Many Pittsburgh-area households received an unwelcome surprise in their mailbox this month: energy bills that were up to 35% higher. If you are a West Penn Power customer, the average monthly electricity bill increased $32, from $92.47 to $124.42.
What’s behind this painful bill? For starters, for the first time in twenty years, West Penn Power increased the distribution rates and fixed charges that all customers pay to have their electricity delivered. At the same time, the price that West Penn Power charged its customers for the actual energy they consume, called supply, skyrocketed. Unfortunately, July is the month when all of these recent rate increases hit your energy bills.
Check out the graphic below to see how these increases break down for a typical household that uses 1,000 kilowatt-hours of electricity a month.
Your Energy Choices
What you may not know is that you can take control over a significant portion of your energy bills: the rate you pay for the supply portion of your bill. That means that when bills jump up as they did this summer, you can switch to a competitive energy supplier and potentially reduce your energy bill by hundreds of dollars per year on your electricity bill, if you shop smart.
Before you start shopping, it helps to understand your options. And options you have: from fixed rates to variable rates, short term to long term, the choices can start to add up. Here are a few of the key things you should know when shopping for an energy plan:
Your Price to Compare. The price to compare, or PTC, represents how much you would pay your utility for each kilowatt hour of electricity you use. This information can always be found on your utility bill–utilities are required to disclose it–and will help you understand how much you can save by switching to a new plan. The current West Penn Power Price to Compare for residential customers is 7.311 cents per kilowatt hour through the end of August. This rate increased from 5.331 to 7.311 cents per kWh on June 1.
Short term vs. long term contracts. You can find plans that last as little as three months or as long as 36 months. Shorter term plans often offer lower rates, but you risk rolling on to a higher priced plan at the end of the term. The longer term plans provide peace of mind from locking in stable, predictable prices. But make sure you’re ready to commit for the long term: these plans can come with hefty early cancellation fees.
Fixed vs. variable rate. Selecting a fixed rate plan means that you’ll pay the same rate for your electricity for the duration of the plan. Many people favor these plans due to their predictability: the rate you pay for your electricity won’t change from month to month. Some suppliers also offer variable rate plans, which means that the price you pay for your electricity varies month to month based on the market price. You may get a great deal on rates when market prices are low, but beware, you’ll be on the hook if rates suddenly skyrocket.
Renewable energy options. When you buy your power from a retail supplier, you also have the choice to purchase renewable energy plans. For West Penn Power customers, this typically means you’ll be buying your power from wind farms–helping to reduce global climate change with no effort on your part. The best part: sometimes, these plans can even be cheaper than the price to compare.
Energy shopping can be confusing, but knowing a thing or two about your options before getting started makes a big difference in reducing your energy bills. Choose Energy can help you select an affordable plan that will lessen the sticker shock of this summer’s bill increase.