Resources & FAQs
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Electric Service Quality
Why do energy suppliers exist?
Energy suppliers exist to manage energy price volatility and to provide innovative products that match the needs of their customers. In order for power to get to your home or business, there are companies that focus on generating power (e.g., nuclear, gas, solar, etc.); then there are “Suppliers”. Suppliers buy energy from companies in generation and structure and sell that energy to utilities or directly to homes and businesses. Suppliers may go by different names including, but not limited to: wholesalers, Retail Energy Providers / REPs, or Alternative Retail Energy Suppliers / ARES.
Why do energy prices fluctuate?
There are a number of factors impacting the price you pay for energy. Depending on the state, the portion of the grid you are connected to, and your local utility, certain price variables may have a stronger or weaker impact on your total price of energy. The variable “energy” is often the largest and most volatile price component in your total price of energy and reflects the market’s expectations of energy supply (of either a fuel source or the power plants themselves) and energy demand. As investor perception of supply and demand fluctuates, along with fluctuations in the values of the underlying assets, the price for energy also fluctuates.
Why doesn't everyone do this?
We have a few theories as to why some folks choose not to engage in competitive energy markets. We expect there are folks on the sidelines because they are unaware that this is an option or they are unaware of the benefits of this option. Some, who have heard of competitive energy markets, have also received misinformation which makes these markets seem unappealing. Still, others may have had a broker or supplier sell them an inappropriate energy contract with hidden or variable fees. Breakerbox is built on trust and transparency; explain how energy markets can work to the benefit of the customer’s energy goals.
Why does Breakerbox need to know my usage data?
The price you pay for energy is determined in part by how and when you use energy. Most of the energy on the grid is provided by power plants that produce consistent amounts of energy while operating. Because energy must be consumed as it is produced, energy suppliers prefer to sell to users with likewise consistent usage. all else being equal, using more energy at one point in time will likely cost more than using the same amount of energy consistently over a longer period. When you provide Breakerbox with your energy usage data, we, in turn, provide that data to energy suppliers who use that data to make judgments about your value as a customer. Additionally, Breakerbox hopes to continue to expand its range of free services which require your usage data (such as budgeting, tariff analysis, and bill analysis).
What are 100% Fixed Contracts?
In 100% Fixed contracts, barring certain exceptions, the price cannot be adjusted during the term of the contract. These contracts can be more expensive than contracts where certain variables are “Passed Through” because the supplier needs to be compensated for taking on more risk in locking prices for the customer.
What are 100% Passed Through contracts?
In 100% Passed Through contracts, the supplier has not taken the financial burden of the volatility risk on any price components. This means that the price the customer pays will vary from moment to moment for the term of this contract. 100% Passed Through contracts are generally less expensive but riskier for the customer than contracts in which certain price elements are fixed.
What are Semi-Fixed contracts?
In Semi-Fixed contracts, the supplier has taken the volatility risk on some, but not all price components. This means that the price the customer pays for energy will likely vary over the term of this contract. Semi-Fixed contracts are a risk and reward middle ground between 100% fixed and 100% Passed Through contracts. By varying which elements are fixed or passed through, the customer can match their risk preference to the contract.
If I'm on a 100% fixed contract, how might the contract price change during the term?
Even though the supplier has fixed all of the price variables, the price of a 100% fixed contract may still change due to things including but not limited to the following: a change in law which materially changes the supplier’s costs to serve; a meaningful positive or negative change in the customer’s usage, outside of the allowance specified in the swing provision portion of the contract; the supplier going out of business (which would force a drop back to default prices); and force majeure. By working with Breakerbox, we’ll provide you with information that helps you understand how likely individual contracts are to experience price changes during their respective terms.
Why shouldn't I just pick the cheapest supplier?
There are several reasons why choosing a contract with the lowest price might not be a prudent strategy for managing risk and/or saving money. Breakerbox looks beyond the price and into other details that help you understand the total cost and risk associated with a complete contract. Contracts with low prices may include usage restrictions, may omit certain fixed price components, or may carry extra risk depending on the nature of the supplier – all of which could potentially lead to a higher total cost.
How else can I save money on energy?
Making smarter decisions about energy procurement is just one way to save on your energy costs. You can also save by using less energy, better managing capacity, and/or taking advantage of utility incentives. Breakerbox understands these opportunities in their respective market contexts and can work with you to create a custom plan that reflects your business’s unique opportunities and restrictions.
Can I reduce my carbon footprint by buying renewable energy?
Many businesses are establishing short- and long-term environmental goals or commitments. Purchasing from renewable energy sources is one way to contribute to those goals. The purchase of renewable energy certificates (RECs) demonstrates your commitment to environmental responsibility and supports your company’s goals. By adding RECs to your energy supply plan you are supporting the demand for new, clean, wind and/or solar power, able to match a designated percentage of your annual electricity use and able to make environmental claims about a reduction in greenhouse gas emissions associated with your annual electricity use, also known as “Scope 2” emissions.
Why is my contract start date an entire month?
Breakerbox defaults to displaying contract start dates as a month and year with a day specified. This is because the actual start date of your new electric contract will vary based on your meter read data and existing billing cycle.
Electric Service Quality
Can I lose power if I choose a competitive energy supplier?
What if my energy supplier doesn't provide enough energy for my business?
Will I get to keep the same utility?
Ancillaries cover activities related to grid operations such as switching energy plants or maintaining voltage levels in transmission lines. Ancillaries may have additional sub-components depending on the Independent System Operator (“ISO”).
Change in Law
Credit Card Payments
Due to the principles of physics, some electricity is lost on its way from the generator to your meter. Accordingly, to make sure you have enough energy, the generator needs to generate a little bit more than what you’re going to use. If losses are passed through (instead of fixed) you would see either an additional line item on your bill or the bill would be multiplied by (1 + the loss percentage) to account for that lost volume. Line Losses can refer to both Transmission and Distribution Losses and will vary by Utility and Rate Class.
Supplier Credit Rating
The credit rating of the supplier is a key risk factor to consider when signing a contract. The higher the credit rating, the less likely the supplier is to go out of business. If a supplier were to go out of business while you were under contract with them, you would be immediately put back onto “default” or “provider of last resort” rates, depending on their state and utility. And these rates may be higher than the other rates you could have received. AAA is the best, and C/D is the worst.
Get a Free Consultation
If you are looking for help deciding on an energy contract feel free to send us a message and we will get back to you as soon as possible. When you engage one of our advisors we learn about your current costs and usage and talk you through your options. Book a time slot with one of our energy advisors and be prepared with your recent energy bill or any info about your current contract.
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