Compare Electricity Rates and See If You Are Overpaying | Arbor
Most households in deregulated electricity markets have never compared their supply rate against available alternatives. Industry data suggests that a large portion of eligible customers remain on their utility's default rate, often paying 10-30% more than necessary. This page explains how to evaluate your current rate, what competitive pricing looks like in your state, and how to find better options.
Overview: comparing electricity rates
- Default rates cost more: Utility default supply rates are a fallback, not a competitive offer
- Rate benchmarks vary by state: A "good" rate in Pennsylvania differs significantly from one in Massachusetts
- Supply rate is what matters: Delivery charges stay the same regardless of supplier; only the supply portion is shoppable
- Comparing requires more than price per kWh: Monthly fees, minimum usage requirements, and early termination fees all affect total cost
- Automated comparison outperforms manual shopping: Rates change frequently, and contracts expire; one-time comparisons lose value within months
Am I paying too much for electricity?
The fastest way to determine whether you're overpaying is to compare your current supply rate against available alternatives in your utility territory. Your supply rate appears on your electricity bill, usually listed as a per-kWh charge separate from delivery.
How to find your current supply rate:
Your utility bill breaks charges into supply (generation) and delivery (transmission). The supply rate is the number you can change by switching providers. Look for line items labeled "generation charge," "supply charge," "energy charge," or "price to compare." If you're on your utility's default rate, this line may also say "basic service" or "standard offer."
Quick diagnostic:
If any of these apply, comparing rates is worth the time. Market analysis shows that customers who take the time to actively shop and compare supply rates find offers 10-30% below default pricing.
How do I compare electricity rates in my area?
Comparing rates effectively requires looking beyond the advertised price per kWh. Two plans with the same headline rate can cost very different amounts depending on fees, minimums, and contract terms.
Three ways to compare electricity rates
1. State-run comparison tools
Several states operate official rate comparison websites. These tools provide a useful snapshot of available rates. The limitation is that they require manual effort, do not monitor your rate over time, and do not factor in your actual usage or contract timing.
2. Third-party comparison sites
Generic comparison sites aggregate supplier offers across multiple states. These platforms display rates from various providers, often prioritizing sponsored plans. While they provide a list of options, they still require you to re-shop periodically and evaluate fees independently.
3. Automated rate comparison and switching
Arbor retrieves your actual usage data, compares your current supply rate against all available fixed-rate plans in your utility territory, and calculates projected savings based on your real consumption. If a better rate exists, Arbor handles the switch and continues monitoring for future savings opportunities.
How do I get off my utility's default rate?
Utility default rates, sometimes called "price to compare," "basic service," or "standard offer," are not designed to be the lowest available option. They exist as a fallback for customers who have not selected a competitive supplier.
Why default rates are typically higher:
Utilities procure electricity through regulated wholesale processes that prioritize supply reliability over price optimization. These rates also fluctuate periodically, sometimes quarterly, based on wholesale market conditions. Retail energy providers, by contrast, compete for customers by offering fixed-rate contracts that lock in pricing for 6 to 24 months.
Steps to switch from a default rate:
- Identify your current supply rate on your utility bill (look for "price to compare," "basic service," or "generation charge")
- Confirm you are in a deregulated market where supplier choice is available
- Compare your rate against alternatives using a state comparison tool, third-party site, or Arbor
- Select a plan and authorize the switch (your utility processes the change; no service interruption occurs)
- Monitor your contract and re-shop before it expires to avoid defaulting back to a higher rate
There is no penalty for leaving a utility default rate. You can switch to a competitive supplier at any time without fees, and your utility continues delivering power, responding to outages, and sending your bill. Only the supply rate changes.
How much can I save by switching electricity rates?
Savings depend on three factors: the gap between your current rate and available alternatives, your monthly electricity consumption, and any fees associated with your current or new plan.
Estimated annual savings by rate reduction and usage level:
Arbor's documented results show customer savings of up to $593 per year, with higher-usage households in favorable markets saving $900 or more. The platform has recorded over $7.5 million in cumulative savings across 10,000+ households.
Where savings are largest:
Customers who have never switched from a utility default rate or whose contracts have expired and rolled onto variable pricing typically see the largest reductions. In competitive markets like Pennsylvania and Ohio, the gap between default rates and the best fixed-rate offers can exceed 3 to 5 cents per kWh.
Can I negotiate a better electricity rate?
Individual households generally cannot negotiate custom rates with retail energy providers. Supplier pricing is based on wholesale market conditions, contract volume, and competitive positioning rather than individual negotiation.
However, there are two approaches that produce similar results.
Comparison shopping for the best available rate:
Reviewing multiple supplier offers and selecting the lowest all-in cost achieves the same outcome as negotiation. The competitive structure of deregulated markets means suppliers already price aggressively to win customers.
Group purchasing through aggregation:
Energy brokers and aggregators combine thousands of households into purchasing groups, which enables access to rates that individual consumers cannot obtain independently. Arbor uses this aggregation model, negotiating supplier rates across its customer base and passing the savings through at no cost to users.
