Lower Your Electricity Rates Even Further - Power Buyer Groups (PBG)
There are three levels of pricing within fixed price electricity agreements: low, medium and high. The rates within each level are different. For example, the electricity rates for the "medium" profile category are lower than the rates for the "lower" category rates. Your business electricity usage profile (measured over a 12-month period) determines what category of electricity rates will apply to you. In summary, the energy rate in your current electricity agreement was based on one of these three pricing categories.
Normally this as far as most energy consultants can go to get you the lowest possible electricity rate. But not this company. Occasionally, a very large prestigious energy company, outside of Texas, will decide that it wants to participate in the Texas deregulated electricity marketplace. Rather than taking years to build up a new customer base in Texas they decide to offer a very low rate for a very large pool of buyers. These pools are sometimes called Power Buyer Groups (PBG). Some of these groups can get as large as over 100 million kWh in power usage. Compare this pooled volume of annual electricity usage to a small, medium and large businesses with average annual kWh usage of 100,000, 300,000 and 900,000 respectively. Here's how some PBGs work:
1. The outside electric provider (Aggregator) offers below market electricity rates if a large enough group/pool/aggregation of businesses, churches, hospitals, independent school districts, etc. come together and agree to their specific terms regarding current/future possible rates and terms. Normally an independent energy company is brokering the selection and timing of the electricity contract for the collective buyers and performing all the negotiations as well.
2. Normally, the requirements to get into a BPG are often very rigid, e.g., a brief time period (weeks or days) to enter. Sometimes businesses with a "Low" profile usage profile may be excluded.
3. Most customers don't know that these type of situations and opportunities even exit. And that they offer the potential to get even lower electricity rates. Many energy companies know about these but they can't participate in them because their customer base isn't large enough.
Participating in an electricity PBG offers the potential of even lower electricity rates than normally would be the case. For example, let's say a business uses 250,000 kWh a year. Now what will their rate be if they participate in a PBG of customers whose combined usage is 25,000,000 kWh (100 times larger)? The answer is significantly lower. By being in a PBG this customer will get the same electricity rate as everyone in the pool, regardless of their size, usage profile or how much electricity they individually use each year. And the new rate will be based on a usage of 25 million kWh rather than 250 thousand kWh. Small businesses benefit the most from these buying groups.
Large PBG with target size of 300 million kWh. Target Strike Price = 5 .4 cents per kWh.
Contract signed with actual rate of 4.74. Savings by being a member of this PBG was an additional 0.66 cents per kWh. Customer with 1 million annual kWh saved an additional $6,600 per year of the contract. Small customer saved $660 per year.
When has your energy consultant last talked to you about participating in an PBG?
CAUTION: Not all PGBs are the same. Please call to learn how to compare.
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