The Difference is Convenience and Rates
The Pennsylvania Public Utilities Commission, known as PA PUC, is the government entity in the state of Pennsylvania that regulates providers of utility services, including electric and gas companies, telephone companies, water and wastewater, as well as trucking and rail companies.
PA Power Switch is the energy rate comparison chart created and maintained by the Pennsylvania Public Utilities Commission. The goal of the PA Power Switch comparison chart is to give Pennsylvania residential and commercial energy consumers an easy and straight-forward tool to compare price options and contract terms from energy suppliers that provide services in respective zip codes across the state.
PA PUC regulations impact pricing, maintain quality of service, provide safety, and support a healthy competitive market. It’s important for Pennsylvania customers to track PA PUC regulations as they impact the energy market as well as every home and business in the state.
The “Price to Compare” chart is a valuable tool for residential consumers who are looking to compare energy rates. The PA PUC requires each energy supplier in Pennsylvania to publish two (2) rates to the residential pricing tables – giving residential consumers a choice of suppliers and rates.
Unfortunately, Pennsylvania businesses are not as fortunate. The PA PUC does not require the energy suppliers to publish commercial rates. Without this important requirement to publish rates each day, business customers researching energy rates do not have an easy to use chart to compare suppliers, plans, and rates.
To compound the energy shopping challenge, most businesses have significantly higher energy usage (than residential homes) resulting in a much higher energy bill each month. Additionally, businesses also operate in a wide variety of industries – from retail to service; from manufacturing to restaurants – with very unique and differentiated patterns of energy usage.
In general, energy suppliers are risk averse – meaning, they require commercial entities – small businesses to enterprise level companies – to submit information on their energy usage so that the supplier can customize an energy plan for the business. In developing a plan, each supplier will factor in a specific business’ energy usage, location, load factor and load shape, as well as time of usage (seasonal and daily). With more information on the business’ energy usage, the energy supplier can reduce their risk and offer an energy rate that reflects their cost of supplying energy to the business.
With this information, it’s important for Pennsylvania based businesses to understand that the commercial rates quoted on the PA Power Switch comparison chart are primarily teaser rates used by energy suppliers to get more business leads.
In most cases, small and medium-sized businesses, as well as enterprise companies, should conduct additional online research in sourcing energy plans and comparing energy rates for their business.
“Price to Compare” is a baseline energy rate calculated by taking the estimated amount you would pay your local utility for service – if you did not choose an alternate electricity supplier – and dividing that amount by your total kilowatt hours used.
If the future annual generation cost of electricity is $700 and you have a historical average annual usage of 10,000 kWh, then your “Price to Compare” rate would be 7 cents per kWh.
The “Price to Compare” is subject to change every month based on your utilities Standard Service Offer (SSO) rates. Standard Service Rate is what your utility would charge if did not opt to go with a third-party energy supplier. Each utility is required to conduct a competitive wholesale auction facilitated through an independent consultant to procure the energy requirements for its customers using the SSO rate.
For most business and residential customers, the best path forward is to use the SSO rate as a baseline of market rates – similar to how you would use the MSRP price when shopping for a car. The best option to compare and switch energy is to avoid the SSO rate and and use a third party supplier for energy rates.
With the goal to keep consumers in the dark on how rates are determined, the energy industry is purposely complicated. It’s important to invest the time to understand the energy industry, how it works, and how rates are calculated. Businesses can start with new innovative online platforms like EnergyBot.
EnergyBot has developed a robust website with an energy database that combines historical energy usage data with advanced logic to determine the best energy rates available in specific zip codes (in deregulated markets like Pennsylvania).
By streamlining and digitizing the entire energy shopping process, EnergyBot has dramatically reduced the time for businesses to switch their energy plan – from 2 weeks to just 5 minutes.