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9 Things California Small Business Entrepreneurs Need To Know About Cutting Your Gas Bill In Half

9 Things California Small Business Entrepreneurs Need To Know About Cutting Your Gas Bill In Half

Los Angeles - Warren Buffet is calling the roll-out of the deregulation of energy the "largest transfer of wealth in history", and it is underway right this moment. The same way the Telecom industry was deregulated in the early 90's, the suppliers of your natural gas are no longer a one-man show.

1. What exactly does Energy Deregulation mean to me and my business?

Bottom line? Cost savings, and consumer choice.

Energy deregulation is designed to ensure consumers have access to adequate and competitively priced energy supplies. While your local utility (PG&E, SoCal Gas and SDG&E in the California market, for example) is still responsible for maintaining the pipes that make up the distribution system, reading your meter, issuing the bill and responding to emergencies, the utility no longer holds a monopoly on the gas service. While in most deregulated markets you can still purchase your supply from the utility, you now may choose from competitive suppliers that offer various service plans at competing rates.

Savings of 50% are not unusual. You also have a choice of plans. You can be billed at the market rate month to month (how your utility is currently billing you), or you can lock in a 1- or 2-year rate. You can even choose to get your energy from yourself. Right now, 8 states have deregulated either their electricity, natural gas, or both. 6 more states are set to joint them shortly, and over time the entire country will be deregulated.

2. Is My Energy Service Ever At Risk By Enrolling Outside My Existing Gas Company?

No. You are never at risk of not having service. There are 2 compelling reasons:

  • First, natural gas systems (such as PG&E) are fully pressurized pipeline systems capable of delivering natural gas at all times, regardless of the gas "supplier".
  • Second, suppliers are required to post collateral with each utility. In the unlikely event the new supplier were unable to service your account, the utility would procure and deliver energy to your business or home on your supplier's behalf.

3. Will I Be Switching Utilities?

No. Your local utility will remain the same, and will continue to deliver energy to your business or home just like they did when you bought the energy supply from them.

4. How Will My Utility Company Know I've Enrolled with Another Supplier?

Your utility company recognizes a reputable outside supplier as a licensed supplier. When your enrollment is approved, your new, licensed supplier will notify your utility company of the change through their systems, and they then become your supplier of record.

5. Will My Service Be Interrupted When I Switch Suppliers?

No. You are never at risk for service disruptions for switching. In fact, you will see no difference in the service you are receiving, The only change will be in your billing, where you will be billed (at a much lower rate!) according to the service plan you selected (choice!).

6. What Is The Difference Between Fixed and Variable Rate Plans?

A fixed rate plan provides you with stability and peace of mind. Utility rates are variable rates that can change periodically based on the actual cost of energy. A fixed rate product may be higher or lower than utility rates, but, unlike utility rates, a fixed rate product will not change during the life of your contract. You are protected against unexpected and costly price increases and have greater control of the cost of your energy.

A variable rate plan allows you to purchase energy at market-based prices that change from month to month. While a variable rate is subject to monthly price increases or decreases, it may help you realize the lowest possible cost in the market. However, it also exposes you to possible price increases, and, unlike a fixed rate, a variable rate does not protect you against price volatility. This may be higher or lower than the utility rate.

7. When Will My Service Become Effective With My New Supplier?

Your new service will typically commence on your meter read date immediately following your successful enrollment in an outside program, meaning it may take up to 30 days. In some cases, it may become effective the second meter read following your enrollment. In this case, it may take up to 60 days before your service commences.

8. How Will I Be Billed?

This will vary state-by-state and utility by utility. In California PG&E will continue to bill you as they always have. Your gas supplier charges will appear along with your utility service and delivery charges. You still make only one payment to your utility company. However if you are a SDG&E customer, you will begin to receive your natural gas service bill your new supplier. Your payment should be sent to your new supplier directly. You will continue to receive a bill from SDG&E for the delivery of your natural gas. They should be paid directly.

9. How Does An Outside Company Reduce My Energy Costs?

No one can guarantee service plan contracts will save you money (though as noted above, right now you can save approximately 50% if you are a PG&E customer!). Plus, each service plan contract offers a unique value proposition. Fixed rate service plan contracts are an excellent way to lock in rates and avoid rising prices. Your price is locked in, giving you peace of mind by not having to worry about rising prices. Variable rate service plan contracts are based on market conditions, and priced on a monthly basis. If you are not worried about rising prices and prefer to pay no more than what the market is charging, this is the service plan contract for you.

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