What you need to know when shopping for an energy provider

Illustration by Kathleen White

Illustration by Kathleen White

It's Electric

by Hannah Waters

A letter slides through my mail slot urging me to change my electricity provider. I groan. “Sign and return the form below to have 100% renewable sources supplied for the Waters home,” it says. “If you don’t switch, your power will still come from power plants that contribute to air and carbon pollution.”

Another audible groan escapes my lips as I see that “switch energy provider” is already on my to-do list—where it’s been for more than a year. Whenever I get these letters, I always intend to make the switch. But as soon as I start researching my options, I find myself overwhelmed. There are more than 100 alternative energy providers available to Philadelphians, and some offer multiple plans. It’s hard to know where to start.

It’s time to stop procrastinating and recognize this anxiety for what it is: the power of choice. Pennsylvania is one of only 17 U.S. states that grants citizens the power to choose their energy provider, according to the American Coalition of Competitive Energy Suppliers. While we might not have a choice of who delivers our electricity to us—PECO services all of Philadelphia County—we don’t have to accept whatever electrons they serve up. We can choose where our electrons come from, whether from renewable sources or a provider that charges less.

Well, up to a point. If you switch to a green provider, for instance, your house won’t be powered only by green energy; it’s not the same as installing solar panels on your roof. All electricity generated by providers is pooled into a single grid, which PECO then distributes throughout the city based on demand. If you make the switch, however, you increase the amount of renewable energy and reduce the amount of fossil fuel-generated energy that is consumed across the city.

“It’s not like we’re attaching a wind turbine to your home,” says Tom Matzzie, CEO of Ethical Electric, which provides 100 percent wind power from Pennsylvania, and is responsible for my recent mailer. “I describe it like banking: You put money into a bank account, but you don’t take that same money out.” When you switch to a renewable energy provider, you put green energy in, and take out whatever is available.

The Watts and Volts

Right now, if you have standard PECO service, most of your energy comes from fossil fuels and nuclear power, with renewable energy coming in at 5.5 percent of the total supply. Around two-thirds of your monthly bill pays for this power generation (called “generation charges” on the bill), and the remainder pays for transmitting that power from the provider to PECO and distribution from PECO to your home. If you switch to a new provider, you will get the same bill every month; the only difference will be from where PECO purchases your power.

The cost of standard electricity from PECO is a fixed rate that is adjusted every quarter; as of December 2015, that rate was $0.0836 per kWh. (You can see this on your bill as the “price to compare.”) Many of the alternative providers also offer a fixed rate, which guarantees a certain price for the length of your contract. This means a more consistent bill—but often a slightly more expensive one.

The other option is a variable rate, which changes with market conditions. This means that in periods of high demand—such as in the summer and winter, when air conditioning or heat are on full-blast—power may also cost more per kWh. But in times of lower energy usage, your rate may be below PECO’s standard rate. Variable rates tend to most benefit customers whose energy use falls around or below the household average of 700 kWh per month. (You can see your usage on your bill.)

Beyond making an ethical switch to green energy, many people choose a new provider to save money or to sign up for creative contracts. Time-of-use plans, for instance, incentivize customers to do power-hungry activities (like running appliances) when demand is low (e.g., in the middle of the night) for even lower prices. 

Pennsylvania also allows consumers to choose their natural gas supplier. Unfortunately, however, there are no competitive options available in Philadelphia.

Making the Switch

If you, empowered citizen, want to look into your options—whether to support green energy or save some money—it’s unfortunately not as easy as checking a “Yes, Clean Energy!” box and going on with your life. But there is a great tool available to you: PAPowerSwitch.com, which is run by the Pennsylvania Public Utility Commission.

If you go to the website, you can type in your zip code, see the options available to you, and narrow your list down by energy supplier, cost or terms of the contract. It offers the details of plans without marketing and has a lengthy FAQ, including questions you should ask an alternative provider. There are many choices for Philadelphians, and once you find one you are happy with, you can click through to register.

Matzzie cautions against simply chasing the lowest rate, because “sometimes those plans come with surprises”—like an increase in cost after a short introductory period, or high cancellation fees that make it hard to leave the contract.

If you’re interested in green energy, PAPowerSwitch tells you what percentage of green power is supplied by each provider and, where possible, what kind of power and whether it’s local. Some renewable energy providers generate or buy their power from across the country, so if you’re interested in supporting local options, keep that in mind.

And if you do sign up for a new plan, make sure you do it online instead of through a telemarketer so that you have time to read and process the full terms and conditions in your contract. 

Once you’re done, you can rest easy, satisfied that you have executed your power of choice—and pushed Philadelphia to be powered by a greater proportion of renewable energy. It’s enough to make you feel electric (boogie woogie woogie).