BGE Home sells electricity, undercuts BGE price
In another sign that the market for electricity shopping is heating up for Maryland residential customers, BGE Home launched a fixed-price product on Monday that's more than a penny per kilowatt-hour lower than what Baltimore Gas & Electric is charging from now through May. At 10.25 cents per kilowatt-hour for two years, it's the cheapest competitive offer for BGE customers I can find. It's a decent offer -- subject to the cautions I give below. So is BGE Home's one-year deal of 10.35 cents per kilowatt-hour. (This includes costs for generation and transmission. You pay another 2.5 cents or so for delivery.)
The deals show that wholesale electricity prices continue to edge down from their highs in 2008, thanks to a slowing economy that has reduced demand.
BGE Home, which like BGE is owned by Constellation Energy but is less regulated, has sold fixed-price natural-gas contracts for years. But it has never sold electricity until now. The company joins Washington Gas Energy Services and Dominion Retail in hawking kilowatts that are cheaper, at least for now, than the default BGE product most households get. BGE Home and other companies can undercut BGE because BGE bought much of its juice for this year in 2008 at high, 2008 prices.
"It was a business decision based on the current market prices," says Jack Bode, BGE Home's vice president of sales. "We thought it was time to roll it out." They're limiting the offer, being marketed as from Constellation Electric, to the first 5,000 households. It's kind of pilot program, and Constellation may start selling residential juice under the same name in other places.
Why would Constellation let BGE Home undercut BGE? The dollars aren't that big; this gives Constellation experience selling residential electricity that it can apply in other markets; and these offers are also a signal that BGE's standard price will be coming down, too. Which is to say that it's impossible to tell whether you'll save money vs. the standard BGE offering over the life of these contracts. So far we know what BGE's standard price will be only until May.
I've already locked in with a 10.9-cent offer from WGES for two or three years. (I thought it was two but my statement says three.) Thanks to a high early-cancellation fee it doesn't make sense for me to switch. But if I were starting from scratch I would take the two-year, 10.25-cent offer from BGE Home. It's a decent amount lower than BGE's standard price of 11.527 cents between now and June. (Most houses ought to save at least $10 a month based on that difference.) And it'll shield you from a spike in energy prices if the economy revives, although there aren't many signs of that happening.
However, you need to be careful of two things. 1) There is a hefty early-cancellation fee on all alternative offers, including BGE Home's.
UPDATE: CORRECTION: As a commenter points out, Dominion Retail's offer of 10.37 cents through the end of 2010 has no early-cancellation fee. You can switch anytime.
2) BE CAREFUL when the contract expires in 12 months or 24. Like BGE Home's natural-gas contracts the electric contract automatically rolls over to a new deal unless you tell them to cancel and go back to the regular BGE offering. Many households got burned in the winter of 2008/2009 when their BGE Home gas contract rolled over to a fixed-price deal when prices were at their peak. Locked in for a year, people paid hundreds of dollars more than they would have if they had switched back to the standard BGE natural-gas price, which let households benefit from plunging spot prices. Put a reminder on your calendar in a year or two to make sure the rollover deal is any good.
Comments
Dominion does not have an early cancelation fee. That's why I switched them!
Posted by: Richard | January 12, 2010 10:15 AM
The post above by Richard says it all. Most customers when it comes to choosing an energy supplier want there cake and eat it too. Richard states that he chose Dominion because they have no termination fee. Well, that's good but what is the difference if they did? What experience do you have as a customer to be guessing the market and wanting to switch from one supplier to the next. This is where I see customers get into trouble,time and time again, it's the have your cake and eat it to attitude. Remember folks, fixed rates do NOT guarantee savings, they only guarantee price. Markets are in constant flux up and down. What really should happen is there should be more PRICING PLANS for customers to choose from, and therefore save more money in the process. Residential customers are a different bread when it comes to choosing the right supplier, but educating yourself on choices is thee best thing a customer can do, and remember, when you choose a fixed rate plan, don't fret about it, just live with it and don't worry about what happens next, or what could happen next, just live with the decision and move on with life.
Posted by: Bob K | January 12, 2010 5:05 PM
Any thoughts on Wash Gas offer to sign up for multiple years at 10.9 cents/kWh?
https://www.wges.com/portal/select.php
Posted by: Elizabeth J. | January 17, 2010 10:32 AM
Will the peak rewards rebates (during the Summer months) transfer if I switch providers?
Hi Ron. The answer is yes, BGE's peak rewards credits for letting them cycle your AC WILL transfer. You'll get the credits no matter whom you're buying electric supply from. Switching to BGE Home or anybody else won't affect the Peak Rewards credits. JH
Posted by: Ron | January 22, 2010 11:51 AM
One has to be very careful with locked in deals.
Often it is in the suppliers benefit not the customers.
Posted by: Mal | January 28, 2010 2:25 AM
BGE Home's electricity offer is not the lowest.
Washington Gas Energy Services (WGES) has a special online enrollment site at https://www.wges.com/portal/rc_engine.php?rc=EAHOME-EA1016 that offers 12, 24, or 36 months electricity supply to residential users residing in BGE's service area for 10.30 cents per kWh fixed price. That means the rate will not increase for the duration of the agreement. If you move away or sell the residence, there is no termination fee.