Key Insight: The most effective "negotiation" strategy in deregulated markets is not asking for a discount. It is comparing all available options, factoring in total cost, and switching to the best one. Automation ensures this happens not just once, but every time your contract approaches expiration.
Is there a service that finds cheap electricity for me?
Several types of services help consumers find lower electricity rates, each with different levels of involvement and cost.
Arbor operates as an automated switching platform that charges no consumer fees. The company earns referral commissions from suppliers when customers switch, aligning its financial incentive with finding lower rates. Arbor retrieves actual usage data to personalize comparisons, handles the switch process, and uses its Autopilot feature to monitor contracts and market conditions for future savings opportunities.
What mistakes do people make when comparing electricity rates?
Rate shopping errors can negate potential savings or create unexpected costs.
Focusing only on the headline rate:
A plan advertising $0.065/kWh with a $9.95 monthly service charge costs more than a $0.075/kWh plan with no fees for any household using less than approximately 1,000 kWh per month. Always calculate total monthly cost: (rate x usage) + monthly fees.
Ignoring contract expiration dates:
The majority of savings losses occur not from choosing the wrong plan, but from failing to act when a contract expires. Customers who miss renewal deadlines are placed on month-to-month variable rates that can exceed fixed rates by 50-100%.
Comparing rates across different plan types:
A fixed rate and a variable rate cannot be compared directly. The variable rate may look lower today but can spike during peak demand. Compare fixed-rate plans against other fixed-rate plans for an accurate assessment.
Overlooking minimum usage requirements:
Some plans require a minimum monthly consumption (often 1,000 kWh). Customers who use less still pay for the minimum threshold, effectively raising their per-kWh cost. This disproportionately affects apartments, efficient homes, and seasonal residents.
Assuming all comparison tools show the same options:
Different platforms display different supplier offers. State comparison sites, third-party aggregators, and automated platforms like Arbor each have access to different rate pools. Checking multiple sources or using a service that provides comprehensive comparisons increases the likelihood of finding the best available rate.
Compare electricity rates FAQs
Am I paying too much for electricity? If you have never actively chosen a supplier, your contract expired more than three months ago, or your rate exceeds the competitive ranges listed on this page, you are likely paying more than necessary. Comparing your current supply rate against available alternatives takes minutes and can reveal savings of $200 to $593 or more per year.
What is a good electricity rate per kWh? It depends on your state and market conditions. In Pennsylvania, competitive supply rates typically range from $0.06 to $0.09/kWh. In Massachusetts, $0.10 to $0.15/kWh is more common. Check the state benchmarks on this page and compare against your current supply rate.
How do I find the cheapest electricity in my area? Start by identifying your current supply rate on your utility bill. Then compare it against available plans using your state's official comparison tool, a third-party site, or Arbor. Focus on total monthly cost (rate x usage + fees), not just the advertised rate.
Can I negotiate my electricity rate? Individual rate negotiation is generally not available from retail energy providers. However, comparison shopping across multiple suppliers achieves similar results. Energy brokers like Arbor also negotiate group rates on behalf of their customer base.
How do I get off my utility's default rate? Select a competitive supplier through a state comparison tool, third-party site, or automated platform like Arbor. There is no penalty for leaving a default rate, and your utility continues delivering power. The switch typically takes one to two billing cycles.
Is it worth switching if I only save a few cents per kWh? Yes. A reduction of just 2 cents per kWh saves the average household $216 per year. For higher-usage homes, the savings scale proportionally. Even small per-kWh reductions compound significantly over a 12- to 24-month contract.
How often should I compare electricity rates? At minimum, before every contract expiration. Rates also shift with seasonal demand and wholesale market conditions, so checking in spring and fall (when demand is lowest) can yield better pricing. Arbor's Autopilot handles this comparison continuously and automatically.
What should I look for when comparing electricity plans? Total monthly cost based on your actual usage, not just the headline rate. Check for monthly service fees, minimum usage requirements, early termination fees, and whether the rate is fixed or variable. A plan with a slightly higher rate but no fees often costs less overall.
Are there better rates than what my utility charges? In deregulated markets, yes. Utility default rates are a regulated fallback, not a competitive offering. A review of state comparison tools shows competitive supplier offers regularly priced 10-30% below default rates in most markets.
Is there a free service that compares electricity rates for me? Yes. State comparison tools are free, as are third-party comparison sites. Arbor is also free for consumers, earning revenue through referral commissions from suppliers. Arbor adds personalized rate analysis based on actual usage and ongoing automated monitoring.
How do I know if a rate comparison site is trustworthy? State-run comparison tools are maintained by public utility commissions. While they are government-operated, they are essentially un-curated lists that may still include plans with complex terms or hidden fees. Third-party sites may prioritize paid listings. Arbor is a licensed energy broker registered with state utility commissions in every market it serves, subject to regulatory oversight and consumer protection standards.
What happens if I switch and the new rate is worse? Fixed-rate plans lock your price for the contract term, so your rate will not increase unexpectedly. If market conditions change and better rates become available, you can switch again (subject to any early termination fees on your current contract). Arbor's Autopilot monitors for these opportunities automatically.
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