Third-party suppliers.
When looking at a supplier’s rate quote, make sure it includes the following:
- Basic energy cost
- Capacity charge (the old peak demand charge)
- Transmission
- Line Losses
- ‘Ancillary’ charges
In addition to the basic energy cost you will be charged these taxes too:
- Gross Receipts Tax (GRT) (Ex. 6.25% in PA)
- Sales and Use Tax (SUT) (Ex. 6% in PA)
– payable on the energy charge AND the GRT,
(i.e. a tax on a tax – how do you like those apples?!)
The Local utility bill.
Separate from the 3rd party supplier bill, you have to pay the local utility bill, which includes the following:
- Local distribution charges
- Transition charges (smaller accounts only– goes away in 2011)
- Sales Tax (Ex. 6% in PA)
A Useful Rule of Thumb:
if there’s more than ½ a cent difference between supposedly comparable quotes, you’re probably not comparing apples to apples.
CONTRACTS
Similarly, there are a number of differences between supply contracts that you need to watch out for:
- Usage variance clause – if your usage differs substantially from historical usage, there may be a penalty with some suppliers, but not with others.
- Auto-renewal clause – this can put you on a much higher rate at the end of your first contract if you’re not pro-active, but we advise each customer well before renewal time.