Commercial Energy Rates, Plans, and Suppliers

Published: February 26, 2019

Non-profits, for-profits, Certified B Corps, and Fortune 500 companies all have one common goal: keep operating costs low. For most businesses, this includes keeping energy expenses to a minimum. Keeping the lights off is probably not the most effective way to operate your business and save money. There a many other ways to reduce your expenses. Shopping for the best energy supplier, upgrading your lighting to LEDs, going solar, lowering your demand costs, and a comprehensive bill audit are just a few strategies that are likely more effective. 

Commercial Energy Rates versus Residential 

In general, businesses pay different rates than residential customers. Warehouses, hotels, gas stations, manufacturing facilities, even churches and schools are on a commercial rate classification. There are often several commercial rate classes generally broken down by usage or load factor. 

Energy Deregulation for Business

The deregulation of energy has opened the market to many suppliers within the different marketplaces. At its core, the marketplace has led to competitive pricing and different contract terms. These choices and options can be used to the consumer's advantage - if they are strategic in choosing the correct supplier and contract terms.

Comparing Energy Supply Rates

Conversely, it has made it difficult for consumers to generate an apples to apples comparison. Why? Energy rates are made up of MANY components. Suppliers may exclude one or two and just make mention of it in their contract language. These charges are then passed through at the market rate. However, leaving something out like Gross Receipt’s Tax (GRT) would artificially make one supplier lower than the other. If Supplier A includes GRT and displays a rate of .0831 and Supplier B excludes GRT and displays a rate of .0777 and passes through GRT, who is lower? If you guessed Supplier B, you would be wrong. If Supplier A were to exclude GRT, their rate would only be .0775. Minor difference, but you could be paying more than you need to.

Diversegy provides a true apples to apples comparison. How? We will display both Supplier A and Supplier B with (or both without) GRT to a customer. So, Supplier A would be displayed at .0775 and Supplier B would be at .0777. 

Retail Electricity Suppliers

Retail Electricity Suppliers (or REPs) are regulated by the state utility commissions. Suppliers must be first be approved by the state and then at the utility level. Some states have over 100 approved suppliers. Diversegy vets all of our suppliers for the following criteria: 

  • Contract Language: Do they include all of the typical price components? Are they excluding anything that may be harmful to the customer? Is there auto-renewal language? 
  • Fixed rate: Is it a true fixed rate? Or do they offer a low introductory rate then switch to a higher rate? 
  • Credit worthiness: Suppliers go under, just like any other business. This can put a customer in a pickle. In a long-term fixed rate, the supplier goes under and drops the customer back to the utility during peak months. The customer ends up paying a significantly higher rate than they budgeted for. If you enroll through Diversegy, and a supplier does default and return you to the utility - we will reach out and secure you the best available rate at the time. 

We work with over 35 suppliers nationwide to serve customers both large and small. 

Fixed versus Index Energy Rates 

Diversegy works with a variety of customers - from large industrial manufacturing companies to small gas stations. Small to medium sized businesses benefit from fixed rates that provide budget certainty and mitigate risk. Large and industrial business often benefit from more unique product structures that may fix certain components of the energy price and float or block other components. Small to medium sized businesses can find rates to compare online with an easy to enroll website. 

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