Concerned about higher energy prices?
HOW TO MAKE WISE ENERGY CHOICES
Ohio consumers should be aware that there can be both risks and opportunities for their hard-earned money when purchasing electricity and natural gas. The Office of the Ohio Consumers’ Counsel (OCC) is Ohio’s advocate for residential utility consumers and can help Ohioans make wise choices about utility services.
As background, consumers do not have a choice regarding the monopoly utility that provides their energy distribution service—the wires or pipelines. But consumers can choose who supplies the electricity or natural gas that runs through the wires and pipelines. That energy supplier can be the same utility that provides the distribution service (by choosing the utility’s “standard offer”). Alternatively, energy can also be supplied by a marketer or a government aggregator through Energy Choice programs.
Electric Choice is offered to consumers of AEP Ohio, AES Ohio (formerly Dayton Power & Light), Duke Energy, and the FirstEnergy utilities. Natural Gas Choice is offered to consumers of CenterPoint Energy (formerly Vectren), Columbia Gas of Ohio, Dominion Energy, and Duke Energy. Energy Choice is not available to consumers of municipal power systems, members of co-ops or participants in the low-income Percentage of Income Payment Plan (PIPP Plus). Utility consumers who are current with their utility bills are eligible for Energy Choice.
Some marketers and governmental aggregators may offer green energy options. Always compare prices when considering these options. Consumers should avoid falling prey to “greenwashing,” which is a deceptive marketing tactic that could under-deliver on green energy and over-charge on price. Click here to learn more.
Here is more information about the three alternatives that many consumers have for energy choices:
1. Staying with or Returning to Your Utility’s “Standard Offer”
Consumers have the option to stay with or return to their utility for energy supply. Their utility can provide energy at rates through the “Standard Service Offer” (electricity) or the “Standard Choice Offer” (natural gas).
The utilities’ standard offers are based on competitive auctions that have historically produced economical prices for consumers. However, with the recent worldwide volatility in the energy market, the electric utilities’ standard offers are on the rise and expected to remain higher for a year or more. Some electric utility standard offers will be about double what consumers paid last year. Consumers can likely find better electric offers from some marketers and government aggregators than from their utility’s electric standard offer. Be sure to compare prices.
On the other hand, natural gas prices soared in 2022 but are falling now. So natural gas standard offers could be economical in 2023.
More than ever, consumers should do their research when purchasing their electricity or natural gas. That means consumers should compare their options before choosing an energy supplier. And it means consumers should continue to compare options monthly to confirm they are still saving money.
Consumers should first determine if they are currently buying energy through their utility’s standard offer. To do so, consumers can contact their utility or check their bill for this information.
Also, before switching suppliers, consumers should first check if their marketer contract has a high termination fee that makes it too expensive to switch. In the following sections, we explain more about buying energy from marketers and government aggregators.
2. Energy Marketers
As part of Energy Choice, consumers can choose to purchase electricity or natural gas from an energy marketer that is certified by the Public Utilities Commission of Ohio (PUCO). Consumers would be charged by their chosen marketer for their energy usage. Consumers choosing a marketer would still continue to use their utility’s distribution service (wires or pipes) and be billed for that service by their utility.
Before contracting with a marketer, electric consumers should compare the marketer’s prices with their utility’s “Price to Compare” that appears on their electric bill. Natural gas consumers should compare the marketer’s prices with their utility’s “Standard Choice Offer” that is listed on the PUCO’s Apples to Apples website at www.energychoice.ohio.gov. Consumers should also compare the prices offered by various marketers.
Alert: Savings are not guaranteed! Consumers must do their homework to avoid paying more.
Consumers who have chosen their utility’s budget billing plan should contact marketers to learn about options, before switching.
Proceed with Caution! Consumers should be aware of pitfalls with some marketer contracts. Beware of marketer “teaser” rates. That is, some marketers initially offer very low rates (the teaser) that are soon replaced by higher rates. Beware of “evergreen” contracts where the energy contract will automatically renew, sometimes at much higher prices, after a year or so. Watch out for “early termination fees” that can make it cost-prohibitive to switch from one marketer to another or to return to the standard offer.
If a consumer agrees to a marketer’s contract, the consumer will receive a confirmation notice from their traditional utility. Consumers have a grace period of seven days to cancel a marketer’s contract, after receiving the utility’s notice. Seven days after the confirmation notice, without a cancellation, the enrollment will take place. After enrollment, the marketer’s charges usually will be separately identified on the utility’s bill. It may take two to three months for a marketer’s billing to appear or be removed from a consumer’s bill. Sometimes marketers do their own billing, instead of using the utility’s bill.
Always obtain and keep a copy of your marketer’s contract. Make a reminder note in advance of the date when the contract ends and what actions you should consider taking, such as more homework on your options. Consumers choosing a marketer offer should especially stay aware of changes in the market – or risk paying more in the long run.
Your Privacy Rights. You can stop electric and natural gas utilities from sharing your personal contact information with energy marketers. Contact your utility to enforce that right. Some utilities allow an online option to protect your contact information.
For more tips about energy marketers, such as handling door-to-door sales, please visit OCC’s “Block the Knock” web page at www.occ.ohio.gov/content/block-knock.
3. Government Aggregation
In some parts of Ohio, government aggregation is another option for purchasing electricity or natural gas. Under this option, voters can authorize their local government, typically through an election, to supply electricity or natural gas to residents. Government aggregators use the buying power of many consumers to negotiate prices.
Joining an energy aggregation in Ohio is typically on an “opt-out” basis. Opt-out aggregation automatically includes each consumer in the community’s energy aggregation unless the consumer opts-out of participation.
As with buying from energy marketers, consumers should compare prices. Compare the aggregation price with the Standard Service Offer (electricity) and the Standard Choice Offer (natural gas), as well as compare it with marketer offers.
Consumers should open any mail from aggregation groups and local governments to learn about the aggregation’s terms, including the consumer’s right to opt out. Visit OCC’s aggregation web page for more information at www.occ.ohio.gov/aggregation.
In conclusion, we hope you save money by making wise energy choices!
Saving Money with Energy Choice is Not Guaranteed
Questions to ask when considering Energy Choice:
- Will I save money compared to my utility’s standard offer?
- How much will I pay for energy?
- Is the rate fixed, variable or a “teaser”? (Teaser rates start low and then increase.)
- Is there a fee to cancel the contract (sometimes called an early termination penalty), and if so how much?
- How long is the contract term and will I be notified when it ends?
- Will the contract automatically renew if I don’t act? If so, how is the new price determined?
- Will the charges appear on my utility bill or will I receive a separate bill?
- Who do I contact with billing questions?
- What are the contract terms and conditions? (Always obtain and keep the contract.)
- What happens if I decide to move?
- When will the service begin?
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