CLEVELAND — Starting in June, the price of electric service for many FirstEnergy customers is set to increase dramatically. However, there are ways for affected customers across Northeast Ohio to save money.
Most electric bills in the state of Ohio contain two parts: usage and generation.
FirstEnergy says while its utilities are responsible for delivering electricity to your home or business, they do not generate that electricity. That is the role of an energy supplier. Those customers who do not shop for electricity supply are charged a default generation rate, called the “price to compare" on a bill or also known as a "Standard Service Offer" (SSO).
Due to the increased cost of purchasing power at recent auctions, FirstEnergy says starting on June 1, the SSO will be increasing for those customers who utilize Ohio Edison, Toledo Edison and The Illuminating Company. Those customers who are contracted with an alternate supplier or government aggregator will not be affected.
How bad did the auctions go for FirstEnergy? In an email to 3News, the company explained that the average weighted price of its three auctions was $101.08 per megawatt hour, up from the current price of $53.62. For customers, that means that a current base cost of just over 5 cents per kilowatt hour is expected to double by early June.
The spike in electricity costs is not just limited to FirstEnergy. AEP Ohio has announced that its customers will see a nearly 30% hike in their electric bills starting this summer.
Despite the rising price, customers do have options.
First, Northeast Ohio Public Energy Council (NOPEC) executive director Chuck Keiper told 3News that in June, NOPEC customers will be automatically enrolled in a lower rate for six months, with the option to opt out.
Keiper added that customers will be guaranteed electricity at 6.5 cents per kilowatt hour, significantly less than the 10.2 cents per kilowatt hour price that it is expected to jump to in June. NOPEC customers will receive letters in the mail with more information in the coming weeks.
Also, customers can go shopping for a different generation supplier.
"Contracting with an alternate electric generation provider is the best way to avoid this significant rate increase," explains Matt Brakey, president of Brakey Energy, a Chagrin Falls-based energy management firm.
As FirstEnergy explained to 3News, a variety of energy pricing options and plans are available from third-party generation suppliers if a customer chooses to shop. A careful review of those options could result in potential savings this summer. When evaluating options, customers should consider:
- Energy price
- Plan structure (fixed or variable rate)
- Contract terms and conditions
- Any taxes, charges or fees that may apply.
"When it comes to suppliers, look for those with no monthly fees, no early termination fees," Brakey advised. "You may pay a bit of a premium for a long-term contract, but you can set it and forget it and not have to worry about this giant spike in SSO rates."
The Public Utilities Commission of Ohio (PUCO) has put together a comprehensive guide to shop for other suppliers and make "apples-to-apples" rate comparisons. Click here for more.
"Most customers are going to be alerted to this issue in the summer where more power is used for cooling," Brakey added. "They're going to see sky-high bills and wonder what's happening. Customers then will be taking the step that they should be doing in the next month, contracting with an alternate supplier."