BE Residential Update: April 2023
As has been extensively reported by both print and television media, default Standard Service Offer (SSO) power rates in Ohio are set to skyrocket come June 2023. It is important for customers that are currently (and prudently) defaulting to the SSO to resume competitively sourcing power by their May 2023 meter reads.
Brakey Energy has been working extensively with its commercial and industrial customers to begin the resumption of competitive power supply. As a courtesy for all of our business contacts, we would like to highlight a residential rate offer that we find to be the most compelling. We do not stand to financially benefit from this advice.
Direct Energy (DE) is currently offering a competitive 6.19¢/kWh 19-month offer. Compare this to the SSO, which will likely be near 10¢/kWh come June 2023 for FirstEnergy and AEP-Ohio service territories. This offer may vary based on electric distribution utility.
Figure 1: DE 19-month offer
You can find many supplier offers on the Public Utilities Commission of Ohio’s Apples-to-Apples page that are at lower rates. However, nearly all of these offers either include monthly fees or are for significantly shorter terms. Power prices are relatively low in the short term and move significantly higher in the intermediate to longer term. In our opinion, this Direct Energy offer represents the most compelling value given the current state of the wholesale power market.
Best of all, because there are no monthly or early termination fees, if power prices were to significantly collapse, you could always enter into a new agreement. In the event prices stay stagnant or trend higher, you will be price protected for close to two years.
To the extent you entered into a fixed-price residential natural gas contract that does not include an early termination fee, including the residential offers Brakey Energy highlighted prior to this past winter, you should seek to exit and either enter into a new agreement or default to the Standard Choice Offer (SCO).
Brakey Energy has long and often found defaulting to distribution utilities’ SCO a prudent strategy for natural gas supply. We encourage our readers to employ this strategy if they are comfortable riding the highly volatile natural gas market – especially through the fall. To employ this strategy, you simply need to provide termination notice to your existing supplier and you will automatically be defaulted to the SCO.