With retail electric supply, customers have many choices when it comes to suppliers, products and services. You also have a choice regarding the type of billing you receive when electing a retail energy contract.
Public Utility Commissions (PUC), your local distribution company (LDC), and retail energy suppliers work closely with one another to ensure customer data can be exchanged electronically in order to bill you for the electricity your business consumes. Rules are set in place by the PUC and the LDC that must be followed by retail energy suppliers when billing customers.
The most common billing types offered by retail energy suppliers, like AEP Energy, are Single Bill Option (SBO) and Utility Consolidated Billing (UCB). A third option is Dual Billing for customers who want to separate supplier charges from utility distribution charges. We’ll describe each of these billing types below.
What are the basic billing types?
1. Single Bill Option (SBO)
With Single Bill Option (SBO), you will receive one bill from your supplier, such as AEP Energy. The local utility will read your meter on your meter read date. Your meter data is sent electronically to your supplier along with the utility’s charges, which consists of transmission and distribution or “wires” charges. The supplier then consolidates all utility and supplier charges onto one bill for you and payment is remitted directly to your supplier. Your supplier then forwards the utility’s portion of the payment to your local utility to satisfy your charges for the billing period.
Within AEP Energy’s footprint, Illinois utilities Commonwealth Edison and Ameren currently support SBO. Other states are either piloting or have recently approved for future implementation. Below is a sample of AEP Energy’s SBO.
2. Utility Consolidated Billing (UCB)
UCB is essentially the reverse of SBO. The utility reads your meter on your meter read date, then sends your usage data electronically to your supplier. Your supplier calculates your electricity supply charges and sends those charges back to the utility to be presented on the utility’s bill. You will remit payment to your local utility and, in turn, they will pay the supplier for your portion of the payment for your electricity supply charges. All utilities in our footprint support UCB. Below is a sample of a UCB with the utility AEP Ohio containing supplier charges from AEP Energy.
3. Dual Billing
Dual Billing is offered by AEP Energy to customers who request separate bills between supplier charges and transmission and distribution charges from your local utility. With Dual Billing, you will remit payment to both AEP Energy and to your local utility for applicable charges. AEP Energy offers Dual Billing throughout our service territory. Below is a sample of AEP Energy’s Dual Billing.
What are the key differences?
So now that you understand the basics, let’s look at some of the key differences. UCB might be the more familiar option to some given that, prior to customer choice in the marketplace, customers were accustomed to the utility bill, which looks essentially the same as UCB. Customers rely on the utility bill and utility customer portals, but both may lack some of the detailed information customers want when it comes to supplier charges. Suppliers are often constrained with how much detail they can send to the utility and present on the bill.
If you receive UCB and require itemized detail of your supplier charges according to the product you elected, we offer a billing report via our online customer portal. With this report, you’ll see what your total supplier charges are and what’s expected to be on your utility bill. Our online customer portal provides you access to your SBO, Dual Billing or billing report within minutes of being posted. Below is a sample of our billing report for those who receive UCB.
If you haven’t checked out our online portal designed with our customers in mind, we invite you to do so. Go to AEPenergy.com/my account.
When it comes to billing options, payment terms are certainly another consideration. UCB customers have payment terms dictated by utility tariffs. AEP Energy can offer more flexible payment terms with our SBO and Dual customers because the charges are presented on our bill.
Lastly, suppliers like AEP Energy are continuing to offer more programs and services such as demand management. With many of our value-added programs and services, you earn bill credits. We are typically prohibited from placing non-commodity (electric and natural gas) charges or credits on your UCB. Therefore, SBO can be a better option for a one-stop shop bill that covers all energy related products and services. Dual Billing is another option here but again you will be separating your supplier and utility charges and receive a bill from each provider.
Below is a table summarizing the differences between the three billing options we’ve outlined.
What does the future hold for billing options?
Maryland approved SBO in May 2019 but indicated that it would not move immediately to implement this option. Ohio is currently piloting this option with a limited set of customers and suppliers. Pennsylvania has reviewed SBO option, but as of June 2019 has not moved forward with a program.
What is right for you?
The type of billing is dependent on your wants and needs. First off, you must be in a market that offers SBO before you can consider your options. Your AEP Energy advisor has the experience to understand your goals and will certainly assist you with your decision. Our team can structure the products and services and subsequently the billing method that best meets your needs. Contact your AEP Energy advisor today or click here to request a quote.
AEP Energy does not guarantee the accuracy, timeliness, suitability, completeness, freedom from error, or value of any information herein. The information presented is provided “as is”, “as available”, and for informational purposes only, speaks only to events or circumstances on or before the date it is presented, and should not be construed as advice, a recommendation, or a guarantee of future results. AEP Energy disclaims any and all liabilities and warranties related hereto, including any obligation to update or correct the information herein. Summaries and website links included herein (collectively, “Links”) are not under AEP Energy’s control and are provided for reference only and not for commercial purposes. AEP Energy does not endorse or approve of the Links or related information and does not provide any warranty of any kind or nature related thereto. Forward-looking statements contained herein are based on forecasted or outlook information (including assumptions and estimations) but any such statements may be influenced by innumerable factors that could cause actual outcomes and results to be materially different from those anticipated. As such, these statements are subject to risks, uncertainties, fluctuating market conditions, and other factors that may cause actual results to differ materially from expectations and should not be relied upon. Whether or how the customer utilizes any such information is entirely its responsibility (for which it assumes the entire risk).
Improved energy efficiency is the ‘holy grail’ of effective energy sustainability. Efficiency serves two very important goals: Reduced carbon footprint through reduced consumption Long-term cost structure reduction Organizations such as American Council for an Energy Efficient Economy (ACEEE) estimate an untapped energy savings potential of as much as 30% of usage. Although very few organizations …
Previous issues of Customer Insights provided a transmission service overview, explaining how transmission is regionally administered and affects customer bills, as well as tips on transmission service cost management. In this issue of Customer Insights, we will dive a little deeper into what factors drive transmission cost. How transmission costs are billed Most energy buyers …