Shopping for Alternative Electricity Suppliers?

PECO customers can save more by joining together.

You may be familiar with group buying sites that offer daily deals on things like restaurant and spa gift certificates. Wouldn't it be great if there were a way to apply the power of the group in a way that actually saves you money, like by lowering your monthly PECO electricity bill?

That's what Alphabuyer is all about. We hand select only trusted, local suppliers who are willing to offer the lowest possible prices in exchange for signing up big groups of customers all at once. The more people who sign up, the lower the price gets for everyone. Alphabuyer is free to use, free to sign up, and free to enroll in our offers.

PECO customers - here's what you need to know...

about deregulation and choosing competing electricity suppliers.

As you may know Philadelphia Electric Company (PECO) is no longer your only choice for buying electricity.   While good old PECO will remain your electric utility, responsible for the lines, meter reading, billing, service and actual delivery, you can now buy electricity itself from a host of competing suppliers.  Of course you can also continue to buy it from PECO, but you'll probably be paying more than you would from an alternative company. 

In fact PECO would be happy to see you switch, since they're no longer really in the business of making money on supply.  As PECO officials themselves have been saying in their press releases recently, "Customers may be able to save money by purchasing their electricity and natural gas from a competitive supplier if supplier prices are lower than PECO’s Price to Compare."

What this Means to You

If you own or rent your home in Philadelphia or a surrounding county served by PECO (Delaware, Bucks, Montgomery, Chester) and haven't already switched electricity suppliers, you recently saw your electric bill go up about 5%.  Going forward, PECO will continue to supply your electricity unless you switch, at a rate that can change quarterly.  PECO now buys electricity on the wholesale market to serve it's "default" customers, rather than generating it themselves, and submits a buying plan and rate request to the Pennsylvania Utilities Commission (PUC) for approval.  This is meant to ensure PECO uses a low-risk buying plan to make sure rates don't suddenly skyrocket if wholesale prices jump (a la Enron in California), but it also means PECO is unlikely to be offering the lowest rates in the market, so it pays to shop around.

Special Note to PECO Residential Heating and Off-Peak Meter Customers

The Residential Heating Rate

PECO started this program back in the 60s, when all-electric homes were 'mod'. About160,000 households, mostly in the Philadelphia suburbs, are using electric heat and qualify for this program (called the "Rate RH"in industry lingo), which gives a discounted electricity rate during the winter heating season. PECO could justify the discount at the time, since demand during the summer was growing with the wider use of air conditioning, and so had excess production capacity during the winter.

The Off-Peak Rate

This program is little-known, so if you've never heard of it you probably don't need to worry about it.  As a way of shifting some demand for electricity to off-peak hours, PECO used to allow homeowners or contracters to install a second line and meter for a portion of their incoming electric service, that would shut down service during peak demand periods (primarily the afternoon hours during the summer), and be billed at a much lower rate.  This is usually used to run a hot water heater or other major appliance that doesn't have "on demand" usage. PECO stopped new installations in 2004, but continued to bill at this rate for existing installations.  It appears as a separate "off-peak" section on your bill if you are one of these customers.

If you are in either of these programs you may do better to stay in it with PECO than to switch immediately, since alternative suppliers don't offer these special deals - but be aware, PECO is actually required to phase out both forms of special discounting as part of the deregulation process.  The discounts remain in place through this winter, but will be cut in half during the 2011-2012 heating season, and will disappear by the end of 2012.

PECO estimates this will mean about a 5% overall increase for former "Rate RH" customers in 2012 and another 5% in 2013, so Spring 2011 might be the best time to look for a better rate if you're currently getting the Residential Heating rate from PECO.  If you have an off-peak meter, you may find it pays to switch now, depending on your off-peak usage, but you should certainly look to switch before the end of next year.

Making Sense of the Confusing Electricity Market

With competition comes confusion, as suppliers use a variety of pricing and marketing techniques that make it harder to compare offers and prices on an equal basis.  What in the large print may look like an attractive rate may turn out to be "introductory" in the small print.  Check out "The Electricity Confusopoly comes to Philadelphia," where we discuss some of the techniques competing suppliers are using to make it harder to compare offers and prices. 

You should also know the Pennsylvania  PUC is doing its best to provide good consumer information and a consumer-friendly online marketplace PA  PowerSwitch.com -  for learning about and comparison shopping for electricity suppliers in PA. 

We're actually big fans of PA Powerswitch.com - the site makes it easy to find information about all the competing suppliers who are serving your utility region (the markets are broken down by electric utility company, so you can easily find out who is competing in the PECO region for example).  Powerswitch lists the suppliers and their contact information, and also shows you their current price to compare (a standard way to represent the rates - an average cost per kilowatt-hour) side-by-side with PECO's price to compare. 

Note though that your specific, actual price to compare is (surprise) more complicated.  You'll find an incredibly complex explanation of how to calculate your own exact price to compare on PECO's website.  The good news here is PECO has started calculating it for you and printing it on your bill.

You won't find Alphabuyer listed on PA Powerswitch's comparison shopping pages since we're not a direct supplier, but we intend to offer a best-in-market, simple, fixed rate better than anything you can get on your own.  We are licensed by the PUC, by the way.  (See our self-congratulatory blog announcement).

Keeping it simple is actually a key concept here at Alphabuyer. We’re about using the power of the group not only to command a better price, but also to present offers for services that are easily comparable, with no gimmicks, explained in simple terms, from suppliers who want to compete on things like superior purchasing strategy and great customer service. 

We want to make it a simple process for you to find the best deal, without having to wade through all the marketing pitches of the 22 companies that are trolling for PECO customers right now.

So take a close look at the details if you're visiting the websites of PECO's competitors.  (Some of the players with big marketing campaigns in the region are Con Edison Solutions, MX Energy and North American Power)  And remember - before you sign up with someone else, we strive to offer best-in-market pricing with reputable suppliers through Alphabuyer, so check out our offers before you commit.