You have many options when it comes to choosing an electricity plan for residential consumers. Free electricity can be obtained on weekends and nights. You can choose to have solar energy. You can also choose a wind power plan.
Although retail electricity providers (REPs), offer a variety of energy plans to suit your needs, most people only have two options: fixed-rate or variable-rate plans. In 2019, however, there was a third option: the wholesale electricity plan.
1. What Is Wholesale Electricity?
The wholesale market is the sale and purchase of power between generators and resellers. Electricity utility companies, electricity marketers, and competitive power providers are all examples of resellers. The Federal Energy Regulatory Commission regulates the wholesale market in most of the United States.
Generators are the first to enter the wholesale market after obtaining the required approval, they connect to the grid and produce electricity. An entity buys the electricity generated by generators and will, often, resell it to meet end-user demands. These entities will usually buy electricity via markets or contracts between buyers and sellers. Sometimes utilities might own the generation and sell it directly to customers.
A buyer and seller can predetermine wholesale electricity’s price through a bilateral agreement (a contract where the parties have reached a mutually beneficial agreement) or by organizing wholesale markets. In these wholesale markets, the clearing price of electricity is determined through an auction where generation resources are offered at a price that they can supply a certain number of megawatt-hours.
2. Wholesale Electricity Vs. Retail Electricity
Electricity, like most commodities, is first produced at the wholesale level and then sold to consumers at the retail level. Market participants pay wholesale electricity costs. They either purchase electricity from the wholesale marketplace for their own use or as a supplier to retailers. Based on their retail market requirements, utilities and suppliers provide electricity to consumers.
According to state retail procurement policies, the relationship between wholesale market costs (and retail rates) varies. Prices from short-term wholesale markets can be disparate from fixed prices for supplier services provided to residential customers, which are usually fixed over a longer time. There are many customer types in retail markets, including industrial and commercial. These customers may have different pricing than residential customers.
3. Choosing An Electricity Plan That’s Right For You
It is much easier than you think to shop for energy. It is easy to sign up once you have a basic understanding of how to choose the right electricity plan. You can choose your energy plan and compare the rates of different companies.
Here are a few tips to help you make the right decision:
Do your homework
It is important to identify what electric service you require first. These are the questions you should ask:
◎ What are your current costs?
◎ What’s your power usage on a monthly or annual basis?
◎ Which length of contract are you most comfortable with and why?
◎ Do you prefer the certainty and budget control of a fixed rate? Or are you willing to adjust to a variable-rate structure, which may be more cost-effective in the long term but can change based on market conditions.
Choose between Variable rate & fixed rate
Fixed-Rate Energy Plans
One of the best and most valuable benefits that you can receive from your electricity provider is fixed-rate energy plans. These plans allow you to select an energy rate (kWh/therm) that suits your budget, and lock that rate for the duration of your contract term. A fixed-rate plan with your Duquesne supplier will give you peace of mind. No more surprises!
Variable Rate Energy Plans
Variable rate plans allow you to adjust the amount that you pay according to the market. Variable rate plans can change monthly, or even hourly. This plan has the advantage that your bill will go down if the market prices drop. However, your monthly bill may go up if you live in extreme temperatures or extreme cold. Variable rate plans can save many money in the long-term, but it can be difficult for some to budget their monthly expenses because of the uncertainty.
4. Energy Saving Tips
Following these simple steps would positively impact your energy efficiency and reduce your Duquesne light bill.
Change your light bulbs to LEDs. LED bulbs last longer than traditional incandescent bulbs. LEDs use Less energy. As a result, you see a dramatic decrease in your Duquesne bills.
You can reduce energy consumption and costs by setting your thermostat at 78F in summer, and 68F winter. Energy consumption will rise by 6 to 8 percent for every degree of heating or cooling. Insulation will help maintain a consistent temperature in your home. using a Smart thermostat is a good investment.
When cooking in your Pennsylvania home, use a microwave. A microwave oven consumes 75% less electricity than a traditional gas oven for most activities.
Your electric bill is rising because of your TV, computer and Internet router as well as kitchen appliances because they work continuously, even when off. Use power strips to reduce your electric bill. Turn them off when electronics don’t need them.
Bottom Line
Electricity bills are a major concern for Americans. This is not surprising given the fact that electricity prices have risen dramatically over the past decade. Energy buying can be difficult, whether you are looking to switch providers, renew your contract, or start a service. Finding the right residential or small commercial electricity plan is not easy, but it will be worth the time.
