As of June 1, 2023, default electricity prices for many Ohioans have increased (or even doubled!). The good news: You have a choice in who supplies your home energy and can switch to a cheaper rate -- without changing utility companies.

“Why is my electricity bill so much higher this month?”

Home energy can be confusing. There’s your utility company -- which is top of mind when you pay your monthly bill -- and your electricity supplier, which may not be a familiar brand name.

It's the supplier’s rates that determine the amount of your bill, and changes in Ohio will drive up how much you’ll need to pay. Worse yet, these changes coincide with summer, when electricity usage reaches its annual peak, mostly due to air conditioning.

Needless to say, this is not a good combination for your wallet.

Let’s look at why this is happening -- and what you can do to compare energy prices and find a new supplier of electricity for your home.

Already in the know? Enter your zip code here to find lower energy rates today.

What is Causing the 2023 Increase in Electricity Rates in Ohio?

The Standard Service Offer (SSO) of many utility companies across the state has changed as of June 1, with most increased or even doubled.

The SSO is the default amount of money you will pay per if you have not chosen your own supplier or have not joined an aggregation group, such as a group-buying association or other cost-savings organization. The SSO is expressed in an amount of money per kilowatt hour, an individual unit of energy use.

A utility’s SSO is not market-driven, meaning it’s not established the same way suppliers buy and sell energy through traditional trading on the commodities exchanges. Historically, the SSO prices and market prices were rarely divergent since Ohio deregulated energy in 2001.

Until now.

The disparity between the June 1, 2023 utility SSO and the prior SSO is more than 100% (see the table below).

SSO = utility standard service offer

Public officials are now advising consumers to walk away from the SSO through May 2024 and by selecting a new supplier or joining a local community aggregation group if it is available. 

You can change energy suppliers without changing utility companies. Get started today!

Is the price increase just for 1 year? Why change suppliers, then?
 

You’ll want to change suppliers because this could be a rather expensive year (June 1, 2023, to May 31, 2024).

This scenario is also very likely to be playing out in other states in which energy has become deregulated. It is not short term nor is there an easy way to fix the problem overnight. 

There are serious issues with the way the system works (SSO vs real market pricing) and it will take time to realize the full implications of the market disparity. 

In recent years when we all benefited from low energy prices, a market change in prices didn’t impact the consumer enough to engage them in exercising their market choice of supplier. A few dollars more or a few dollars less wasn’t enough to move the needle of concern. 

In the past, an increase in the price of electricity of 1 cent would cost an additional $120 per year or only $12 per month on average, hardly enough to draw attention to the increase but probably small enough to be dismissed as a weather effect on the electric bill. A penny increase in the cost of electricity simply hasn’t happened in quite a few years. 

But from June 1, 2023, in the Illuminating Company (FirstEnergy) service area, the utility residential price will increase by 6.5 cents per kilowatt hour and will be in effect for one year, that is until May 31, 2024! We are no longer discussing the possibility of a $12 per month increase, it is closer to $65 per month. 

Add the use of your air conditioning unit or central air into the mix, and the price increase is even more painful.

In an actual case study of an Avon residence, the summer months of June, July, August, and September, represented 46% of the electric usage for an entire year. 

Let’s take a look at the impact of staying on the utility rate for this “typical” customer using just short of the average household consumption for a year of 12,000 annual kilowatt hours. 

The four summer air conditioning months represent a total usage of 46% of the annual total use for this residential homeowner. 

Therefore, the additional expenditure for this residential homeowner, located in The Illuminating Company service area, in the four air conditioning months and staying on the utility SSO will be approximately $332.

No small change, and not like what we’ve experienced in the past.

The utility recommended that I pick a supplier and I didn’t. Can’t they do anything to lower my bill?

Here’s why your utility company encouraged you to change suppliers: It’s about to bear the backlash of complaints about high bills. 

The company’s canned response to those complaints? “Don’t say we didn’t warn you!” 

Remember, it’s the cost-per-kilowatt-hour of your electricity supplier’s SSO that determines your bill. The utility company only facilitates the delivery of energy to your home. 

You’ve had a choice in who supplies your energy for a while. It’s time to make that choice.

How do I shop for a lower electricity rate in Ohio?

Easily! Simply, visit our Get Started page and follow these steps:

1. Enter your zip code to view suppliers and offers in your area.
2. Answer a few questions to help us compare rates for you.
3. We will show you different energy rates for your utility company.
4. Select the rate and energy plan that works for you.
5. Enjoy your newfound savings!

Based in Cleveland, OH, Energy Deals LLC, is the creator of an energy consumer marketplace, energypricechoice.com, where suppliers compete for customers’ supply of electricity and/or natural gas. When suppliers compete, the consumer benefits from lower prices. Energy Deals is a Brite Energy Innovators (Warren, OH) portfolio company.