Should I use an ESCO for my electricity?

February 14, 2017

What You Need To Know Before You Pick an Electricity Supplier (AKA "ESCO")

Saving money on your Con Edison bill

Beginning in the 1990s, New York State opened the State’s electric and natural gas industries to competition. This meant a profound change in how New Yorkers select their electricity providers. Essentially, New York residents that pay for their own electricity have the option to pick their utility (Con-Ed) or another third-party supplier, called an Energy Services Company (ESCO).

Plain English:
ESCOs mean an opportunity for consumers to choose the source of their electricity. Your local utility (Con-Ed) will still actually deliver the energy to your home, REGARDLESS of whether you switch to an ESCO. Picking an ESCO just changes where CON-ED gets the energy. ESCOs will not have control over the power grid; it will still be maintained by Con Ed.

 

What is Energy Choice?
28 states have deregulated electricity, which means that consumers now have a choice to select who will provide the energy that they use in their home. Only 28% of Con-Ed customers have selected an ESCO, although many more may have an opportunity to save money by using an ESCO (or have greater control over where their energy comes from).

For a complete list of deregulated states, visit this site

 

What does having the option to pick my ESCO mean for me, the consumer?
Since ESCOs are now competing for YOUR business, there is a greater variety of products and price options available to customers that want to pick their energy supplier. For example, you can select energy that only comes from environmentally-friendly sources, such as hydro-electric power, wind farms or solar power. Or, you can shop around for the best price on your electricity. 

So how do I pick an ESCO?
You may be looking for alternatives to Con Edison, or you may have received an offer to select an ESCO in the mail. 

First, compare the different prices and services offered by the ESCOs that are available in your region. You can go to each ESCO’s website individually to check complete information on the offers available and see current rates. 

 

What is the cheapest energy supplier in NYC?

You can find an ESCO search and comparison tool through ConEd's own Power To Choose website. 
or you can visit Choose Energy, a 3rd party that lets you compare ESCO prices, deals, and other features. Choose Energy has already done all of the legwork that ConEd's site hasn't, namely providing an unbiased ESCO review including ensuring there are no hidden fees, teaser rates, or other traps for consumers. Choose Energy is the best way to find out in a quick and methodical way which ESCO is best for your needs (and which ESCO will actually save you money on your electrical bill, if that is what your goal is). 

Can I really save money on my electricity bill by using an ESCO?
Common questions about ESCOs:


Will an ESCO really save me money?
Depending on the options that are important to you, you have an opportunity to select a provider that will save you money on your electricity bill. ESCOs do not necessarily save you money (for example, hydro, wind, and solar power may cost you more), but the freedom to choose and the variety of choices means that you CAN shop around for an ESCO that will save you money if you choose. 

 

How long do the savings last?
The majority of ESCOs operate on a one- or two-year contract.

Remember, regardless of whether or not you decide to switch to an ESCO, you usually will only get monthly estimates: prices can vary significantly from one month to the next as a result of market conditions, weather, and your actual usage. Some ESCOs offer fixed rate plans, which will be a little more costly in your low usage months and a little less costly in your high usage months, but have the advantage of a fixed bill, which can help you plan your budget by knowing ahead of time what you are going to pay on your electricity bill. 


You will also receive preferential tax treatment (tax savings) by switching to an ESCO. If you sign up using Con Edison’s PowerYourWay program, the usual delivery charges that show up on your electricity are not subject to sales tax.

PowerMove is another program through Con-Ed that provides further incentives to sign up for an ESCO. (7% discount off the Con Edison supply rate for the 1st two months.) This means immediate savings, although the savings are not guaranteed beyond the introductory period. 

 

How can ESCOs save me money?
ESCOs are able to afford cheaper energy than utilities like Con Ed, because they can leverage a larger buying power to purchase greater quantities of energy at one fixed price. Many ESCOs also partner with energy trading firms to avoid the volatility of energy prices, meaning you will pay closer to the same amount every month (not very high bills one month and very low the next, as can sometimes happen with Con-Ed electricity bills).  

Did you know? NYC energy costs are 54% higher than the national average. Whether or not you use an ESCO, BillCutterz can help you save money on your bills. BillCutterz negotiates discounts on your monthly bills (not just electricity). The average BillCutterz customer saves 30% or more on their bills. The best part is, if they don't save you money it's completely free. If they do save you money, they retain a small percentage. Learn more

What do they do if there are service outages?
Remember, the energy itself will still be delivered by the local utility. What is changing is where they source the electricty. So if there is an outage, you would call Con-Ed as normal. Outages as not more or less likely when you switch to an ESCO.


Price is the only thing that will change to the consumer when you switch from Con-Ed to an ESCO. 


Do I have to switch to an ESCO?
You do not HAVE to select an ESCO; your current utility (Con-Ed, for most) will continue to provide your electricity or natural gas if you do not opt to make a change.


What if I pick an ESCO and change my mind?
You have the option to rescind an ESCO agreement within three days of receiving the agreement without any penalty. After this date, but before the end of the contract term date, you may be subject to an Early Termination Fee (ETF).

What else should I know about ESCOs?
Be sure to be aware of your rights as written in the ESCO Consumer Bill of Rights. It is important to review the written terms and conditions of any contract prior to signing.

You can save money on your electricity bill by switching to an ESCO.


Final words
If you are serious about saving money on your electrical bill by using an ESCO, the best bet is to check out Choose Energy. Choose Energy only works with ESCOs that have agree to be audited, has tools to compare ESCO rates and features, has is hands down the best way to seamlessly compare options available to you.  


REMEMBER, regardless of whether you choose an ESCO, conserving electricity is always the MOST EFFECTIVE way to pay less on your bills. Want to save money on your electrical bills (and other bills) but don't want to, or don't have the time to, call them all up to negotiate? Save money on monthly bills with BillCutterz expert bill negotiation. Just send them your bills - if they don't save you money, you pay nothing. 


BillCutterz can save you money on:
Cell Phone
Internet
Electricity (in some states)
Cable & Satellite TV
Landline Telephone
Bundles (Cable / Phone / Internet)
Alarm & Security
Satellite Radio

Learn more

Information is believed to be 100% correct at the time of writing; however, we are not responsible for any inaccuracies or omissions. Always carefully read terms and conditions before deciding what is right for you.  Please note that this is general financial advice that is applicable to most people, but it is not a substitute for consulting with a professional financial adviser. Your mileage may vary. Affiliate links may be used as a means of providing revenue to this site when they are offered by the service provider. 
 

 

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© 2017 by SmartCityMoney.