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April 29, 2010

Electricity prices drop: What to do?

As reported by Liz Kay last week, BGE's default price for electricity generation and transmission will drop to an annual, blended rate of 10.6 cents per kilowatt-hour starting June 1. The actual charge on your bill will be around 11.8 cents for June through September. Then it'll drop close to the 10-cent mark for October through May 2011.

This'll save a typical Baltimore Gas & Electric customer about $160 a year compared with costs for the 12 months that end this May, BGE estimates. But independent suppliers are offering to sell electricity to BGE customers for even less, although navigating the offers takes some work. I'll tell you what I think is the best move, but take my advice with a ton of salt. I'm locked in on a three-year deal with Washington Gas Energy Services for 10.8 cents. I saved money in this cycle but now I'm missing out on deals that have fallen into the 9-cent range. Locking in at that price for such a long time was the wrong move. I may look into paying WGES's early-termination fee and making it up on savings from a cheaper deal.

Bottom line: Wholesale prices are still in the pits, relative to where they've been. It's possible that even cheaper deals will be available to BGE customers in the fall. WGES is offering to renew current customers whose contracts expire in June for 9.6 cents for two years or three. This is a very good deal, although it doesn't seem to be available to new customers on the WGES Web site. (An intermediary called Electric Advisors says it will hook new customers up with WGES's package at 9.7 cents for a year or 9.6 cents for two or three years.)

But if I were starting from scratch and rolling the dice a little I'd sign up for the new offer from Dominion Retail. It's 9.9 cents from now until the end of 2010. And unlike with other offers, there's no early-termination charge. You'll escape paying BGE's high standard price for June through September (11.8 cents). Then you'll be able to shop around again in the fall or at the end of the year and hope for even lower prices.

Posted by Jay Hancock at 6:00 AM | | Comments (12)
Categories: BGE/electricity
        

Comments

Here is how you can get the 9.6 and 9.7 cents per kWh pricing referred to in the article above. It is available from Washington Gas Energy Services (WGES), a leading energy company that provides electricity to BGE. Electric Advisors, Inc., a licensed energy broker in Bethesda MD, markets the 9.6 and 9.7 cents price offer from WGES.

Go to WGES' enrollment site at www.wges.com. Where it asks "New to WGES? Enter your promo code here" enter code: EAHOME-EA1016. This code will bring up the 9.6 and 9.7 cents price offers. You must enter the code to get the low pricing.

If you enroll with WGES, BGE will bill you for the electricity you use at WGES's price rather than BGE's higher rate. If you are on BGE's budget payment plan, you can continue paying that way. If you move, you can terminate your WGES' supply agreement without penalty.

If you want, you can also do something nice for the environment. Select a clean, green wind power option to support eco-friendly power generation.

If you enroll with WGES, BGE will continue to deliver your electricity, respond to emergencies, read the meter, and do the billing as always. There is no interruption in service. Nothing is connected or disconnected.

Need more information to make an informed decision? Call 202 550-8357 anytime.

Thanks for deciphering the details, Jay.

Thanks Jay. I was on Dominion's 10.37 cent plan., I just called them and asked to switch to the 9.9 cent plan. They switched me over, no questions asked. I've been saving about $15 a month since switching from BGE in January.

Question - If you are signed up for BGE's Peak Rewards, does switching forfit the rebate that you recieve during the summer months?

No. Switching to WGES or anybody else will NOT nullify Peak Rewards. Peak Rewards is part of BGE, which will always be your electric utility whomever you buy your juice from. JH

I find it to be questionable that Constellation came out with the 10.25 cent offer and a couple weeks later they announce that energy costs are dropping. Had I not been taken in by that scam, I would probably keep BGE with budget billing.

WGES has an F- rating with the BGE.

They continue to attack businesses using scare tactics saying "lock in rates are going up."

Why do you push an F- BBB company through the newspaper/

Are you aware of how much people have overpaid with this company from their overzealous con artist sales people.

Michael Strotz:

Why does you company have the worst possible rating with the BBB and multiple complaints with the public service commission? Care to answer that in a straightforward manner?

Just wait: once you "lock in" rates for BGE will drop. It happens 100% of the time and you will save for 3 months and overpay for 9.

For those of us who signed up for a long term deal with WGES at 10.8, are we just out of luck?

BBB may have an F rating on WGES, but my experience with them has been wonderful. Took me all of 5 minutes to sign up on their website. Started saving 20% with my next electric bill. Year later, I'm renewing and continuing to save 20% vs BGE. (9.6cents vs 11.78 during the peak cooling season).

I haven't had any issues with WGES, either. JH

Like you I'm locked in with Washington Gas at 10.8 for 2 more years. Perhaps fortunately, my termination fee would be $7 a month (not $20 as it is for current contracts) or $168 for the remaining 2 years. I talked to them yesterday and they have something they call the "extended blend" which would extend the contract for a year (I'm guessing a little a this) at a new rate. They said they would call me with a new offer, but it would take a week or two to work up the new rate.
Of course, I've been trying to do my own calculations to see what would be a rate I would consider. Anything lower than 10.8 would save me over 2 years, but part of the problem is how much of that savings would I "give back" by paying a (probably) higher rate in year 3 (WGES current rate is 9.7). I've also tried to calculate what I would save by paying the $168 and enrolling in a WGES 2 year plan at 9.7 (if they would even let me do this).
It seems to get interesting around the 10.0 level. Using 12000 kwh in the calculations, I come up with a 2 year net of $156.
You might want to try your own calculations; math is not my strong suit. But, I just though I'd pass along that there is a possibility of reducing the 10.8 rate you now have with WGES.

Are you taking WGES up on the "Extended Blend" offer? I just looked at BGE's website, I may be wrong, but rates may be 9.5 cents during the Fall. I'm wondering if it would be better to hold off and ask for a rate review then.

Just heard from WGES on the "blended extend". Their offer was 10.4 cents which seems hardly worth the effort. It seems like a better shot to wait for the fall or perhaps next summer to see where rates go. I did not take them up on the 10.4 offer. 10.4 would save about $96 (at 1000 kwh per month) over 2 years (from the 10.8 rate). But, you'd give most of that back in year 3 if the rate was 9.7 (WGES current offer).

There is absolutely another great choice.
Variable rate, which means when BGE rates dip, so do theirs to maintain a savings across the board.
20% green product! Also a 100% green product available, still cheaper than BGE.

* GREEN ENERGY!
* LOWER COST!
* NO CONTRACTS!
* NO EARLY TERMINATION FEES!
* BGE STILL BILLS AND SERVICES
* BGE WANTS YOU TO SWITCH, BY LAW THEY CAN'T PROFIT FROM GENERATION!
* NO CREDIT CHECKS!
* IF YOU WANT TO PAY MORE, NO HASSLE TO SWITCH BACK!
* SWITCH NOW AND START SAVING MONEY
Save money, and do your part to turn the grid green!

410-941-8182
http://www.nomorebge.com/

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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