The truth about switching electric supplier to save money on electric bills for hot summer months

I live in an area where your AC runs mostly all day long to maintain a comfy 72 degrees inside temperature and my electric bill is $250-$400 per month for 3 consecutive months during the peak summer months. To try and save money of my electric bill, I conducted an energy audit for my old victorian home. One suggestion by the auditor was to shop for a better rate on my electricity.

Today I would like to share my experience of switching electric supplier to save money on my electric bills.

My first step was to shop for an electric company by rates. Here are the lessons I learned:

1. Before you shop for a new electric supplier, analyze your bill to determine your current electric supply rate (Example1). You will be surprise to learn that most of the electric suppliers will offer a higher rate than what you are currently paying.
2. After I learned my current rate, I reviewed this website: https://www.papowerswitch.com/
3. The best rates ($0.052/kWh) are only available for a short 3 months introductory contract, then I need to sign a new contract at a rate that is slightly higher at $0.0709/kWh than my original price of $0.066/kWh
4. The savings will only apply to ½ of my electric bill, not the whole bill. My electric bill is split into two: electric delivery charge and electric supply charge. The savings only applies to the supply charge.
5. If I forget to cancel or renew your contract, my variable rate will be a whopping $0.1289/kWhand I will be charged a $10 monthly service fee.
6. Correspondence are all sent via snail mail which can easily be lost since I get so much daily junk mail
7. There is a $10 per month contract cancellation fee if you terminate the contract early
8. If you successfully cancel or switch back to your old rate, it will not apply until the next billing cycle date. This means you will have to pay the high variable rate of $0.1289/kWh until your next billing cycle date which could be anywhere from 1-29 days. This sneaky variable rate will negate any, if not all, of your savings. I strongly suggest you switch electric suppliers a few days prior to your billing cycle date to minimize unnecessary expenses if you do decide to switch electric suppliers after reading my post.

Example1

Now, let’s look at the savings and you can decide if it is worth the headache and trouble of switching electric suppliers.

The additional charge in red came from the 13 days which I had to pay a high variable rate of $0.1289/kWh because my introductory contract ended and I did not want to renew a contract to pay $0.0709/kWh when I could switch back to my old rate of $0.066/kWh. However, the switch will not apply until the next billing cycle which was 13 days away. I used 798 kWh during those 13 days, which cost $102.94 plus a prorated monthly service fee of $4.49 (Example2). Ultimately, I saved $18.07 (3 months savings) by switching electric supplier (Example3). If I timed everything perfectly and avoided any additional fees, I would have saved $84 on three months of electric bills. I also spent about one hours being on hold on the phone to speak with both electric suppliers regarding rates and cancellations.

Example2

Example3

The best strategy is to sign up for 3 month contracts with no cancellation fees for the peak summer months because they have the best rates. Make sure you stay of on top of the contract dates to avoid high variable rates after your contract ends.

My goal is to expose the truth about switching electric suppliers and save you time and headaches. I hope you found this post beneficial. Let me know if you have any additional questions.

Stay cool this summer.

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