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Know Your Money-Saving Options For Purchasing Electricity

Know Your Money-Saving Options For Purchasing Electricity
Utility deregulation in Pennsylvania opened the gate to money-saving options for buying electricity.

Since the deregulation of electricity generation almost two years ago, there've been numerous changes in electricity price structures. Penn State Ag Engineer Dennis Buffington suggests it can be worth your time to investigate your options and consider money-saving changes.

One of the most significant changes is that you can now choose the company responsible for the generation and transmission of your electricity. However, you're still obligated to your local utility company for its distribution.

There's one rural escape clause to the deregulation, though. Areas served by the rural electric cooperatives are exempted.

Know Your Money-Saving Options For Purchasing Electricity

Even if that's your situation, be sure to inquire about the different rate tariffs or schedules influencing how much you pay for electricity. Your local utility company and your supplier probably don't know which rate schedule would be most advantageous for your farm, particularly if you have a dairy or other high-use enterprise.

Do the homework

Learn what your options are, says Buffington. Then figure out if any makes sense and cents for your dairy.

Consider the case of a large Wisconsin dairy. The farmer was able to lower his monthly electricity bill by about $1,000 by switching his milking times so that one milking took place during the off-peak period as specified by his local utility tariff.

Energy consumption didn't drop with the change. And he made no capital investment to accommodate the change in milking times.

Common electricity pricing options in Pennsylvania today are:

•On-peak and off-peak rates
•Real-time pricing hourly rates
•Projected day-ahead hourly rates
•Night and weekend rates
•Curtailment rates
•Interruptible rates

If your business is on a commercial or industrial rate tariff, you have more options. Also, generally speaking, you'll have more options if you have a large on-site electricity generation system so that you can occasionally go off-grid when requested by the utility company.

To learn your tariff options from your local utility company, you can go to the website: http://www.puc.state.pa.us/utility_industry/electricity/rates_tariffs/electric_tariffs.aspx . Tthen click on your local utility company.

Be prepared to wade through many, many pages to find the information you want. Perhaps the quickest way to get the information is to contact your local utility representative to find out just what your options are.

Also, contact your selected supplier, if you have other options, to learn of the various options available now or when you re-negotiate your contract.

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