How We Saved $31 Dollars This Month on Our Electric Bill

March 21st, 2009 by andum | Posted in Save Money

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How often do you look at the inserts that are stuffed in your monthly bills?  A year ago or so I decided to research an insert that was included with my electricity bill, because it said I could shop for an electricity supplier.   Why would I want to do that?  Well, apparently, these other suppliers offered different rates.   Still curious, I went to the website noted on the insert and discovered a number of approved suppliers – all of whom offered lower rates than the default supplier (CL&P).  I filled out the necessary form and after a month or so our electric bill included our new supplier who was charging about 5% less than the rate that we had been paying.  I figured if the supplier portion of our monthly bill averaged $150 a month or $1800 a year, we would save a little less than $100 a year.  Not a lot of money, but there didn’t seem to be any downside.  In fact, other than listing a new supplier on our bill from CL&P, nothing changed, since CL&P still is responsible for delivery and billing.  In the past year, occasionally I would remember that we were saving money each month, but didn’t think too much more about it until it was time to write this post, my first post for Wealth Itself.

Here is what I discovered in researching this post – I was now saving a lot more than 5% because the supplier that I selected had not increased their rate since I had signed up, while CL&P had increased their rates.  For this past month we used 1771 KWH at a rate of $0.1048 per KWH; CL&P’s rate for this same period: $0.12217 per KWH, a rate that is more than 16% higher than what we are paying.  Our savings for the year will now be about $275 dollars. 

Please note that not all states participate in a program similar to the state of Connecticut.  It may also be that the savings in the participating states will be less than what we are experiencing.  But, if you live in one of the states listed below (or have friends or relatives living in one of these states), it certainly seems that the potential savings are worth a few minutes of research or a phone call.  This US government website indicates that as of January 2009, the states listed allow its residents to choose among different electricity suppliers.  I have included websites that appears to offer good starting points to learn more about the program in each state.  Or, next time you receive an electric bill, call the company and ask for information about an electric supplier choice program in your state.

• Connecticut
• Delaware
• Illinois
• Maine
• Maryland
• Massachusetts
• Michigan
• New Hampshire
• New Jersey Gas supplier choice also? Unclear if program only for commercial accounts
• New York
• Ohio Program still available?
• Pennsylvania
• Rhode Island: Contact your supplier
• Texas

There are independent web sites that serve as a gateway to finding suppliers and getting rate quotes.  But, a quick look found that these sites’ offerings were incomplete.  This suggests that these sites are for profit businesses that will only provide information about suppliers that they have an affiliate relationship with.  This means that you may not be informed about the lowest cost suppliers.

The energy supplier choice options arose out of state electricity deregulation that started in the 90’s.  The intent of utility deregulation is to encourage competition that will result in lower costs to consumers.  Deregulation was effective with telephone services, but has not been entirely successful with electricity (think Enron or the yearly increase in your electric bill).

It seems likely that these alternative electricity suppliers will continue to offer lower rates than the major utility companies.  Enrollment in these alternative supplier programs has not been as successful as the savings seem to warrant (I read a report that only 2000 homes had signed up in Rhode Island).  Since the primary incentive to switch is to save money, it is likely that they will continue to aggressively price their rates.  But, it will be worth conducting a regular rate check to make sure that the supplier you have selected continues to offer the lowest rate.  You may also want to note the term of the current rate; for example is the rate that you signed up for guaranteed for the remainder of the calendar year?

Green energy plug …

Please note that your state may also offer a clean or renewable energy program that allows you to help support alternative sources of energy such as wind and solar.  It is likely that you will pay a surcharge (in Connecticut you will), but you will be supporting the environment and energy independence. You can find out more here.

Update: This post has been included in the Festival of Frugality #170 – Frugal Living is Timeless.   See more posts in this Festival at MoneyNing.

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