The New York Public Service Commission (PSC) made energy choice available to all New York electricity customers in 2002, allowing them to compare electricity service and shop for the best deal. The past 14 years has seen brisk growth in the number of energy service companies (ESCOs) doing business in New York State.
As a consequence, some consumers may find the process of shopping for electricity too complex or frustrating. Unfortunately, they may wind up paying too much for their electricity. Fortunately, the PSC put in place several tools to help consumers save money with energy choice.
To help out, we’re going to show you how you can make shopping for electricity in New York easier than ever and find the best deal for your home.
Your Local Utility
If you’re a stranger to New York’s energy choice program, don’t worry. While all New York State utility companies are required to offer retail choice to customers, these utilities still maintain the poles and wires that bring electricity to your home. No matter what happens, your local utility will keep you connected no matter where you choose to buy it—whether from them or an ESCO.
Currently, there are seven local utilities offering energy choice:
|Central Hudson Gas and Electric||www.centralhudson.com|
|New York State Electric and Gas (NYSEG)||www.nyseg.com|
|Orange and Rockland||www.oru.com|
|PSEG Long Island||www.psegliny.com/|
|Rochester Gas and Electric||www.rge.com|
The first thing you’ll need to do is contact your local utility to set up an account. Your local utility will give you an account number and a Point of Delivery Identification Number (POD ID number). If you decide not to select an Energy Service Company at this point, you don’t have to do anything, and your local utility will continue to sell you electricity at the monthly rate set by the PSC — which is often higher than average rate.
All the same, you could save money by shopping for lower cost power from an ESCO.
Shopping for An ESCO
This process is easier than you think, though it can be a little overwhelming at first. When you visit PSC’s NY Power to Choose website, you’ll be asked to input your zip code. You’ll then see a page showing the utility that services that zip code and then a list of rates and plans offered by the utility and different ESCOs. All these ESCO’s have met the PSC utility requirements to provide electricity service. Offerings are made in cent per kilowatt-hour (¢/kWh). You can select multiple offers to compare rates and incentives.
ESCO’s purchase electricity from spot markets or by contracting with generation companies anywhere in the country. They resell the electricity to you, the end user, using both interstate and intrastate transmission lines as well as the billing infrastructure of your local utility. ESCO’s shop for the best market prices all the time and because these rates are controlled by market prices, it’s important to understand that prices, terms, and contract conditions vary between ESCO’s. PSC regulations require that retail suppliers must be well-capitalized and able to meet technical, managerial, and financial requirements to do business in New York.
All ESCO’s doing business in New York must comply with the PSC’s Uniform Business Practices. This includes furnishing consumers with information about the electricity plan they sign up for, called the Customer Disclosure Statement. While many ESCOs post the Disclosure Statement with online descriptions of their energy plans, some do not. If you are interested in a plan that doesn’t readily furnish a disclosure statement on line, call a company representative and ask for copy.
What Should I Look Out For?
Carefully read the Customer Disclosure Statement for the plan(s) you like. This document tells you in clear language whether the plan has a variable rate, fixed rate, or introductory rate. It will will also tell you the term or length of time the agreement and will be in place. It will also stipulate whether there is a fee for early termination. Never sign up for a plan until you’ve read and understand the plan’s Disclosure Statement.
The energy charge: as already mentioned, ESCO prices are in cent per kilowatt-hour (¢/kWh). One kWh equals 1,000 watts of electricity used in one hour. Roughly speaking, let’s say your plan charged 9¢/kWh and you used a 1,000 watt heater for one hour. Your usage will be 1 kWh and cost you 9¢. However, that is just the commodity cost of the electricity, and it doesn’t include the distribution charge.
The distribution charge is the amount the local utility charges for delivering electricity through the wires and pipes it owns and maintains. In New York, you will be charged a basic delivery charge and a delivery charge based on the amount you used multiplied at a price rate for transmission. For more information, consult your utility’s electric rate or tariff summary on their website.
The PSC’s Uniform Business Practices only specifies fixed-rate plans, variable-rate plans, and renewable type residential plans. ESCO’s serving residential customers must post a price for any fixed-rate, variable-rate, and renewable plans they offer once every thirty days to the Power to Choose website.
A fixed-rate rate plan has a contract term length usually from 3 months to 36 months during which the rate for your electricity can’t go up or down. Fixed-rate plans benefit you by insulating you from rising prices but they are a drawback when prices drop.
A variable-rate plan changes from month to month depending on the price of electricity. Variable rates benefit consumers when electricity rates fall, especially during fall and spring; however, they can be a drawback during summer with heat and air conditioning demands. Keep in mind that, because ESCO’s set their prices according to the market, their variable-rate prices can climb higher than your local utility. ESCO variable-rate plan terms can be from month-to-month or up to 12 months long and include an early termination fee.
Renewable green plans let you power your home with 100% green energy from wind, solar, or hydro sources. Prices for renewable energy tend to be somewhat higher but produce fewer toxic emissions. The PSC also provides consumers with a listing of the Environmental Disclosure Labels for all ESCO’s.
Early Termination Fee
If you signed up for a plan with a specified term, it may contain an termination fee. This is money you would have to pay to get out of the contractual agreement before the term is over. Under New York Law, ESCOs can not charge an early termination or early cancellation fee in excess of:
- $100 for any contract with a remaining term of less than 12 months.
- $200 for any contract with a remaining term of more than 12 months.
- Twice the estimated bill for energy services for an average month, provided that an estimate of an average monthly bill was provided to the customer when the offer was made by the ESCO along with the amount of any early termination fee.
Also, be sure to read the ESCO Consumer Bill of Rights.
A Sweeter Deal
Call ESCO’s that interest you and ask for their current, up-to-date price and whether if the prices quoted include taxes. Consult their websites for more info. ESCO’s will also bundle incentives to new customers so ask about other value-added services. These include green power from renewable energy resources and other benefits. Many of these offers include value-added services such as appliance repair service or telephone service bundled with your energy bill. So you could get an even sweeter deal just by asking.
Shop for An ESCO with These Three Thoughts
- Price: Are the rates competitive? Does the company offer teaser rates that go up after 2 months? Are these rates or plans actually offered in your area?
- Services Offered: How’s the customer service? Are the incentives worthwhile? How does the company rate?
- Financial Stability: In a troubled economy, how stable is this ESCO? How long have is been around?
We wish you good luck shopping for New York electricity for your home. Need a place to start? Take a look at the Direct Energy electricity rates for your area here!
And if you’re looking for New York natural gas as well, learn more here!