We’ve posted our next price to compare, which takes effect June 1. But do you really know what that is, or what it means?
If you aren’t sure how to make this information work for you, here are five things that will help you understand the price to compare and what it means to you.
1: The price to compare is what you’ll pay for the electricity you use if you buy it from PPL Electric Utilities, and not from another supplier. How’s that work? Read on.
2: You don’t have to pay the price to compare. You can buy the electricity your home or business uses from a state-licensed supplier. (We call this “shopping.”) Or, if you take no action, PPL Electric Utilities buys electricity and provides it to you with no markup or profit. Either way, the power you use comes to you safely and reliably over our delivery network.
If you’ve shopped — that is, if you buy your electricity from another supplier — the price to compare does not apply to you. You’ll keep getting your energy at whatever rate you agreed on with your supplier. About 45 percent of our customers shop.
If you get your electric supply from PPL, the price to compare does affect you. It’s the price you’ll pay for the supply portion of your bill. And it’s updated twice a year, on June 1 and Dec. 1.
3: We encourage you to shop. Other suppliers may offer lower rates than our price to compare, and you may be able to save money by buying your electricity from a state-licensed supplier. To see all the offers from state-licensed suppliers, visit the Pennsylvania Public Utility Commission’s PAPowerSwitch.com website. (It’s called the “price to compare” because you can directly compare it to the offers from other suppliers.)
Make sure you understand all the terms of a supply contract before you sign. The most common variables are length of the contract; whether a termination fee applies if you end the contract early; and whether the rate is fixed or variable — that is, whether it is guaranteed not to change over the life of the contract.
4: The price to compare only applies to one part of your bill. There are two main costs that make up most of your monthly bill. The supply or generation charge is the cost of the actual electricity you use, while the delivery charge is the cost to reliably operate and maintain our electric grid.
The price to compare only applies to the supply or generation portion of your bill, not to the delivery portion. The rate for delivery is set separately. That’s why, if the price to compare goes down by a certain percentage, your monthly bill won’t go down by the exact same percentage (all other factors being equal.)
5: So what is the new price to compare, anyway? Effective June 1, the new price to compare for residential customers will be 7.449 cents per kilowatt-hour, slightly lower than the previous price to compare. The price to compare for small business customers will be 6.776 cents per kilowatt-hour, down about a cent from the previous price. (The prices are adjusted every six months to reflect the cost of power purchases and adjustments based on customer use in the prior period.)