Glossary of Important Electric Service TermsJuly 17th, 2013
Are you shopping around for commercial electric service in Reading, Harrisburg, Allentown, Lancaster, or other nearby cities in Pennsylvania? Electricity deregulation in Pennsylvania opens up the electricity market and enables multiple service providers—such as UGI EnergyLink—to compete. The purpose of electricity deregulation is to lower prices and increase customer satisfaction by introducing competition into the market. Prior to deregulation, Pennsylvanian business owners had only one option when it came to their electricity provider—including assigned utilities such as Met-Ed, Penelec, PPL, West Penn Power, or another provider. This has all changed now.
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If you are in the market for a more affordable electricity rate, it’s important you understand some of the terms you might encounter in the process:
Electricity consumption is measured in kilowatt hours, or kWh. According to the U.S. Energy Information Administration, U.S. small businesses spend more than $60 billion a year on energy. Your monthly energy bill is calculated by the energy used each month multiplied by the kWh rate. As a result of electricity deregulation, you have the opportunity to lower the rate you pay per kWh. Knowing your kWh rate allows you to pre-calculate how much your utility bill will be that month.
With a fixed-rate plan on electricity with UGI EnergyLink, you’re guaranteed a set electricity rate over an extended period of time. In a fixed-rate arrangement, your electricity rate will be competitive at the time of the contract, as well as based on your own demand for electricity. You’ll be charged the same amount per kilowatt hour of electricity each month until your contract expires, whether the price of electricity rises or falls.
Signing up for a variable-rate plan with UGI EnergyLink allows your electricity rate to change from month to month, depending on market fluctuations. Selecting this plan means you’ll probably pay a different amount per kilowatt hour every month.
As we mentioned, electricity deregulation lowers prices and increases customer satisfaction by introducing competition into the energy market. Many business owners, including those in Pennsylvania, now have the ability to choose an independent energy retailer for the supply portion of the commodity provided by the utility.
Your utility is the company that provides the electricity directly to your small business. In a deregulated market, you’ll still pay your utility each month, but the kWh is determined by a contract with independent energy marketers (like UGI EnergyLink). Because the utility will still deliver your electricity, switching to a more affordable rate with UGI EnergyLink still provides reliable, uninterrupted service to your office or facility.
PJM Interconnection is a regional transmission organization that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia. At UGI EnergyLink, we own key generation facilities, which are part of the PJM Power Pool. By optimizing the combined use of our own generation and the broader PJM Pool, we can supply the most reliable and cost-effective electricity to your home or business. To make this happen, all you have to do is fill out a simple enrollment form—be sure to have your account number and current utility company in front of you.
If you need further clarification on any of these important electric service terms, feel free to call us or contact us online.