Residential users served by other electric utilities elsewhere in Maryland can get the following low rate fixed price offers at the same link:
Pepco Maryland at 10.8 cents, Delmarva Power (Connective) at 9.50 cents, and Allegheny Power at 8.10 cents per kWh.
Every residential electricity bill in Maryland shows in fine print the customer's "price to compare" which is the price that the user should use to compare against other offers. It is the average price that the user pays for electricity. It combines the winter rate with the summer rate. Compare your electric bill's "price to compare" with the special WGES rate at the link mentioned above and make your decision.
Posted by: Michael Strotz | February 3, 2010 12:19 AM
Well, I have been getting this offer from BGE Home in the mail but I am really concerned about the contract language such as in the WGES contract (especially, changes in any legislation, regulation or Utility tariff that adversely affect this Agreement):
Termination by WGES
WGES may terminate this Agreement on 30 days written notice as a result of the following: (1) non-payment by Customer; (2) changes in any legislation, regulation or Utility tariff that adversely affect this Agreement; or (3) Acts of God. The effective termination date will occur on the next applicable meter read date, and upon termination with WGES, Customer will be returned to the Utility's sales service. The effective termination date will occur on the next applicable meter read date. If WGES terminates this Agreement for non-payment by Customer, Customer shall be responsible for an early termination fee.
So a customer has not rights if WGES cancels under (2) above and if a customer cancels, he/she would have to pay a termination fee.
Who protects the consumer - Gov. O'Malley?
Posted by: Harry | February 16, 2010 12:24 PM
I've only done a little research on changing electric suppliers, but I've discovered one very important fact to consider. The charges from the new supplier would be on my BGE bill, however they cannot be included in my Budget Billing. I don't know about everyone else, but I depend on my Budget Billing to help me handle my bill payments. I have not seen this disclosed in any other media.
Posted by: David | February 18, 2010 8:55 PM
I just got a special offer from Constellation Electric stating one year of electric for 10.31 cents per kwh and two years of electric for 10.15. It states that these rates are 14% and 15% respectively lower than BGE's current Price to Compare of 11.97 cents per kwh. How does this compare to BGE Home? And what happens with my natural gas prices? Will they stay the same or get switched to some unknown rate?
Donna: Constellation Electric IS BGE Home -- that's the name they're using. If you switch to Constellation Electric for electricity nothing happens with your natural gas prices, whether or not you're with BGE Home for gas. If you ARE with BGE Home for gas, you should consider going to BGE's standard floating rate as soon as your current contract expires. BGE Home's fixed price has often been a poor, and sometimes terrible, deal, in comparison with the default BGE gas option. JH
Posted by: Donna | April 5, 2010 2:45 PM
I would not recommend Constellation Electric to anyone. They have poor customer service and they trap customers into staying with them. I signed up for the service and found out they did not have budget billing and sent them an email of cancellation telling them I wanted to go back to BGE on January 27th. I called to make sure they received my cancellation on January 28th which is the date that they actually made the cancellation on. Imagine my surprise when I get a BGE bill in the mail with Constellation Electric as my supplier! I promptly called and was told that they submitted the request but BGE didn't accept it until February 2nd which was too late for them to process the change request. So now I have to pay more than double to Constellation Electric because of some mix up or something with the paper work. I was not told that I would be billed by them all I was told was that my service had been cancelled with Constellation Electric. Then I receive a letter in the mail stating that my cancellation has been processed and I will be billed for TWO MONTHS through Constellation Electric! Why am I being billed if BGE so called accepted the notice on February 2nd? I understand the 1 month of billing for March but April should have been back with BGE. So now when my bill was almost a $100 with BGE budget billing, I am now having to pay almost $300 to Constellation Electric for TWO MONTHS. And of course there is nothing they can do about anything. Very conniving and deceitful tactics to try to keep customers. I would not recommend them to my worst enemy!
Posted by: Renada | April 6, 2010 5:17 PM
There is a new choice in low cost, GREEN energy rolling out June 1st.
No contracts
No fees
No early termination
No BS
Locking in your rate is NOT a good idea, because when wholesale prices come down, you will pay MORE than BGE!
With Viridian, if you don't like them or want to pay more, you can switch back at anytime.
Check it out.
www.nomorebge.com
Posted by: Scott Karg | May 24, 2010 12:10 PM
I just noticed that BGE rates are about to fall below the contract rates fo Constellation Electric AND will probably get permission to increase their delivery costs.
The end result will be that those of us who switched to a longer term contract with Constellation Electric will soon loose any price advantage that had been expected.
Was this part of the plan by Constellation Energy?
Posted by: JIm Brenza | August 5, 2010 5:05 PM
The latest offer we have received from Constellation for electric ((9-21-2010) is:
1 yr fixed @ 9.55/kWh + $25 Target gift card or
2 yr fixed @ 9.45/kWh + $50 Target gift card
Posted by: Steve | September 24, 2010 8:32 AM
Be wary of BGE's offer (of a free Target gift card).
Haven't seen mine yet and it's been over 3 months!
Posted by: RA Marshall | January 5, 2011 9:50 AM
Very competitive rates in BGE territory now. Spark has one for under 9 cents and no termination fee. see here, where comparison rates are posted and updated: http://www.loweryourelectricrate.com
Posted by: Z. Rothsfeld | July 20, 2011 2:08 PM