Energy choice is starting to become a trend across the United States. It’s no secret commercial companies consume more electricity than residential homes. The increased amount of energy can easily eat away at a company’s bottom line. In regulated markets, utility companies have a monopoly over the power lines, and the generation cost charged to their customers. With no competition in these markets, energy prices tend to be much higher.
The answer to solving this issue seems to be opening up the market to competition and allowing commercial companies to choose a competitive electric supplier. Allowing consumers to select their energy suppliers is known as energy choice. States that have opened up their markets to deregulation tend to enjoy the lowest electricity cost in the country. Texas and Pennsylvania are just two of the states that are reaping the benefits of energy choice.
Deregulating the energy market allows a company to choose its electric supplier based on the specific needs of the company. For those on a tight budget, a company selecting a long-term fixed rate will better be able to predict its future liability cost and plan its budget accordingly. It is not uncommon for short term fixed rates to be the lowest. If a company is willing to take the risk, it can easily save 40% or more by locking in a short-term rate. However, this does not mean a company won’t save a substantial amount of money by electing to go with a long-term fixed rate.
The market is extremely competitive, and suppliers will cut prices to earn your business and increase its market share. It is this level of competition that is responsible for the downward trend in energy costs in states such as Texas. Unlike regulated energy markets, if you are unsatisfied with an energy retail provider you are free to switch to a competitor.
Large industrial companies will not be punished by the utility company for switching to a competitive electric retail supplier. Utility companies encourage their customers to shop around for alternative energy choices. PPL (Pennsylvania Power & Light), a utility company in Pennsylvania, provides options to its customers for alternative energy suppliers.
Power Outages
The main job of the local utility company is to deliver the electricity to the point of service. Profit margins are mandated by the state and will be unaffected by customers switching to an alternative energy provider. Any power outage during the term of service will still be reported to the utility company. The quality of service or the energy component itself will not be affected. With lower electricity rates and higher savings due to energy choice, it may prove highly beneficial for a commercial company to shop around for a competitive energy quote.