Electricity DeRegulation [Archive] - RetrieverTraining.Net - the RTF

: Electricity DeRegulation

Gerry Clinchy
01-09-2011, 11:26 PM
This is really getting to be a PITA.

Last year deregulation kicked in for my area. The rates went up 30% approximately for residential. They also offered a "time of use rate" with peak hours (expensive) for Jan-June being 5-9 PM when most homes use the most electricity (by a study they had done). The peak rate was about 30% higher than their "flat rate" for people who did not subscribe to the TOU program. And the "off-peak" (less expensive) rate on the program was only 10% less than the "flat rate".

I'd suspect that very few signed up for the program. It held the potential for paying more for electricity overall because the penalty rate was so high, while the savings rate was so low.

Now this program's rates are based on the cost of spot-purchasing of electricity by our local supplier. All of a sudden on Jan. 5 the TOU rates are adjusted to about 25% below the flat rate for on-peak usage & 30+% below flat rate for off-peak hours. Huh?

The rates on this program will adjust quarterly, beginning June 1, 2011. So, every quarter you have to look at the new rates and decide whether to stay on the program or go back to a flat rate.

Small catch 22 ... if you decided to purchase electricity from another supplier, it can take 2 months to change back to the local supplier, in order to participate in the TOU program ... by which time the rates will be about ready to change again. If you heat with electricty, then you are missing the boat during the most expensive time of the year.

So, if you stayed with the local supplier you end up having an advantage. Not to mention that you might have an early termniation penalty if you change back to the local supplier too soon.

This basically means that while you have this "freedom of choice", you may end up paying more than you need to for electricity.

The thought is that the non-local suppliers will also come up with a TOU programs themselves. And these suppliers may also have to remove any early termination penalties in order to stay in competition in this market area.

My guess would be that most consumers can't be bothered with changing suppliers quarterly. It's even a PITA to have to review the TOU program rates each quarter & decide whether you'll stay with that or go back to flat rate.

Everyone was amazed that the spot-price of electricity was so much lower than was aniticipated.

Unanticipated consequences again?

I just got a letter of confirmation saying that I'll be changed to TOU on 2/14. I wonder why I have to wait a month when they have all these smart meters?