FREQUENTLY ASKED QUESTIONS
What is Electric Procurement?
Electric procurement is the purchase of electric from an alternate supplier. The generation and transmission portions of electric billing are now completely open to the market, meaning that your generation and transmission costs from the utility will change quarterly or even monthly depending on the size of your business. In most cases, if you are a business with good credit, you will save money with an alternate supplier. Purchasing through an alternate supplier will give you more costs stability, and in some cases will result in savings for your company.
What is the advantage of using AES to get Alternate Supply Pricing?
AES is a licensed broker through the Public Utility Commission. As Electric Procurement Specialists, we have extensive industry knowledge and we are continually researching the current regulatory affairs set by the Public Utility Commission. We are in excellent standing with area suppliers in order to assist your company in finding ways to reduce your electric supply costs. We work with suppliers on a non-biased basis, recommending those who are best fitted to address your company’s specific needs. We check the market prices every day to ensure that the prices we bring back to our clients are current. We also assist in interpreting contract terms to simplify the process for you.
Can I cancel an existing supply contract before the identified contract end date?
When you switch to a third-party supplier, power is typically purchased at the contract signature date for the term that was signed (typically between 12 and 36 months.) Suppliers typically have contract language in place protecting them from consumers switching in the midst of a contract, so consumers must be very careful of liquidated damages and early termination penalties that typically exist in breaking a contract early. A trusted energy consultant can help consumers walk through contract language and scenarios associated with early termination.
Can I save money by shopping for electricity?
In states which have deregulated and introduced competition, you may be able to save money by switching to a third party supplier. Energy markets are volatile, and default tariff rates frequently change. Therefore, many consumers switch to either lock in substantial savings or to lock in a long-term fixed number providing budget certainly.
Do I need an energy consultant to help choose a third-party supplier?
Choosing a third-party supplier can be time consuming and daunting as the available options and the number of supplier options continues to grow substantially. Consumers can have the luxury of an energy expert walking them through the myriad of different supplier options, and maximizing the leverage that AES provides in negotiating a third-party supply contract on our client’s behalf.
If I choose a new supplier, can I be certain that they will provide reliable service?
Your local utility will continue to provide the distribution services (poles and wires) to your business, and the local utility is still regulated by the State Public Utility Commission. There will be no difference in the quality, reliability, or the maintenance of your electric service.
Once I switch to a new supplier, when do they begin delivering my energy?
Depending on your meter read date, delivery can begin anywhere from 2 to 4 weeks. Actual supplier charges typically cary between 1 to 2 meter cycles or from 6 to 8 weeks.
Should I notify my utility before I choose a supplier?
Typically, your supplier will notify your utility on your behalf; you will not need to contact the local utility.
What does the Price to Compare mean?
Price to compare is the price per kilowatt hour that your utility charges for generation and transmission. PTC is sometimes referred to as your shopping credit, and is the price you would pay the utility if you do not choose a third-party supplier. Increasingly, the PTC’s from local utilities are changing frequently (30 to 90 days) and the volatility in the PTC’s has even greater than the normal “market” volatility.
What does the term POLR refer to?
POLR is defined as the Provider Of Last Resort. In deregulated states, typically the local utility is providing the POLR, or default rate, for those who choose not to shop for a third-party supplier.
What is Electric Deregulation?
Deregulation is the reduction of government power in the electric industry with the intent to create competition within the industry. Deregulation empowers retail customers with the ability to purchase their power from independent, third parties instead of the incumbent electric utility.
What is a Letter of Authorization?
A Letter of Authorization is a prerequisite to shopping on behalf of a retail customer. An LOA is also required to obtain usage data from your local utility so that suppliers can price a retail energy contract. LOA’s should not be binding documents, but merely a first step in the shopping process, and the binding agreement eventually occurs when a retail client chooses and signs a third-party energy contract.
What is an Electric Supplier?
An electric supplier is a company that provides the generation and transmission portion of your electric bill. In deregulated states, consumers have the freedom to shop for their generation portion of the electricity bill for either a longer term or at a lower rate than what is typically provided by the local utility. When you shop for an electric supplier, you are choosing the company that will provide the rate for the generation portion of your bill.
Who is eligible to shop for a supplier?
Businesses and homeowners who reside in deregulated states are eligible to shop for third-party solutions.
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