Dear Bird: I’ve been approached (many times!) by “green” energy groups—at the farmer’s market, in front of my neighborhood grocery—asking me to switch to their service. I’m into renewable energy, and I love the idea of powering my home with solar or wind. But…are these groups for real? Should I take the plunge?
Windy in the City
New York, NY
Great question! We’ve also seen these folks at the market. Yes, they are for real. Bill McKibben(!) even profiled one of them, Green Mountain Power, in the the New Yorker.
Whether it’s Green Mountain or another “green” group, they likely represent an energy service company, or ESCO, which procures or produces electricity for residential customers like you (as well as commercial customers). ESCOs must be certified by the New York State Public Service Commission.
ESCOs became popular in the late 1990s in the wake of deregulation, offering consumers more choices and, sometimes, lower prices.
Here’s the catch: signing up with an ESCO doesn’t mean you’re switching your home directly to renewable energy. It’s impossible to know exactly where or how your specific electricity is generated.
When you sign up, the ESCO purchases wind or solar power on your behalf and it goes into the pool of electricity produced for the entire state or region where you live. This is the energy infrastructure grid, or sometimes just called “the grid”.
Nor does signing up with an ESCO mean you’re leaving behind the big utilities. ESCOs do supply energy for the grid, but Con Ed and National Grid still deliver it to your home (more on that in a bit).
Signing up with an ESCO does mean that you’re supporting and expanding the opportunity for renewable energy to be produced in New York State.
Take the Plunge?
Whether or not you should take the plunge is a trickier question—switching utility providers is more complicated than buying an apple. Call us a cautious bird, but we’d recommend getting a pamphlet at the market and then heading home to do some more research.
After all, there are many ESCOs—83 at last count—and a range of services out there. Not all offer alternative energy. And not all of them will save you money.
So, what are your goals? Save money or support renewable energy? Or both, if possible? Once upon a time, switching to renewable energy meant paying a premium, but as more supply -and suppliers- come online, prices have fallen.
Now, take a really close look at your utility bill. We know, it’s not fun… but pull out bills from the past year. Compare them. Do they vary month to month? Seasonally? Knowing how much electricity you use during different seasons and how you’ve been charged for that usage will be a helpful guide for evaluating your choices.
It also helps to understand differences in charges. Your electricity bill consists of two components. One is for the supply of electricity, which is what this choice is about—ESCOs supply the electricity or natural gas.
There is also the delivery component, which reflects the costs for building, maintaining and transporting electricity from the point of production to your home. This is the work that Con Ed and National Grid do to earn their money.
Delivery accounts for at least 50-60% of your bill. Both supply and delivery charges are based on kWh, or the amount of electricity you actually use in a specified period – usually 30-32 days. Your choice of a supplier may affect the supply charges on your electric bill but it will have no effect on delivery charges.
Then take a thorough look at what the ESCO is offering. Where does the power come from? Different ESCOs supply different types of renewables—from wind to biomass. And of course, look at cost. Some ESCOs offer fixed-rate plans, while others vary rates with the energy market.
Buyer Be At Least A Bit Aware
While ESCOs are for real, some have used less-than-savory selling tactics such as “slamming” (switching customers to an ESCO plan without approval) and misleading customers, especially during door-to-door sales calls. Slamming is (of course) illegal and utilities like Con Ed will switch back “slammed” customers when notified.
And the Public Service Commission recently adopted stronger consumer protection standards, including a Consumer Disclosure Statement that you should see on the first page of any sales agreement.
Here’s a round-up of useful links to get you going:
- Con Ed’s Choose Energy site lets you compare electricity and natural gas costs by zip code. It’s a great place to start.
- The Public Service Commission website has a helpful, if dense, guide to choosing an energy supplier.
- Con Ed’s Power Your Way site lists all the Green Power Providers (ESCOs) in New York State.
- The PCS website offers a directory of ESCOs and a comparison tool. They also provide Residential Complaint Scorecards for the ESCOs.
Have you switched to an ESCO that supplies renewable energy? Or, do you have another question for us to dig in to? Drop The Bird a line – we’d love to hear from you!
Betsy Imershein provided the research and co-wrote this column with NYER. Thanks, Betsy!