Energy Service Company

An Energy Service Company (aka ESCO) is a company other than the local utility company (RG&E in the case of Rochester) which produces and sells energy to consumers. RG&E continues to provide the infrastructure for power distribution according to terms set by the New York State Public Service Commission.

Starting in 2007, Rochester consumers were given the opportunity to choose independent ESCOs rather than RG&E. To help clarify the changeover, the Chairwomen of the NYS Public Service Commission, Patricia L. Acampora, issued the following statement:

In the past, New Yorkers had no choice of who provided them with natural gas and electricity supply - it was the local utility. Well, things have changed. In recent years, New York State has been working to promote a more competitive energy industry where homeowners and businesses can shop for their energy providers much as they do for any other product purchase. Companies other than the local utility, called Energy Service Companies (ESCOs), can compete to provide you with your energy supply.

Competition between Energy Service Companies, or ESCOs, gives customers greater choice and better value for your energy dollar in purchasing energy products and services. There are a number of pricing options available including fixed pricing to provide you with protection from price volatility; variable pricing, which is tied to the market price for energy and may fluctuate depending on supply and demand; indexed or capped pricing mechanisms, tailored to your individual needs. Other value-added benefits are available, including energy products produced using clean, renewable energy sources, appliance repair and service contracts, and other options.

Your energy bill consists of two parts - supply and delivery. Energy supply constitutes roughly 50% of an electric bill and 60% of a gas bill.

You can purchase supply from either an ESCO or from a utility. No matter what you choose to do, your electricity and gas will continue to be delivered through utility-owned wires and pipes. The Public Service Commission will continue to oversee the safety and reliability of the delivery system. The safety and reliability you've come to depend on won't change. For any electric or gas emergency, you will continue to call your utility even if an ESCO supplies your electricity or gas. Your consumer protections are guaranteed whether you purchase electricity and/or natural gas from an Energy Service Company (ESCO) or your utility.

You can choose to pay either a fixed rate per kilowatt-hour over the year or a variable market rate.

The fixed-rate option means that if your energy consumption doesn't change, your bill won't either. If market rates go above your fixed rate, you will not be impacted and you will effectively save money. But if the market rates go down, you will still pay the higher fixed rate.

The variable-rate option means that your energy price will fluctuate with the market. If market rates stay below the fixed rate, you will effectively save money. But if they go above the fixed rate you will pay more, even if your energy consumption doesn't change.

You may only make this choice during the open enrollment period (or when starting new service). You are then generally locked in until the next open enrollment period.

For most consumers of gas and electricity, this is where things get confusing.

Regardless of your ESCO, you will see the following line items:

• Delivery Charge
  

• Transition Charge
  

• Retail access surcharge
  

• SBC/RPS charge
  

• Taxes on delivery charges
  

• Taxes on supply charges

RG&E also has a "Customer charge" and a "Bill issuance charge", both flat fees. Depending on your choice of energy provider, some of these charges may be negative and reduce your bill. ESCO's may also offer promotional rates on these charges.

You can change your ESCO, depending on your selected ESCO's "minimum period" contract - to find it go to NY Power to Choose and enter your zip code

• RG&E Choose a Supplier with website links and phone numbers
  

• NAESCO: National Association of Energy Service Companies