Electricity
There has been much press regarding the pending Com Ed rate
increase, with the rate increase starting last January. There has been much
confusion regarding the changes, and the issues and choices facing
consumers have become more complicated than necessary. The most
important factors to understand are:
• Com Ed had been operating under a rate freeze for approximately 10
years.
• They were forced to reduce their rates by 20% prior to locking them.
• They have divested themselves of their generation capabilities. They
now buy electricity on the open market, as opposed to generating it
themselves.
• Electric prices have risen as dramatically as other energy prices,
doubling since 2003. The only reason consumers had not felt the effect of this
increase is because of Com Ed’s rate freeze.
• Depending on your rate class, your increase can average from 25% to
47%.
• The prediction for the energy markets for the next 2 to 3 years is
continued high prices bundled with volatile rates. While President Bush did
sign the Energy Bill and there has been much focus on the current state of the
energy market, there is nothing that will positively impact the market in the
near future.
UMG’s Electricity Management Services
The electric market is a very volatile market. Once we obtain a
customer’s information, we will monitor the industry for programs which will
allow them to experience the greatest level of savings. Additionally, once a
business is our customer, we will periodically review their account to make
sure they are experiencing the savings we promised.
Electric quotes are market sensitive. Since they are based on the
savings available at the time the account was run by the provider, if a signed
agreement is not received by the provider by the offer expiration date the
account will be rerun when they receive it. If the market changed, your
discounts will have changed as well.
Factors to Consider Prior to Selecting an Electric
Supplier
There are numerous electric providers in Illinois. While they all claim to have
the most aggressive offering, the difference in those offers is in their nuances.
The cost differences based on those nuances can be substantial. Some
factors to consider include:
How long has the supplier been in business?
Are they financially stable?
If they are a private company, will they release their financials to you?
Do they pay Com Ed delivery charges before or after they receive
payment from you? How can you confirm this?
Do they impose collars or contract quantities on you?
If yes, how is the variance billed or credited?
What charges are included in their quoted rate?
What delivery charges are being quoted?
Is the rate guaranteed?
Can the rate be renegotiated if the market drops?
What load does the supplier currently serve?
What are the renewal terms?
Will you be trapped into another term with that supplier if you don’t
reply to a renewal offer within a 1 to 2 day period?
What is the supplier’s reputation in the industry?
What impartial third party organizations endorse the supplier?
Electric Pricing Comparison Guide
Most confusion comes from the fact that charges that were previously
bundled together by Com Ed are now billed separately. Some are charges
that can be locked by your supplier, while others are billed on a pass through
basis from Com Ed, with the supplier having no control over those charges.
What charges are locked versus being charged on a pass through basis
should be disclosed by your provider. They should also reveal what
assumptions they are making in regards to Com Ed's pass thorugh charges.
They key charges to discuss are:
Energy Charge
Capacity Charge
Line Losses
Ancillary Services
Transmission Charge
The Sales Process
The sales process is simple. You will be asked to provide us with a
recent copy of your Com Ed bill. A UMG representative will fill out a one page
form requesting a savings analysis and fax the bill and analysis request to our
providers. Usually within 3 to 5 days, UMG will receive an analysis back from
the respective providers showing the available savings. This information is
forwarded back to you, and the appropriate paperwork is submitted to allow
you to take advantage of the available savings.
Utility Management Group
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