Choosing an Electric Generation Supplier: Why Third Party Energy Providers Hit It Out of the Park
If you’re a Pennsylvania native, there’s a good chance you’re on your feet cheering when the Phillies score a home run. Whether you live in the vibrant heart of the city, or out in firefly country, it’s hard to think of a better way to wind down a summer night than with America’s favorite pastime. But, when you turn on your television set and sit down to watch a four hour game with the AC running, have you ever stopped to think about the impact to your energy bill?
The Phillies themselves will tell you, winning a baseball game isn’t an easy thing to do. But if the Cubs can do it, anyone can, right? Choosing the right electric generation supplier can be tricky too. All it takes is a little strategy, sitting down with the numbers, and making a game plan.
How do you win a baseball game? You score more runs than the other team. How do you score a run? You circle the bases. The same is true for picking an energy supplier; if you’re going to score, you have to tag each base. Batter up!
First Base: Fixed vs. Variable Rate Energy
When choosing an energy supplier, first base is deciding whether you want to pay for electricity on a fixed or variable rate basis. You can pay for your electricity as the power plant produces it, which is how utilities have operated for decades, but you’ll pay an uncertain price per megawatt-hour based on the current demand. If demand is high, they can charge you more. When demand is low, prices drop. This is known as variable rate energy. Think about those gas prices you see when you fill up on your way to the ball park to watch the Phillies play. The higher the demand for gas, the higher the prices.
Alternatively, third party energy suppliers purchase electricity in bulk from power plants, which allows these plants to plan ahead, generating energy they are certain will be purchased. Thanks to this certainty, retailer suppliers can sell it at a wholesale rate that is set in advance. This is one of the reasons energy suppliers can then offer it to consumers at a set rate. This is a fixed rate energy plan, and you could say it’s kind of like planning ahead to bring your own snacks to the stadium. That way you avoid those higher prices and breaking the bank!
Summer is baseball season, but it’s also the peak season for energy use, as well as energy prices across the U.S., perhaps in part because of all the baseball fans watching from the comfort of their air-conditioned homes. To meet this increased seasonal demand, short-term use power plants that run on oil or natural gas, called peakers, go online. They are expensive to run because of their higher fuel costs, so the electricity they produce costs more than when utilities rely on lower cost production methods. A fixed rate plan will smooth out the seasonal swing in your electric bill by keeping the price the same no matter what time of year it is. Choosing a third party energy supplier who offers a fixed rate plan gives you stability, so you can depend on that first base hit.
Second Base: Choosing Your Power Source
If you know you want a fixed rate energy plan, you’ve got a man on first. That’s a great start, but you’re not in scoring position just yet. It’s a good thing you’ve got solid batters coming up to the plate—some old pros, and some rising stars. What’s true of a good batting order is true of electricity providers. You want one with experienced, dependable players, and also younger prospects developing the team’s future.
Some experienced, dependable players in the energy world are nuclear, coal, and natural gas power plants. These guys come through on a reliable basis, delivering most of the energy the U.S. is currently using. The large volumes of power they can produce for low costs keep energy in the U.S. affordable. However, these power sources are getting older and outdated, and eventually they’ll need to be replaced. That’s why it’s important to develop younger prospects on the team as well, like wind and solar energy. If you have these guys on deck, they can give you the extra pop you need to get a hit right now, and they’ll also be ready to keep the team going strong long into the future.
Wind and solar get their energy from the environment, without needing to drill for oil, refine uranium, or burn coal. Wind and solar energy are constantly renewable, while older fuels will eventually be exhausted. While wind and solar only make up a small percentage of U.S. power right now, they are expanding. With investment, they can take the place of older fuels when they are no longer usable.
So how do we make sure wind and solar are ready for the next big game? When choosing an energy supplier, pick one that offers renewable energy credits (RECs). RECs guarantee that a certain amount of the electricity you consume will be produced from renewable sources, helping to develop earth-friendly energy options. When you purchase from a third party energy supplier, you influence how power will be generated in the years to come. If the energy supplier you’re considering offers RECs, you’re on second base.
Third Base: Signing a Long Term Contract with a Team
Okay, you’ve got a runner on first by choosing a supplier who offers fixed rate agreements. One of your young prospects got a base hit, advancing your runner to second by offering renewable energy credits. Now you’re in scoring position. Before you make a move though, it’s important to be sure it’s the right one—you don’t want to lose any runners now that you’re so close to home plate. It’s a good thing there’s nobody out. You’ve got plenty of chances to try and score. Having no outs allows you to decide what moves to make next, and what options you can try. It’s knowing that you’re in control of the game.
When selecting an electric supplier, being able to choose the length of your fixed rate agreement puts you in control of the game. It gives you the flexibility to try the option you think will work best for you. You can play it safe with a short-term plan for twelve months, to get that extra hit and drive a runner home. Or you can swing for the fences by fixing your energy rate for up to 36 months. You’re in control of the game. That means you can choose the option that’s best for you, from 12 to 36 months or even something in between.
If the energy supplier you’re considering allows you to choose the length of your agreement, that allows you to get a runner up to third.
Liberty Power puts runners on all your bases with fixed rate energy plans, renewable energy credits, and negotiable length agreements. Contact Liberty Power today, and you can bring those runners home with a grand slam.
Photo Credit: bontragger