With both PPL and UGI set to increase their rates next month, now is an excellent time to review PA’s utility choice program. Pennsylvania offers its residents the option to choose the supplier of their natural gas and electric, but does shopping for rates really save money on your bills?
How It Works
Utility bills are divided into two separate charges: distribution charges and supply charges. The utility company (such as PPL and UGI) serves as the distributor, but the supply portion of the bill is where consumers have a choice. They can choose to simply have their utility company take care of supply and distribution, or shop for competitive prices between dozens of supply companies.
Designating your utility company as the supplier ensures that you always receive the “price to compare” rate. Additionally, PPL provides a Standard Offer Program which allows you to lock in a rate at a set percentage below their “price to compare.” Choosing another supplier also provides the possibility to lock in a lower rate for a set period of time.
Where To Shop
The official site to shop for PA electric suppliers is https://www.papowerswitch.com/.
Natural gas suppliers can be compared at https://www.pagasswitch.com/.
When To Shop
The best time to shop utility supplier rates is in the spring and fall. Mild weather during these seasons makes suppliers more willing to offer promotional prices to attract new customers. Since we’re currently entering late spring, with prices set to increase June 1, the window to lock in low rates for the coming summer months is closing fast.
Is It Worth the Effort?
Supplier competition lowers prices and provides the potential to lock in low utility rates. Over time, this creates significant savings potential. Additionally, utility choice provides the ability to choose green or renewable energy suppliers if that is important to you. There are, however, several precautions to be aware of when choosing a supplier.
It’s important to understand the differences in company offerings from fixed or variable rates, early termination fees and length of contract terms. When shopping, look to lock in rates that are fixed with no early termination fee. Fixed costs prevent unexpected rate hikes, and plans without termination fees allow flexibility in switching suppliers when better prices become available.
Pay attention to term lengths. At their termination, suppliers may roll customers into a variable plan with less desirable rates. Just a few months of paying higher variable rates can quickly minimize any previous savings. I personally experienced this once when the price I had “locked in” more than double in a matter of months after the term ended.
To maximize the savings available with the utility choice program, set calendar reminders each spring and fall to check available rates against your current plan. Utility choice offers an opportunity for lower costs at a time when prices continually edge up, but if you are not committed to routinely shopping available rates, you may be better off sticking with your utility company’s “price to compare” rate.
