Some electricity suppliers have begun to implement demand response programs, which are yet another opportunity for you to save money on electricity.  In one sense, demand response or demand side management programs have a self-serving purpose for utilities: they are designed to provide customers with incentives to save electricity at times of peak demand, so they don’t need to build expensive new power plants or transmission lines to serve that demand.  However, if your electricity use is flexible enough to be turned down during peak demand periods, you can take advantage of these programs to decrease your electricity costs.

As an example, Southern California Edison (SCE) has a number of demand response programs:

• Agricultural and Pumping Interruptible Program: For business customers with demand of at least 35 kW or a pumping motor of at least 50 horsepower; provides a year-round monthly bill credit to customers willing to interrupt power usage at SCE’s request.
• Automated Demand Response: For customers with at least 200 kW of energy demand and an Energy Management System (EMS); provides up to $300/kW of verified load reduction, controlled automatically by an EMS.
• Capacity Bidding Program: For business customers not participating in any other demand response program; provides both capacity (per kW) and energy (per kWh) credits for the amount of load reduction bid each month, with no penalties but varying payments depending on the percentage of the commitment met each month, and day-ahead or day-of notification of events.
• Critical Peak Pricing: For business customers with demands over 200 kW; provides lower off-peak electricity rates in exchange for very high electricity rates during critical peak events called a day ahead by SCE, which produce savings if demand can be reduced during these events.
• Demand Bidding Program: For business customers with demands over 200 kW; provides bill credits of $0.60/kWh during day-of events and $0.50/kWh during day-ahead events for energy reductions within 50% to 200% of the power reduction bid for that event, with no penalties for not fulfilling on the bid.
• Optional Binding Mandatory Curtailment Program: For customers who can independently or in aggregate reduce their entire circuit’s load by up to 15%, in increments of 5%, during every rotating outage; exempts participating customers from having power cut off during rotating outages in exchange for this partial reduction during all rotating outages.
• Real-Time Pricing: For customers with demands over 500 kW; provides electricity prices that vary based on the time of day, season, and temperature, which produce savings if demand can be reduced when prices are high.
• Scheduled Load Reduction Program: For customers with energy demand of at least 100 kW, willing to commit to reducing at least 15% of their maximum demand (and at least 100 kW) for each hour during pre-scheduled days and times; provides a bill credit per kWh of qualified load drop.
• Summer Discount Plan: For business or residential customers who allow SCE to install a remote-controlled device that enables SCE to turn off or cycle off and on their air conditioner’s compressor during an energy emergency; provides an electric bill credit during summer months that depends on the plan chosen and the size of the air conditioner.
• Time of Use Base Interruptible Program: For customers with energy demand greater than 200 kW, willing to commit to reducing at least 15% of their demand (and at least 100 kW) with 15 or 30 minutes advance notification; provides a monthly credit based on the difference between their average peak period demand and the demand they commit to reduce to during events, with penalties for not meeting this commitment.

Typically, business electricity suppliers provide more options for participating in demand response programs, but some programs are open to residential electricity customers as well.  Contact your electricity supplier to find out if you are eligible to participate in programs that could help you  in your quest for cheap electricity.

In other posts, we have taken a look at differences in electricity prices by state, including tables that rank the states according to prices of residential electricity, business electricity, and industrial electricity.  However, there are some states with deregulated electricity markets, where you have a choice between electricity suppliers, and you may be able to save money by switching providers.  Actually, if you live in a deregulated state, your best option to get cheap electricity might still be to move to a state without deregulation, since deregulated states tend to have expensive electricity.  This is definitely not a case where the free market has brought savings to consumers!  However, assuming that this is not an option for you, read on for some information on choosing between electricity suppliers.

To begin with, here is a list of states that are have deregulated electricity markets:

• Connecticut
• Delaware
• District of Columbia
• Illinois
• Maine
• Maryland
• Massachusetts
• Michigan
• New Hampshire
• New Jersey
• New York
• Ohio
• Pennsylvania
• Rhode Island
• Texas

Next, here is a list of questions that you may want to ask a potential electricity supplier to help you decide if they are right for you, grouped into a number of categories.  Note that these have been compiled from a variety of state electricity consumer guides.

Pricing

• What is the price per kilowatt-hour?
• What does that price include?
• Does this rate include everything, including the electricity cost, the transmission and distribution charges, fuel charges, if any, as well as the monthly customer charge or other fees?
• Does your price include sales tax?
• Are there any other taxes, charges or fees included in your price?
• Do you have any built-in monthly customer service fees or other fees?
• Do you have any built-in price increases or decreases?
• What is the total price for, say, 500 kWh of electricity usage?
• Are the energy prices fixed, or will they change from month to month?
• If it is a fixed rate, for how long does the rate stay fixed?
• If it is a fixed rate, is it guaranteed?
• If your price varies, does it vary by amount of usage, by time of day or month, both, or by other factors?
• Are there other charges that could change during the term of the agreement?
• Is there more than one rate plan to choose from?
• How long is your price offer valid?

Terms

• What is the length of the agreement/term of the contract?
• Are there any early termination fees associated with the contract?
• What happens if I move outside the service territory during the contract term?
• What happens when my contract period expires?
• Are there any other terms in the agreement?
• Can I review your standard contract before I receive your price offer?
• Whom can I call with questions about my contract?

Enrollment

• What steps are necessary to enroll?
• Will there be a credit check performed?
• Is a deposit required and if so, how much?
• What steps must I take if I want to change suppliers or return to supply service with the utility?
• What will be the date my service starts? When will I receive my first bill?
• Will there be switching, membership or other fees?
• Is there a customer incentive for signing up?

Billing

• How will I be billed? Who provides the bill (or bills)?
• Can I pay one consolidated bill for both my energy supplies and the delivery service, or must I pay separate bills to my energy supplier and my distribution utility?
• Am I able to participate in different bill plans such as budget billing or deferred payment arrangements?
• What options are available for bill payments? Can I receive and pay my bill on-line, or pay by credit card or check by phone?
• If I do not pay my bill in full, what collection activity will occur and when?
• Are there minimum bill amounts?

Service

• Will notices that are required by law (disconnection, tree-trimming, claims, etc.) be sent to me if the bill is not provided by the utility?
• Does the supplier have a customer service center, website, or toll-free number?
• What are the Customer Service hours and phone number?

Other

• Are you certified/licensed by the public utilities commission (or other appropriate body for your state)?
• What are your generation sources?
• Are environmentally-friendly generation sources such as solar, wind, or hydro power available?
• Am I a member of a group that has a program in place to purchase energy together to increase buying power?

Now that you know if your state provides you with choice in electricity suppliers, and you know what questions to ask those suppliers, go forth in your quest for cheap electricity!