Energy rates in Ohio have risen substantially in 2023, and there are several factors contributing to this trend. These factors include volatility in the cost of natural gas, the rising demand for electricity, and shifts in overall consumer behavior. In this article we will explore the reasons why energy rates in Ohio have risen, what to expect with future rate changes, and most importantly what Ohioans can do to save money on their energy bills.
Understanding the Price to Compare for Ohio Utilities
To encourage energy choice in Ohio, the Public Utilities Commission of Ohio (PUCO) mandates the inclusion of a “Price to Compare” disclosure on all residential electric utility bills. This is to provide residential electricity consumers with a reliable reference point each month to see whether an offer from an alternative supplier would be a good option. While this might seem straightforward, you might have wondered about the actual calculation of your Price to Compare, the major factors that can cause it to change, and how often it may change. A better understanding of the Price to Compare will help you make accurate comparisons between various electricity rates, like comparing apples to apples.
How is Ohio’s Price to Compare created?
In Ohio, electric utilities conduct competitive wholesale auctions, overseen by an independent consultant, to meet the energy needs of customers who haven’t chosen an alternative electricity supplier. The winning bids from these auctions set the energy supply rates under the “standard service offer” (SSO), which is the rate customers pay if they don’t select an alternative supplier. The PUCO approves the auction results for each utility.
These SSO wholesale auctions are designed to secure future generation rates. The SSO rate is a blended rate that combines all winning bids from the auctions for a specific period. Utilities strive to acquire all required electricity generation through these auctions and take the average auction price result to determine the Price to Compare. In cases of unexpected higher demand, like severe weather events, the utility may need to secure additional supply. For this reason, along with other factors, the utility rate can fluctuate monthly. The PUCO emphasizes the importance of reviewing several recent bills to gain a better understanding of your average Price to Compare.
Recent Standard Service Offer Auction Results
Electric utilities in Ohio purchased energy for customers on utility supply service through several auctions in 2022, and the purchase price from these auctions was used to determine the Price to Compare from June 2023 through May 2024. While the Price to Compare may vary from summer to winter due to other factors, the rates are still based on the results of the auctions that occurred last year. Customers can expect to continue paying higher rates for utility service until June of 2024, compared with utility rates from the prior period (June 2022 through May 2023). After June 2024, the utility rate is uncertain, and may be higher or lower based on future auction results.
To mitigate higher electricity costs, Ohioans have several options, such as considering a switch to an alternative energy supplier, implementing home weatherization measures, and using energy-efficient appliances.
How Ohio Homeowners Can Protect Themselves from Rate Hikes
Securing a competitive fixed rate for electricity is a great way for Ohio residents to avoid rate increases. Customers can compare Ohio electric suppliers and select the right plan to meet their unique needs. Some suppliers even offer long-term fixed rates with no cancellation fee, so you can avoid the Price to Compare when it’s higher, and switch back with no fee when it’s lower.
Here’s how you can compare offers and make the best choice for you and your family.
1. Compare Ohio electric suppliers’ rates
Energy Choice gives customers the power to choose their electricity supplier, which may lead to significant savings during times of extreme price fluctuations.
The PUCO facilitates easy rate comparison among Ohio electricity suppliers through their Apples to Apples website.
2. Determine what rate is right for you | Fixed or Variable
Most electricity plans come in one of two varieties – fixed-rate and variable-rate. With a fixed-rate, you pay the same rate each billing cycle through the plan contract, regardless of fluctuations in the energy market. With a variable-rate plan, the price you pay for electricity could shift significantly from month to month, depending on changing market prices.
Learn more about the pros and cons of fixed-rate and variable-rate plans by reading The Truth About Variable-Rate and Fixed-Rate Plans
3. Choose a short-term or long-term plan
Short-term plans typically last 3 to 12 months. Long-term plans can extend up to 48 months. Short-term plans can be good if you regularly shop new rates, but long-term plans can lock in a great rate for a big stretch of time. Some suppliers, like Energy Harbor, offer long-term fixed rates up to 48 months with no fee if you cancel early.
4. Make the switch
Making the switch to the new supplier is simple. In fact, your new supplier will manage the entire process with your utility company. Your utility company will still send you your monthly bill, and the way you pay your monthly bill won’t change.
No matter who your electric supplier is, local utility companies remain responsible for the service and maintenance of the electricity transmission and distribution infrastructure. All outages and downed power lines should be reported to your local utility immediately.
If you plan on moving soon, find out which service areas are covered by your supplier. If they offer plans in your new area, they may be able to help transfer service.
Still have questions about how to switch? Check out How to Choose an Electricity or Natural Gas Plan to learn more.
More about Energy Harbor
Based in Akron, Ohio, Energy Harbor is a major employer and contributor to local economies across Ohio. Energy Harbor produces enough electricity to power nearly 4 million homes every year, and provides fixed energy rates to customers across Ohio and other states. Visit https://energyharbor.com/ to find the plan that’s right for you.