Choosing an ESCO Energy Tips For the Post-Deregulation Era

Saving money is always a top concern of any co-op or condo board, so when energy deregulation first offered customers the opportunity to choose their energy provider in 1998, it seemed that lower energy bills were on the way. But in the time since deregulation first came into effect, many companies have not survived, and many customers have not realized the savings they'd hoped for. So what's the best way to choose a new energy service company (ESCO) and find a good deal, if you're still looking to switch?

Doing the Research

If you're just starting out in the process of researching ESCOs, Larry Kurtz, president of Accurate Energy Group in Bellmore, N.Y., suggests visiting the New York State Public Service Commission's (PSC) Web site at www.dps.state.ny.us or go to Con Edison's at www.poweryourway.com. There you can find a listing of current ESCOs that are eligible to sell energy in New York. It's a good idea to check prices with several companies you may be considering. Vincent DiCeglio, a utility rate analyst for Utility Check, Ltd. in Rockville Center, N.Y., suggests calling the various companies and asking for their price per kilowatt hour. This will give you a beginning basis for comparison. See if there are any current incentives the ESCO is offering to new customers, and if the prices quoted include taxes.

Stephen Galowitz, president of Utilisave, LLC, in New Rochelle, N.Y., says it's important to keep in mind that there aren't differences in the actual product you're buying, no matter who you buy it from. That is, you're not buying the molecules; the energy, whether it is gas or electric, is the same product. Only the actual companies differ, and that's how you will make the distinction between ESCOs. At the beginning of your ESCO search, consider three things:

"¢ Price

"¢ Service offered

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8 Comments

  • Thank you for the information. Your article has answered many questions I have about switching my energy company.
  • My fiance and I are moving to NYC and will be renting. As renters, do we have the option of choosing an ESCO?
  • Thank you for a most informative article. Although I am a single consumer -- not a building-- your information is applicable and most helpful. What I do not yet understand is why Con Ed assesses a fee for its customers who DO NOT shop for energy elsewhere. Can you enlighten me?Thank you.
  • I feel that we are being charged two rates when dealing with two power companies, and to have the right to charge for two months after you cancel is outrages, when you first move to an area there is no one to talk with about power or gas because you are in the middle of moving. these issue should be address.
  • The ESCO model has been around for a long time, and jungidg from the relatively profitable outcome for the companies involved, it certainly delivers savings somewhere. The problem with this model is that it inherently focuses only on the most significant potential gains, at the expense of all the other upgrades that should be undertaken simultaneously. For example, an ESCO might see that a quick lighting retrofit consisting of better lamps would have significant immediate returns, and implement this. But really, a longer term perspective would suggest that it would be better to upgrde the whole lighting fixture and control system to generate better savings over the longer term. This kind of retrofit is too expensive for the short term payback sought by the ESCO, so these potential savings will be left on the table every time. And once the potential savings stream from the lamp component is captured by the ESCO, the rest of the upgrade will never again be cost-effective.In the article above, the school district achieved energy savings of about 11%. This is the right direction, but the kinds of performance improvements being discused nationally and locally for codes and voluntary programs are in the neighborhood of 30-50% energy use reduction, increasing to net zero energy performance for buildings within about 20 years. Unless we focus on programs that deliver these kinds of deep energy savings now, we're just rearranging the deck chairs.
  • so where r u saving if ur paying 2 bills. Sounds like a scam to me. I know someone with such a problem. He didnt even sign a contract yet the esco charged the same amount con ed did.
  • I switched to an ESCO, Amplified Power and Gas and was promised a low rate for 3 months. After the first month they charged me double. A $191 bill was $495!!!! I switched back but for this month they are still my supplier and charging me outragous amounts of money. Dont switch its not worth the hassle and money.
  • This is about the 4th article I've read re: ESCO's and I believe this is why I did not go with and ESCO myself at home when it was offered. Let me know your thoughts.