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The Real Deal: Are ESCOs Cheaper?

Updated: Thursday, April 10 2014, 01:52 PM EDT

ALBANY - As the temperature drops, most of us will be looking for ways to save on our energy bill.  Energy Service Companies (ESCOS) throw all kinds of offers out there in an effort to get us to switch from National Grid or NYSEG but the Public Service Commission says it can be very difficult to know whether you're actually saving if and when you switch.

Chances are you've come across an ESCO on more than one occasion. "I've gotten a few letters in the mail just asking me to switch, I never really have ever considered it," says Cori Cox of Albany.  Often, the companies claim they can save you big bucks when it comes to heating your home but Cox isn't convinced, "if I knew more people that actually switched over, I may consider it if it did save money in the long run but I'm kinda wary if it actually would save money," she says. 

There are now 85 ESCOS that sell electricity in New York and 100 that sell natural gas.  Many of the ESCO's come door-to-door offering not only discounts but airline miles and other free stuff to those who will switch and so far, about 20% of
New Yorkers have but a recent study by the Public Service Commission shows it's hard for those customers to determine whether they're actually seeing any savings after the promotional period is over. 

"We have seen some instances where some customers are paying less than what the utility offers, some customers are paying a little bit more than what the utility offers and some customers are paying much more and that's what the problem is," says James Denn of the New York State Public Service Commission. 

Some folks choose to pay more to get their energy from an ESCO that uses renewable sources and that's fine but if customers are expecting a discount that they've been promised and aren't receiving, that's a different matter. 

If you have your old National Grid bills and can compare them to your new ESCO bills, that's a good start but it doesn't give you a totally true picture.  "You should be able to compare but often times people are busy, they don't have time or they haven't kept the historical bills to enable them to make these determinations," says Denn. 

That's why the PSC is now looking for public comment on how to make ESCO pricing more transparent. The PSC has just started working with two ESCOS, Central Hudson and National Fuel Gas, to design and implement a pilot program where customers use an on-line tool to compare the amount they paid for ESCO service and the amount they would have paid if the energy had been purchased from the utility.   In addition, all ESCOS are required to provide pricing information to the PSC every 30 days.  The PSC then makes that information available to consumers at the following website:


The Real Deal: Are ESCOs Cheaper?

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