5 Things to Consider Before You Choose an Energy Provider
Not everybody gets to choose an energy provider—some communities only have one company that provides power to the area. If you do have a choice, it’s a big decision, one that impacts you and your family on a daily basis. It’s important to examine what the different providers can offer you in terms of price and service before you commit to what could be a years-long contract. Before you sign on the dotted line with an energy provider, spend some time talking with the company about these important questions and concerns.
Price Per Kilowatt Hour
The price per kilowatt hour is the main unit of measurement of energy rates in the electricity industry. Examine your old bills and figure out how much energy you use on a monthly basis, so the rates have meaning to you as a concrete monthly cost. You can compare the price per kilowatt hour from various companies at energysavings.com or a similar site. If any of the rates seem unusually low, ask the company how it came up with the price. Specifically ask about any services or fees not included in the kilowatt-hour price.
Also find out how the company calculates the rate on kilowatt hours. There are three different styles of pricing kilowatt hours: Fixed price is a single price that is set in advance, floating or variable pricing changes depending on market forces and hybrid is a combination of the two.
Contracts
Some utility companies, especially in areas where there is competition, put you under a contract for a specified amount of time. This stops you from jumping ship if one of their competitors decides to run a special price for new customers. Other companies may work on a month-to-month basis, so you’re free to take your business wherever you choose. Find out if you will be under contract and for how long.
Deposit
Utility companies may charge you a deposit as a matter of policy, especially if you have no credit or bad credit. The deposit mitigates some of the risk of you skipping out on a bill. Generally, you get this deposit back after you have paid your bills on time for a year or you move. The amount of the deposit varies by company. It could be a small amount or it could be hundreds of dollars. Ask about this before you sign anything.
Renewable Energy Buyback
If you plan to add solar panels or wind turbines on your property, find out whether the utility company buys back any of the energy. Not all locations and companies offer this service, but many give you renewable energy credits that cover your electricity and can be sold for a passive secondary income. This process is called net metering.
Payment Options
Almost every utility offers online payment, bill pay and other convenient ways to take care of the monthly bill, but it doesn’t hurt to ask. Also find out if the company lets you average out your payments throughout the year. You avoid seasonal spikes in your electricity bill this way.
