In November of this year the Pennsylvania Public Utility Commission (PaPUC) made a big change in the way energy brokers could define the services they have to offer. The result of this change is better protection for the consumer, but the ruling also helps those companies who already truly offer fixed energy pricing (UEA) by more clearly defining the differences in fixed rate and variable pricing. Within the new guidelines are several things the consumer needs to be aware of to protect themselves, and we’ll outline them for you here.
Fixed vs. Variable Price
According to the new law, each term is defined as follows:
Fixed Price: An all-inclusive per kWh price that will remain the same for at least three billing cycles or the term of the contract, whichever is longer.
Variable Price: An all-inclusive per kWh price that can change, by the hour, day, month, etc. according to the terms and conditions in the supplier’s disclosure statement.
Previously brokers could pass through charges on their “fixed price” plans and the only thing that was truly fixed was the actual cost per unit, and you will see a fluctuation in your bill because of all the add-ons that aren’t included. Examples would be congestion caused by high usage in the coverage area and the over- or under-use charges, which happens when you use too much or too little of the agreed upon electricity. Now, if suppliers aim to pass along these charges they must label their service as variable rate up front, as this is how it would make sense to most consumers.
The only way a broker can use a different term for the length of the contract is in a temporary introductory price offer, which is an offer that runs 1-3 months at a special rate and then is classified as fixed or variable for the rest of the contract.
Unforeseen Broker Costs
If the broker’s contract becomes unprofitable due to unforeseen costs they cannot pass these costs along to the consumer who signed their contract without the customer’s consent. In this case the broker would be changing the terms of the contract and must reach out to notify the customer that a change in terms is needed. To protect the consumer, the law states that if no response is received it’s considered a rejection of the new terms, and would then be placed on default service without penalty. Any rejection allows the customer a chance to pursue other options in the energy market without penalty.
As you can see, the November 2013 guidelines set forth by the PaPUC give the consumer the upper hand against these common 3rd party tricks the electric suppliers previously were able to leverage. Now more than ever the advantages of signing a fixed-rate energy deal with Unified Energy Alliance are apparent. If your business is interested in pursuing better energy options, or would simply like an expert to review your current contract, feel free to contact us today!