Comparing Electricity Offers Apples-to-Apples

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As an owner or energy manager for a small dry cleaner, a mid-sized manufacturer or an industrial complex, you have the opportunity to get a custom contract.

These tips will help you get the right plan for your business:

1.     What’s your swing?
In addition to Energy Charges, standard Delivery Charges, Discretionary fees from some retailers and Taxes, your business electricity bill can include :

  • Swing, a charge for using significantly less or significantly more electricity than your contract states. (Be sure you know how each retailer defines swing.)
  • Retailers charge for swing to cover losses when they sell your unused power or spend more on the spot market to provide extra electricity.

2.     Odd Can be Good
Contracts that include spring and fall months can lower overall spending and can be tailored to match lease terms if that’s a factor. Ask competing retailers about odd term lengths and compare offers that include the same months.

3.     Understand Demand
If you’re lucky enough to own a nice, big boat, you know that you have to pay all year long for that dry dock even though you only use it a few months each year. Demand Charges from your Transmission and Delivery Utility work in a very similar way. Demand Charges, which are used to determine your TDU Delivery Charges, are based on the highest amount of electrical demand per month or 80 percent of your highest use for the past 11 months. Your retailer can’t change that so don’t fall prey to such promises and be sure your retailer has the expertise to provide ideas on how to manage demand and limit those charges.

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