Why Locking in Your Electric Bill Rate Will Be Popular as New York Homeowners Anticipate Rising Costs
Growing up, it was unthinkable for my brother or me to leave a room without hitting the lights. And the thermostat? Touching that was high treason in my dad’s eyes. It didn’t matter if we were in the middle of a New York winter blizzard, the temperature settings stood firm.
Here in New York, we can’t really escape payments to the electric company—it’s a fact of adulthood—so we do everything we can to lessen the blow at the end of the month. Our electricity prices are some of the highest in the country—perhaps a fitting nod to our motto of “Excelsior,” meaning “ever upward.”
That’s why the new deal the Organization of Petroleum Exporting Countries (OPEC) just struck is creating some apprehension in the Empire State. OPEC’s decision may be outside our control but, keep in mind, we’re New Yorkers. We’re known for being inventive, and we can all apply that “can do” spirit to lowering our energy bills.
OPEC’s Pocketbook: A Matter of Supply and Demand
Referred to as a “cartel” because of their habit of collaborating to keep oil prices high, OPEC is made up of 13 petroleum exporting countries, including Saudi Arabia, Iran, Iraq, and Kuwait. That arrangement’s great for OPEC’s bottom line, but less so for those of us buying their oil. In 2008, for instance, they cut oil production because of the boom in U.S. shale oil, which brought more oil to the market, drove down prices, and lightened OPEC’s pockets, forcing the oil playground bullies to take their ball and go home. Sure, they have some collective power over prices, but even they have to listen to the playground monitor, a.k.a market forces, at the end of the day.
But those market forces are squeezing them again, instigating OPEC’s recent surprise deal to once more cut its production by 1.2 million barrels per day. Non-OPEC members Russia, Libya, and Nigeria also got on board, bringing the total cuts to around 1.8 million daily barrels. While these deals can be pretty complicated, they generally boil down to supply and demand—there’s a glut of oil on the market, so OPEC’s cutting supply to force up demand.
The 2017 Effect on Prices at the Pump
So what does that mean for us? We’re already seeing an increase at the gas pump, with prices jumping an average of 12 percent just on the news of the deal alone. Frustratingly, most of us don’t have control over our daily commutes the same way we do our household electricity usage. In NYC, gas prices are already over $2.50 a gallon, which you certainly know if you rely on taxis or, heaven help you, drive your own car around the city—I still remember the anxiety when gas soared back in the late 2000s.
Over the course of 2017, the U.S. shale oil production we talked about earlier may rise with increased market demand, helping to level prices, although they’re still going to be noticeably higher than the current rate. But you can help offset those rising costs at the pump by getting a handle on your home energy bills with one simple change you can make today.
The Biggest Switch You Can Flip
One of my dad’s favorite remarks growing up was, “Are you working for Con Ed?” We heard it every time we forgot to turn off the lights as kids. Most people still use the large “energy company” corporations that have controlled the market in the U.S. for years, like New York’s own Consolidated Edison. In fact, there were essentially energy monopolies throughout the country, as one company would control the entire electric market in a state or region. That is, until the early 90s.
In 1992, with the passage of the Energy Policy Act, the energy market was opened up to competition in the form of third party energy providers. Today, nearly half of all states have deregulated electricity markets. In New York, you still have the option of Con Ed, your dad’s old electric company, but you also have several modern companies to choose from as well. And when competition is strong, consumers benefit—just like we’ve seen with the ongoing battle between OPEC and the U.S. shale oil industry. Third party energy providers bring the heat to the electricity market, and they want your business. That’s a far cry from the attitude you get from an electric company that has you cornered.
But a third party energy provider can offer you a stable and unchanging energy supply rate for an agreed amount of time. With all the uncertainty in other monthly costs–groceries, gas, and the ever rising NYC water bill–doesn’t it just make sense to keep your electric bill consistent? You can’t stop your kids from leaving the bathroom light on every now and then, but you can regain control of the price you pay for it.
At Liberty Power, we offer contracts that provide price certainty, fixing your energy supply rate so it won’t go up from month to month. So no matter what happens at the pump, or how much the utility’s supply rates may change, you can have the peace of mind that your rate is locked in and will remain the same. Enroll online today to learn how you can take back control of your energy costs with the help of a retail energy provider.
Photo Credit: thirdblade