Utility Company Rates and Electric Supply Provider

[nakulak]

As a residential customer, what is up with the Electric Supply companies.

A little background:
My supplier is BGE (Baltimore Gas), and they have been supplying me power for last 20 or so yrs. They charge me $.1197/kwh. Now I have received in the mail two offers - Dominion power offers to save me 12% ($.1037, and Constellation Energy 14% ($.1025). I have summarized the details below:

1) BGE $.1197/kwh
2) DOM $.1037/kwh, can cancel anytime with no penalty
3) CON $.1025/kwh, 2 yr contract, $150.00 early termination fee.

Now here's the kicker. CON bought BGE last year. How can they sell me the power cheaper than They are already supplying it ?.

I have contacted all 3 suppliers, and they say there are no hidden fees (of course, the teenage girls answering the phone weren't exactly rocket scientists).

Now I understand that the portion of my bill that this pertains to is only power supply. Currently on my electric bills, approx. $170.00 is supply, and approx. $100 goes to other fees. So if I go to DOM, which I plan to, I stand to save approx. $250 bucks a yr.

What I don't understand is how this operation works, especially the part where a utility company already supplying me power can supply it cheaper if another part of their own company sells it to me.

So my qustion is, Is this deregulation of the power companies waiting for another Enron style bailout to happen, or is there a legitamate operation going on here that isn't going to end up biting the taxpayers in the butt again ?

(Mods, I understand this may not be a suitable topic for this forum, so if you delete I understand).

 

[mivey]

As a residential customer, what is up with the Electric Supply companies.

A little background:
My supplier is BGE (Baltimore Gas), and they have been supplying me power for last 20 or so yrs. They charge me $.1197/kwh. Now I have received in the mail two offers - Dominion power offers to save me 12% ($.1037, and Constellation Energy 14% ($.1025). I have summarized the details below:

1) BGE $.1197/kwh
2) DOM $.1037/kwh, can cancel anytime with no penalty
3) CON $.1025/kwh, 2 yr contract, $150.00 early termination fee.

Now here's the kicker. CON bought BGE last year. How can they sell me the power cheaper than They are already supplying it ?.

I have contacted all 3 suppliers, and they say there are no hidden fees (of course, the teenage girls answering the phone weren't exactly rocket scientists).

Now I understand that the portion of my bill that this pertains to is only power supply. Currently on my electric bills, approx. $170.00 is supply, and approx. $100 goes to other fees. So if I go to DOM, which I plan to, I stand to save approx. $250 bucks a yr.

What I don't understand is how this operation works, especially the part where a utility company already supplying me power can supply it cheaper if another part of their own company sells it to me.

So my qustion is, Is this deregulation of the power companies waiting for another Enron style bailout to happen, or is there a legitamate operation going on here that isn't going to end up biting the taxpayers in the butt again ?

(Mods, I understand this may not be a suitable topic for this forum, so if you delete I understand).

The difference is due to different supply assets. If the companies truly merge, these costs will converge as both parts of the company will fully share the same assets.

There is usually a little transition period. Sometimes this transition period is mandated by the entity having over-sight. They don't want the existing customers on the cheap rates to suddenly pick up part of the tab for those with the high rates, even though that is what will eventually happen. Rate shock makes voters unhappy and the entity having oversight is subject to some sort of election process.