Shopping for electricity is fairly straightforward for residents. On the other hand, small businesses are bombarded with offers from competitive suppliers, consultants, and aggregators. To combat the unknowns of the marketplace many small businesses are turning to pooling.
Residential rates are listed on various websites changing once a quarter, if even that often, and the amount of suppliers is limited. Commercial comparisons are difficult to come by as rates are negotiated. Small businesses are reluctant to spend the necessary to realize energy savings when electricity costs account for less than one percent of expenses in many retail stores, offices, and warehouses. Nearly three-quarters of Peco’s large commercial and industrial customers have switched suppliers since rate caps expired on Jan. 1, but only a third of the utility’s 156,375 small and mid-size commercial customers have switched.
Pooling allows commercial businesses to aggregate their demand and attract discounted electricity rates brokered by a market professional. These special deals take some of the risk out of the process and can provide the added peace and security of fixed rates as the economy rebounds.
The Chestnut Hill Business Association, for instance, negotiated a deal with Glacial Energy of Pennsylvania Inc. In addition to benefiting their members, the business association is earning revenue with a 0.2 cent commission for every kilowatt-hour consumed by its members. Such arrangements are common for non-profits offering pools.
The Philadelphia Commerce Department has endorsed a program called Philly Buying Power run by Taylor Consulting & Contracting L.L.C. These businesses are obtaining discounts ranging from 5 percent to 20 percent off Peco’s rate
In south central Pennsylvania, the Greencastle-Antrim Chamber of Commerce is introducing an energy-buying program for home-based businesses. The ChamberChoice program, managed by On Demand Energy Solutions, has been serving members with commercial meters. This new program will expand offerings to business owners with residential electric meters. Members will be able to lock in a fixed-rate for one to three years.
Energy-buying cooperatives have long existed for large industries and local governments, but energy cooperatives are now targeting individual residents. Before the internet, it was nearly impossible to bring together 50 or more individuals who would agree to a discounted rate, now the process is significantly streamlined.
Even entire townships are getting in on the action. Residents of Hampton township were offered a long-term contract by TriEagle Energy. A competitor in Duquesne Light?s territory, TriEagle energy has signed up about 1,500 of the 7,000 households, with contracts lasting up to two years. The pool is managed by Energy Savers Inc.
Pools of all kinds are allowing commercial and residential customers another option when it comes to electric choice. Commercial customers are using pools to cut energy costs without having to dedicate large amounts of time to shift through various offers. The growing amount of pools in Pennsylvania is just one more example of market competition leading to lower Pennsylvania electricity rates in the keystone state.
