At UGI EnergyLink, we believe that helping our customers understand how and when to shop for energy will help them regain control with their provider. Customers should not be forced to make a quick decision when choosing a supplier. It is always wise to do your research and understand how the market works. We like to build relationships with our customers where they feel they can rely on us to obtain information to help them make informed decisions regarding their energy costs. Here, we will go over the components of a utility bill, the utility price to a company, and when is a good time to shop around for your energy. This will give you, the consumer, the tools you need to understand what is best for your home or business.
Components of a Utility Bill
The items that a customer will typically see on a bill are customer service charges, taxes, distribution (delivery), and generation charges (supply).
- Customer Service Charges: These charges help to pay the back-end office processes. For example, accounting must calculate the usage and process the bill. The meter reader will come to your house, read the meter, and submit the data. This information is then processed by back-office to help form the bill.
- Taxes: Natural gas companies are charged taxes. Both companies and residential are charged Gross Receipt Tax (GRT) for electric bills.
- Distribution (Delivery): The utility has a section of pipeline that goes to your meter. There is a charge for using this line. This charge is to help maintain the line and operating costs. In many ways, it is like paying a toll for using their lines.
- Generation Charge (Supply): This charge will vary based on your provider. In PA, the utility must post their price to compare for consumers. The generation charge is bought from the natural gas or electricity you use at the property. This is sometimes referred to as a commodity.
Utility Price to Compare
One thing to remember is that not every state must post its prices to compare. As stated above, PA must post their price to compare for utilities. Here, we will go over how often the price to compare is updated. You are entitled to ask if GRT is included in pricing and the difference between fixed price for long term versus utility price to compare.
- How Often is Price to Compare Updated: Each utility is different; some utilities update every month, and some update quarterly. It is important to know your utility and how to look them up. You can also call your utility and ask for assistance.
- Ask if GRT is Included: GRT is for power, and some utilities include this in their price to compare. It is important to know this if you’re shopping around and want to compare apples to apples.
- Difference Between Fixed Price for Long-Term Versus Utility Price to Compare: This is where you, the consumer, take control. Do you want the fluctuation pricing of utility price to compare? Be sure to watch how the pricing goes up and down and ask questions. Suppliers cannot promise savings but offer fixed pricing where you, the consumer, have the control.
When is a Good Time to Shop Around?
This is a good question that many customers have asked over the years, and the answer is different for natural gas and power. Why is it different?
- Natural Gas: One thing to think about when shopping for natural gas is when it is used the most. During the summer or winter? The peak months for natural gas are January and February. Peak months are the time of year when natural gas is often used the most. This means pricing for natural gas is high. When looking for lower pricing, summertime is the best time of year for natural gas.
- Power (electricity): The same question must be asked here. When do you use more electricity – summer or winter? July and August are peak times for power. This means that it is best to shop around in the fall and winter for power.
Questions to Ask When Shopping Around:
- Is GRT included in my pricing? If your utility includes GRT, you want to know if the supplier is doing the same.
- Are there cancelation charges? Always find out if there are cancelation charges and the amount. If, for some reason, you’re not happy, you may be able to cancel without charge.
- Are all components locked? Sometimes, the price is low, and only one part of the gas or power is locked, and the other is variable. If the market goes up, you will be subject to market price in variable price.
- Is this full requirement pricing? Full requirements ensure your price is protected no matter how much gas you use. Gas is bought on what you used last year, and you can use more or less than your allotted amount. Protecting your price is important.