electricity itself.
In many areas, there are several different ESCOs to choose from, each stating that they are the cheapest. It's important to make sure you do your research online or through brochures before ever signing an agreement with an ESCO. There may be fine print that raises the price after a certain amount of time, or that allows for fluctuating prices during times of high usage. These rates can add up to be even higher than the typical rate from the big provider in your area.
Also be wary of people who go door to door selling electricity supplies, or ESCOs. These companies often have clauses built into their contracts that make them very hard to break, and the salespeople can be quite pushy. In fact, there have even been cases of legal action regarding hard-sell tactics. As a rule of thumb, if you didn't ask them to come over to speak about their services, don't sign a contract.
How Much Can I Save?
How much you save on your electricity depends on the area you live in and the suppliers available to use in your area. While the savings will not be vast per bill, the general trend is towards a downward cost of electricity overall in the future. Savings could be within the 10% range within a few years. Calculators available on individual ESCO sites will let you know just how much you will save with your own switch!
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