How to shop for lower electric rates with price increases coming

PUCO ‘apples to applies’ web site offers look at alternative retail providers

The price of electricity is going up everywhere, but one state utility regulator thinks it’s still worth the effort to shop around.

“I think there are competitive rates out there that people can shop for,” said Barbara Bossart, chief of the reliability and service analysis division at the Public Utilities Commission of Ohio, Ohio’s regulator of electric and other utilities.

Inflation, natural gas cost increases, supply chain problems and other factors, like growing post-pandemic demand for power, complicate the picture. Electricity is simply more expensive these days.

But AES Ohio’s planned increase appears to be dramatic. The current AES Ohio “standard offer” price is 4.805 cents per kWh (kilowatt-hour). Starting June 1, the price will be 10.91 cents. That’s a monthly increase of more than $60, if you’re using 1,000 kWh a month.

That will be the price paid by AES Ohio customers who have not chosen an alternative supplier or who aren’t in a community aggregation program.

A kilowatt-hour is how much energy you need to run a 1,000-watt appliance for an hour. A 100-watt bulb takes 10 hours to use a kilowatt-hour of energy. A 2,000-watt appliance takes 30 minutes.

American Electric Power in Columbus is set increase its rate by about 2 cents per kWh, the Columbus Dispatch reported. Duke Energy and FirstEnergy are also looking at increases.

Bossart acknowledges that alternative rates “may not be as low as they have been in the past, just due to the market. But there are some competitive rates out there.”

If you’re comparing prices, you’re not alone.

Kettering City Councilman Bruce Duke said city leaders are starting to explore joining an electricity aggregation program to set lower rates for residents.

“Citizens are calling council people and saying, ‘Hey look, what are we doing about this?’” Duke said. “We see Dayton has done it, Beavercreek has done it, why can’t we do it?”

City Manager Mark Schwieterman agreed that Kettering is hearing questions. The city is only starting to examine its options, beginning talks with the Miami Valley Communications Council, which has eight member cities. Schwieterman said he also has met with representatives of the Sustainable Ohio Public Energy Council.

Last year, Dayton joined that council, a nonprofit group of governments that works to secure fixed-term electric rates.

In March this year, in AES Ohio service territory, competitive suppliers served 234,789 customers who shopping around for service, according to PUCO customer counts. In the same month, 299,821 customers were served by AES Ohio’s standard service offer.

Prices rise in June

Mary Ann Kabel, a spokeswoman for AES Ohio, emphasized that the higher standard service prices will be in effect for just one year. And she said the company has no control over the price that resulted from this year’s energy auction.

Local electric utilities like AES Ohio hold auctions to provide the electricity needed to serve retail customers, typically residents and small businesses who have not switched to another retail provider. Wholesale suppliers who bid the lowest prices win the auctions.

This year’s auction yielded the new, higher rate.

Kabel said as well that AES Ohio has the lowest rates in the state with regard to delivery charges, bringing electricity to homes via poles, wires and other infrastructure. (She referred customers to a company web site on the issue,

AES Ohio offers customers what it calls “budget billing.” The company calculates bill amounts based on a household’s usage history. The household is billed the same amount each month. In August, customers settle up with either a credit or balance due.

“We are working diligently to continue identifying and implementing ways to keep energy reasonable,” Kabel said.

In response to questions from the Dayton Daily News, the Office of the Ohio Consumers’ Counsel said it has found that, in the aggregate, consumers generally save money by enrolling in the utilities’ standard offers as compared to enrolling with energy marketers.

‘Do your homework’

When shopping, you’ll want to compare alternative supplier offers with the “Price to Compare” shown on your electric bill.

Bossart advises people to know some basics before shopping. Who is your electricity supplier and what is your “price to compare?” The easiest way to do that is to have your bill handy, she said.

She points to language on the AES Ohio customer bill that says: “In order for you to save money off of your utility’s supply charges, a supplier must offer you a price lower than AES Ohio’s price of 4.8 cents per kWh, for the same usage that appears on this bill.”

In June, that price rises from 4.8 cents to 10.9 cents per kWh.

Armed with that information, go to the web site (sometimes called the “apples to apples” web site), Bossart said.

She points first-time visitors to the “frequently asked questions” section at the top right. Then, go to “compare offers” at the top of the site’s front page. Click on “compare electric offers.”

Next, if you’re a residential customer, bring down the menu on “residential” at the top. AES Ohio customers looking to shop around can click on “AES Ohio.”

Scroll down to see a chart with available offers from an array of suppliers, as well as contact information for those companies, including phone numbers.

The first number you might want to see is easy to spot. Looking at the chart, notice that in the column next to listed suppliers are kilowatt-per-hour rates.

Following that is the rate type (fixed or variable) and information on whether there’s an introductory rate, length of contract and other variables.

If you want to narrow down your options, click on a number of companies, then hit “click to compare” at the top, which should put that shorter list of suppliers in a new window.

Questions to ask

When switching, Bossart says consumers should be aware of introductory rates which are followed by higher rates. They should also look for termination fees.

PUCO offers shoppers a list of questions they should ask new suppliers.

Two of the first questions to ask new suppliers: Is your price fixed or does it change? Does an introductory rate rise later on?

“Consumers should beware of short-term ‘teaser’ rates offered by marketers,” the Consumers’ Counsel’s office said. “Teaser rates may at first look good, but can be subject to later significant price increases.”

“Do your homework,” Bossart said.

To sign up, call a new supplier at the phone number provided on the chart. Be sure to read and understand any new contract. Your new supplier will contact your current supplier.

Your local electric utility should send you a letter confirming the supplier you have chosen. If the information is correct, you’re set. If it isn’t, contact the utility and request that the switch be stopped. You have seven days from the postmark date of the letter to make changes.

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