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Business Electricity

Businesses who shop for competitive electricity rates need to focus on more than just the highlighted electric rate on the contract.  Commercial and industrial electricity customers face a wide range of potential traps and hidden fees that residential customers do not have be concerned with.  The states that have competitive electric markets have many laws set up with the electricity companies to protect residential customers, these laws are not as strictly enforced for business electricity offers.

Business electricity customers need to emphasize the importance of comparing the entire electric contract between electric companies and not just the rate.  Not all electric rate offers are a true apples-to-apples comparison.  Some business electricity rate offers do not include the entire supply portion (energy charge, capacity charge, transmission charge, etc.) and thus will appear lower than a rate that does include everything.  The business electricity contract will state everything that the rate includes and everything that it does not include.  Though the writing is small, it is important to compare these electric rate offers.

In addition to the potential of hidden charges in the rate, there could also be a hidden charge on the contract in the form of a fixed meter charge.  Businesses with many properties and meters who have a significant meter charge tacked on could find themselves paying the equivalent of an extra penny on their electricity rate.  In most cases, businesses should not have to pay a meter charge at all, so if there is one stated on the contract ask to have it removed.

Yet another price trap business electricity customers should fear is a low swing or bandwidth.  Business electricity contracts will usually have a stated swing variation measured as a percentage.  Swing is the amount of electricity a business customer can use, above or below, the expected usage amount before penalty charges take place.  For example, a business customer who is estimated to use 100,000 KWh over 12 months and has a 10% swing variation can use 90,000 to 110,000 during the 12 months.   If they use less or more than that range, they will face extra charges.  Ask to have at least 20% swing or bandwidth stated in the contract.  Don’t confuse “no swing” in the contract as 100% swing, “no swing” can mean 0% swing which would mean a penalty charge for anything above or below the exact estimated amount.  On the other hand, “full swing” means that there is no limit to the amount of energy you use above or below the expected amount.

ElectricRate.com compares all business electricity contracts to make sure the customer is getting fair and beneficial offers.

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