What Are Price to Compare Rates?
In deregulated energy markets
, utility companies will still deliver the electricity or natural gas to your home, even if you switch to a retail energy supplier or energy service company (ESCOs
). If you have switched to an alternate supplier, the supply cost for your energy will be passed on to you by your utility with no extra charges. If you haven’t switched, the utility company will do both, supply and deliver the energy to you.
At a minimum, utilities break down their residential bills into supply charges and delivery charges. In each category you can find an itemized list of charges, such as the cost for the electricity or gas supplied to you by the utility, charges associated with procuring the energy (sometimes called merchant function charge) and taxes from sales of utility services and related surcharges. The electricity or gas supply charge is broken down into the cost per kWh (electricity) or therm (natural gas) and the actual amount of kilowatt-hours or therms billed.
When you switch suppliers, the rate to compare your possible alternate supplier’s rate to is the total supply cost from your utility. This rate is typically listed on your energy bill, broken down to the cost per kWh for electricity or per therm for natural gas. You can now easily compare this rate with those offered by alternate suppliers available in your area.
See if you could be getting a better deal:
Determination of the Price to Compare
Utilities typically use the current rate for their Standard Offer Service (SOS), which customers pay if they haven’t switched suppliers yet or if their alternate supplier leaves the market. Many utilities use different rates for electricity during different seasons and provide weighted average prices for SOS electricity to compare to. In any case, the rate only includes supply charges, typically passed on directly from energy supplier.
The supply cost can include other charges added by the utility. A transmission services charge helps the utility recover costs associated with energy transmission; price adjustments like the purchased electricity adjustment (PEA) level out the differences between the price to compare rate and the actual supply cost to the end-user.
Energy Cost Breakdown
In deregulated energy markets, your energy bill
is broken down into supply and delivery charges as well as taxes and other government surcharges.
buy electricity and gas for their customers in the competitive wholesale market. The cost is passed on as a supply charge to the customers. If you purchase energy from an energy service company, you get to pick your supplier, which may be cheaper than your utility’s supplier. It also eliminates any supply charges added by your utility, such as price adjustments or service charges.
Delivery charges pay for the cost incurred to the utility for delivering the energy. This includes construction and maintenance of the power infrastructure and the cost to deliver the energy from the transmission system to your home. Rates are set by state regulatory agencies and are not subject to market changes. Delivery charges will be billed regardless of whether you purchase your energy from your utility company or a retail supplier.
Local, state and federal taxes are applied to both supply and delivery and may be displayed in an additional section on your energy bill.
Locating Your Price to Compare
Utility companies provide a price to compare their energy supply rates to alternate suppliers for their customers. It is typically listed separately as the total supply cost, ideally broken down into cents per kWh of electricity or per therm of gas. Locating your price to compare is easy. Here’s some help for finding the price to compare rates for ComEd, National Grid, AEP, NYSEG and Consolidated Edison.
The Commonwealth Edison Company
(ComEd) price to compare consists of the actual electric supply charge, a transmission services charge, and a purchased electricity adjustment. Each charge is billed per kWh, based on the amount of kilowatt-hours supplied to the customer. ComEd lists the price to compare separately before the breakdown of energy charges on your utility bill.
breaks down the charges for natural gas into a delivery charge and a supply charge. The supply section lists the amount of therms billed and the price per therm. However, the bill does not provide the total cost per therm including taxes. To find the price to compare, customers can divide the total of the supply section of the bill by the amount of therms billed.
American Electric Power
(AEP) splits up the bill into supply and delivery charges. The price to compare for your tariff is listed noticeably on the top of page 3 with information on how to compare this rate to alternate supplier offers.
In the supply portion of the New York State Electric and Gas Corporation
(NYEG) electric and gas bill, the consumed kilowatt-hours and therms and their respective supply rates are provided. In the messages section of the bill, NYSEG provides information about the total supply cost, including energy and merchant function charges in dollars per kWh for price comparison.
(ConEdison) breaks down your electric bill in three categories: Supply charges, delivery charges, and taxes. You can find the price to compare rate with the total supply charges. ConEdison uses the total of kilowatt hours (kWh) billed and adds a merchant function charge and other tax surcharges to the supply cost. The total electricity supply cost to compare is listed in cents per kWh in a box below the supply charges.
Real Time Pricing Customers
Customers with residential real time pricing (RRTP) have no fixed energy rates
to compare to alternate supplier rates. However, you can use your past energy supply cost as a reference for possible savings with an alternate provider. Calculate your past average real-time price per kilowatt-hour (total of the electric supply section divided by the number of kWh billed) and use it for comparison.