Whether your business is located in JCPL, PSEG, Rockland Electric, or Atlantic City Electric, there are a few basic questions you need to ask while shopping for New Jersey competitive business electricity rates. You need to make sure the supplier will not charge you extra if you go above or below your estimated usage each month. If you are looking to sign a fixed rate the supplier will immediately buy the estimated amount of kWh’s you are estimated to use over the period of the contract which is based on your historical usage. While commercial competitive electricity suppliers offer 100% bandwidth, it is not uncommon for electricity suppliers to offer a 10 or 20% bandwidth. This means if you go above or below your estimated usage each month by 10 or 20% you can be hit with additional charges by the supplier.
Another question to find out is what kind of rate structures are offered by suppliers who service the New Jersey electricity choice market. The 3 common rate structures are fixed, index, and block. Fixed rates are more ideal for small businesses looking for price security. Locking in a fixed rate will protect your business against future market spikes. Index pricing will tie your business directly into the wholesale market of electricity. Although in recent years this product has outperformed fixed rates on an annual basis, you will be subject to the volatility of the energy market. This means your electric bill can easily triple in one month’s time. Block pricing is the combination of the fixed and index product. Most New Jersey commercial electricity suppliers will have a minimum usage requirement for a business to be eligible for block pricing.
Your business will also need to know what choices there are regarding the length of a contract offered by New Jersey competitive electricity suppliers. Standard contract lengths come in 12, 24, or 36 months. However New Jersey commercial electric rates can come in a length as short as 3 months or as long as 5 years. As New Jersey electricity deregulation begins to mature more businesses are locking in longer term contracts. The price security that comes with locking in a longer term rate outweighs the price risk associated with short term contracts. A business locking in a longer term rate will benefit from the comfort of not having to spend time and resources on energy decisions each year so more attention can be spent on areas that matter most.