The price-to-compare (PTC) is the rate the local distribution company (LDC) charges for the generation portion of the electric bill. This is the charge a business can compare when shopping for competitive electric rates. If the all-in costs of a competitive offer are lower than the price-to-compare, then the business will be saving money. It is common for the LDC to change the PTC every 3 to 6 months. Pennsylvania Power and Light, a utility company in Pennsylvania, makes it easy for customers to find this rate by listing it on their website and displaying it on the electric bill.
Not all utility companies will make it easy to find this charge. If the price-to-compare is not visible on the electric bill you can easily compute it. The electric bill is split between two main charges; delivery and supply. The delivery charge is the regulated portion of the bill and will continue to be charged by the utility company. To compute the price-to-compare, take the total dollar amount of the supply cost and divide it by the total kilowatt-hours used during the billing period. It’s that simple! This will give you the rate that will be used while shopping for an electric retail provider.
Depending on current market conditions, a small to medium-size business can expect to save 10-30% per year when switching to an electric retail provider. Commercial companies in Pennsylvania experienced these savings firsthand. 2010 was the year the playing field was leveled to allow alternative energy choices to compete with local distribution companies. Since then, commercial companies saw electric rates go from above 10 cents per kWh, down to nearly 5 cents. This represents a 50% drop in energy prices!
