Should You Switch Electricity Providers from BGE to Dominion?
If you live in Maryland, you likely received a promotional letter from Dominion Retail urging you to switch electricity providers from BGE to them. If your like me, the letter and whole setup is a little confusing. Apparently, if you switch to Dominion, all this really means is they will “arrange” the supply of electricity that BGE delivers to you. So your billing, services, and repairs will continue be through BGE, it’s really the back end work that would be changing.
Should we all be switching to Dominion is the question. Consider the following before making a decision:
- If you make the switch by September 17, 2010 and your one of the first 25,000 customers who enrolls, you are guaranteed a rate of 9.67 cents/kWh until May 2011. So essentially a year’s worth of cheaper electricity.
- Currently BGE’s rate is 11.901 cents/kWh, effective through September 30, 2010 and the rate will be reduced to 10.083 cents/kWh beginning on October 1, 2010 through May 31, 2011. Basically, because BGE is lowering their rate starting in October, the difference in rates for the year if you switch would be 0.413 cents/kWh—not a whole lot of difference really.
So, should you switch? I guess it doesn’t hurt because nothing really changes as far as your service, billing etc., just your rate, which will drop 0.413 cents/kWh. Also, after the promotional period, you have the option to continue with Dominion or you could switch back to BGE. At that point, you could just do another rate comparison and make a decision in 2011 based on which company will have the lowest rate (I was told that the average Dominion rate currently is 11.33 cents/kWh, higher than BGE’s “normal” rate for the year).
So for a guaranteed reduction in electricity with no real change in service and no fees to make the switch (I was also told on the phone that all of the fees associated with delivering the electricity that you see on your bill will remain the same), I don’t really see a reason not to switch to Dominion—at least during the promotional period.
[Update: 9/16/2010]
Upon receiving a letter from Constellation Electric offering a deal to compete with BGE and Dominion Retail, I thought it would be worth updating this post to compare all of the deals.
Here are the deals compared:
- Dominion
- 9.67 cents/kWh until May 2011
- BGE
- 10.083 cents/kWh beginning on October 1, 2010 through May 31, 2011
- Constellation Electric –
- 9.55 cents/kWh (If you sign on for 1 year)
- 9.45 cents/kWh (if you sign on for 2 years)
- In addition, if you are enticed by gimmicks, Constellation Electric will also offer you a $25 or $50 Target gift card for a 1 or 2-year commitment. (Maybe you should use the Target gift card for some weather stripping)
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Comments
BGE announced today, October 29 2010, that its residential electricity rates will decline 11% in June 2011. You don’t have to wait until then to reduce the cost of your electricity. You can do it now.
BGE now charges residential (schedule R) customers 11.083 cents per kWh for electricity supply. BGE’s customers can get their electricity supply at 8.9 cents per kWh from Washington Gas Energy Services (WGES). BGE delivers it.
To get WGES’ 8.9 cents per kWh price offer, you need WGES’ promotional code. Here it is. Go to http://www.wges.com . Where it asks “New to WGES? Enter your promo code here:” enter code: EAHOME-EA1016 .
If you enroll, WGES will supply your electricity at 8.9 cents per kWh. BGE delivers it, responds to emergencies, reads the meter, and does the billing. None of that changes. There is no service interruption. Nothing is connected or disconnected.
If you are on BGE’s budget billing plan, you can continue paying that way. If you move, you can terminate your WGES supply agreement without penalty.
Be aware of any company that you must sign a contract with. When I signed switched my energy there was no contract, no obligation and I can switch back anytime. I still received a good rate
Ciera:
Your admonition to readers to “be aware of any company that you must sign a contract with” (sic) is misguided. A contract is binding on both parties to the contract and spells out each party’s obligations to the other.
If you want to lock in a low fixed-rate price (8.9 cents per kWh) for one year, you are requiring the energy company to provide your electricity needs for one year at that fixed price. The way they do that is by going to the wholesale energy market and buying 12 one-month electricity supply contracts in order to have the electricity available for you and pricing it to you at 8.9 cents per kWh. They are putting up their money in advance – several thousand dollars – to buy the electricity to have available to you for the next 12 months. I don’t think it is unreasonable for them to require you to commit to them for 12 months while they commit (and put up money upfront) to you.
We know what BGE’s residential electricity rate is from now through May 31, 2011. It is 10.083 cents per kWh. If you want to lock in your electricity supply for 8.9 cents per kWh for the next 12 months, you are asking an energy company to commit to you and they incur costs on your behalf to do so. Each side commits to the other. You commit to buy your electricity supply from them for 12 months for 8.9 cents per kWh, and they commit to have and to sell electricity to you for 8.9 cents per kWh for 12 months.
There is a multi-level marketing company selling electricity on a month-to-month basis to residential customers in Maryland for 9.9 cents per kWh. Their 9.9 cents price is 10% higher than the 8.9 cents price offered by the other energy company (mentioned above). The 9.9 cent price is offerd by a firm with no contract which means that neither side commits to the other. Since long-term electricity prices are going up, a wise buyer would want to consider locking in a good price (like 8.9) for the longterm. That means the buyer wants the energy supplier to commit to them, and vice versa.
Does anyone have an offer code for Constellation Energy? TO make their 8.95 cents offer a little sweeter? I’m now locked with WGES until May 2012 at 10.8 cents, but figured that it will be worth it for me to switch to a lower price, even keeping the WGES early termination fee ($112) in mind.
After going with Constellation, you will still be charged a delivery fee by BGE on top of Constellation’s normal fees.
Jack: Of course BGE charges a delivery fee. They deliver the electricity to your home through their local delivery infrastructure, incur costs to do so, and charge for it.
There are two parts to your electricity service: 1) the electricity commodity, often referred to as your “electricity supply”, and 2) the utility company’s distribution service.
Maryland and about 16 other states deregulated the supply aspect – allowing you to purchase your electricity supply (commodity) from other energy suppliers. The distribution service is separate. It is still provided by your utility company – they own and maintain the local distribution infrastructure that delivers your electricity supply to your home. You pay for that, too. These items are itimized separately on your electric bill. About 70% of your bill is for electricity supply, and about 30% is for distribution charges (including taxes and other government mandated fees that are included in the distribution portion of your bill).
The electricity supply consists of two parts which are itimized on your bill: Generation Service, which is the cost of the electricity at the generation facility (usually a power plant), and Transmission Service, which is the cost to transmit the electricity through high voltage lines (the “grid”) from the generation source (power plant) to your utility company, who downloads it at transformer stations near you, takes custody of it at that point, and delivers it to you. Look at your utility bill. The cost of your electricity generation service plus transmission service equals your cost for electricity supply.
BGE’s price for electricity supply to its typical residential customers (schedule R) is currently 10.083 cents per kWh. You can get it for 8.9 cents per kWh from one of the major energy companies serving Maryland. That is the lowest price offered by any energy supplier in Maryland. To see the offer, go to http://www.lowerelectricityrates.com/bge .
It takes about 4 minutes to lower the cost of your electricity supply and costs nothing to do so.
[...] company options besides BGE? I recently stumbled over a blog, which said there were three options for choosing electricity supplier in Baltimore as at the time [...]
Compare Compare Compare. Having just moved back from Texas where choosing your electric supplier is very common. The one thing the Dominion letter doesn’t tell you is they are not your only choice.
check out the link on the state of Maryland page
http://www.oag.state.md.us/energy/
Be aware of cancellation fees, when terms renew, and your ability to switch back. Keep in mind BGE is still going to collect its fees. Not surprisingly BGE just increased their distribution fees after 15 years of the same rate.