Buying deregulated electricity or gas – What a Favorable Contract Could Be

Interfaith Coalition on Energy – November 9, 2013

When you buy electricity and/or natural gas from third party suppliers, you leave the protection of the Pennsylvania Public Utility Commission. The only “protection” you have is the contract written by the suppliers in their own best interest. They are usually written in legal language in small print.

Here are some guidelines that you could follow:

In choosing a supplier:

  • There are hundreds of third party suppliers because that business is profitable, often very profitable.
  • Do not rely on utility or Public Utility Commission advice.
  • Buying from a vendor has risks, but so does staying with your local utility. One difference is that you have PUC protection with your local utility.
  • Vendors may refer to your local utility website’s estimates of future prices. These estimates are likely false. Utilities typically revise their prices quarterly.
  • Do not pay any attention to phone conversations, face-to-face conversations, or mailings. The only thing that matters is the final contract with firm fixed pricing.
  • Do not release your local utility account numbers until you seriously consider one vendor you trust.
  • Vendors understand that congregations do not usually have lawyers, accountants, or consultants with utility rate experience. To them, you may seem like ripe, low-hanging fruit, ready to be picked.
  • The Archdiocese of Philadelphia and the Presbytery of Philadelphia signed long-term contracts with a reputable supplier. In both cases, the deal was not anywhere near what a good deal should have been. What makes you think you can do better on your own?


An ideal contract with a third party supplier:

What if the contract were written in your terms rather than the suppliers’? Since you are paying them rather than the other way around, why shouldn’t you dictate the terms? I know this may not be workable, but here are my thoughts about proposals from vendors:

  • The contract and price includes everything that your local utility prices include.
  • Your supplier will suggest a price just under PECO’s so they can maximize their profit. Why not ask for a price guaranteed to be less than your local utility’s price at any time for any given account. A price higher than that brings immediate cancellation without penalty.
  • No automatic renewal.
  • No monthly “customer fees” or “cancellation charges” or State sales tax.
  • No assignment of your contract to another supplier without your written permission
  • Your bill for third party power must be on your local utility’s monthly invoice.
  • Obtain and read contracts carefully before signing or agreeing. Get technical and legal advice.
  • Seek out and go with major and established suppliers.
  • Usually, aggregators, brokers, and multi-level marketers do not have the best deals.
  • Determine how you can make sure your congregation is actually saving money.

Once you sign the contract:

  • Mark in your date book a month or more before contract ends.
  • Determine if your congregation actually saved money with your supplier.
  • Check for automatic renewal that may not be in your best interests.


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