Price to compare is an applicable utility supply benchmark used to compare a competitive electricity proposal on the same stated cost basis and service period.
What does the benchmark help a hotel compare?
It helps compare the relevant utility generation-related price with a competitive supplier’s equivalent offer. The number is a purchasing reference, not a promise that changing suppliers reduces the complete bill. Determine the benchmark’s components before applying it to the property’s usage.
The Pennsylvania commission’s price-to-compare explanation identifies the benchmark with the generation portion and advises checking how long it is effective. Keep that jurisdictional definition distinct from another utility’s terminology. A commercial buyer should request the specific value and scope for its account.
The bills hub establishes the broader invoice map. Price to compare occupies one boundary in that map. Delivery, account charges, and other retained components must remain visible even when the buyer isolates supply for a competitive comparison.
Which units and effective dates should be recorded?
Record dollars or cents per kWh, the account schedule, effective start and end, and any stated conditions. One cent per kWh is $0.01/kWh. Confusing the unit conversion can make a spreadsheet wrong by a factor of one hundred before any contract analysis begins.
A benchmark may change over time. A value printed on an older bill is evidence for that bill’s applicable period, not necessarily a current forward-service comparison. The supplier proposal should identify its intended start and term, and the buyer should acknowledge when the benchmark covers a different window.
Do not infer the future benchmark from a single historical value. The hotel can compare available alternatives and clearly labeled scenarios, but an unknown future utility price should not become a fixed assumed fact. Record which parts of the comparison are observed and which remain uncertain.
How does it differ from a supply charge or delivery charge?
The benchmark is a reference price; the supply charge is an actual or modeled cost for the agreement’s defined supply components. A bill can show a supply amount that reflects usage multiplied by a rate plus other relevant items. Compare the benchmark with an equivalent price boundary.
The delivery charge concerns the utility’s delivery services and applicable tariff components. Those costs do not disappear merely because a different company provides supply. A total-bill dollars-per-kWh figure merges these categories and should not be ranked beside a supply-only quote without reconciliation.
Some labels can include transmission or other generation-related items differently. Read the actual source and contract rather than create a national component list from the term alone. The buyer should be able to point to every included item and explain what remains outside the comparison.
What should a benchmark comparison table show?
Show the source, period, units, coverage, and conditions alongside the competing proposal. A single rate column conceals assumptions that can materially affect the result. Use a separate row for unresolved exclusions rather than enter zero.
| Field | Utility benchmark | Supplier offer |
|---|---|---|
| Account | Applicable utility and schedule | Quoted meter and eligibility |
| Period | Benchmark effective dates | Proposed service window |
| Units | Original and converted rate units | Matching rate units |
| Coverage | Included comparison components | Included components and exclusions |
| Conditions | Applicable utility treatment | Fees, volume, credit, and other provisions |
If periods differ, explain the limitation in the recommendation. The fact that one quoted rate is below the current benchmark does not establish its cost against every future benchmark month during a multi-year agreement.
What does an assumed comparison calculation look like?
Suppose, only for illustration, the hotel uses 55,000 kWh in a specified month. Assume the relevant benchmark component is $0.108/kWh and a fictional supplier offer covers the same modeled components at $0.101/kWh. The benchmark amount is 55,000 × $0.108 = $5,940.
The supplier’s modeled component amount is 55,000 × $0.101 = $5,555, an assumed difference of $385 for that month. These are invented planning inputs, not available rates or a verified savings result. Utility delivery, taxes, and unspecified costs are excluded unless expressly included in the defined component boundary.
If the fictional offer also adds an assumed $100 monthly charge, the modeled difference falls to $285. That adjustment demonstrates why the comparison needs complete price treatment. It does not establish whether any real supplier has that charge or predict how either alternative behaves in later periods.
Why can public business offers require further eligibility checks?
The hotel’s account class and supplier appetite determine which offers are relevant. A small-business published price may not cover a larger commercial meter or a customized load. A ZIP code helps locate options but does not establish the property’s complete purchasing eligibility.
The Pennsylvania business shopping page says supplier eligibility differs between business offers. Ask the provider to confirm the account before relying on a rate. Retain the applicable utility schedule and the accepted supplier specification rather than assume every displayed offer can serve the property.
This matters for portfolios as well. Two hotels may have similar annual usage while belonging to different utility schedules or markets. Use an account-level comparison and aggregate the resulting dollars only after each site’s benchmark and offer boundaries have been validated.
How should owners and operators use the term differently?
Owners use the benchmark to understand the supply decision’s economic boundary and the assumptions behind a recommendation. Controllers reconcile billed rates, service dates, and units. Engineering provides the operational forecast that determines how a quoted rate translates into future expense.
The supplier should explain its equivalent price and exclusions. The utility is the source for the applicable benchmark and tariff treatment. A broker can organize the comparison, but should not substitute a promotional estimate for the documented account information.
Give each person an appropriate record. Management needs a concise comparison and accepted risks; accounting needs the underlying price schedule and service dates; engineering needs to understand when a forecast change affects the purchasing assumptions. Using one term consistently makes those handoffs easier to check.
What verification process prevents misleading comparisons?
Verify the actual benchmark and proposal before calculating a difference. The arithmetic is easy once the boundaries are known. Most avoidable mistakes occur earlier, when the wrong period, account, or total-bill number is selected.
- Identify the meter, utility, and relevant account schedule.
- Retrieve the benchmark and its stated effective period.
- Record original units and included components.
- Confirm the supplier’s account eligibility and service window.
- Map exclusions, fees, and compensation to the same boundary.
- Calculate modeled dollars on a common consumption assumption.
- Explain unmatched periods and remaining price uncertainty.
- Retain the source records with the approved recommendation.
The EIA discussion of electricity price influences explains why market and network costs can change. It provides context, not an individual hotel benchmark or supplier quote. National commercial averages should not replace the account value in this verification process.
Where does broker compensation belong in the comparison?
Ask whether the intermediary’s amount is embedded in the supplier price or payable separately. Request its payer, calculation method, units, and service scope. A supplier-paid adder can be included without appearing as a distinct line on the hotel’s bill.
Count embedded compensation once and include additional agreed amounts where relevant. Do not describe the difference between two headline numbers as the complete economic result while omitting a separately payable fee. The benchmark is useful when the hotel understands what each price includes and what assistance the compensation funds.
What should change when the benchmark is updated?
Retain the new value with its source and effective dates, then update comparisons covering that period. Preserve the earlier record so prior invoices and decisions remain explainable. A changed reference does not retroactively alter the price the hotel agreed with a supplier.
If management revisits its purchasing decision, review the current commitment before acting on a new benchmark. The purpose is informed comparison within actual obligations, not repeated switching based solely on whichever number appears lower today. A documented boundary, period, and account keeps price to compare useful throughout the purchasing and billing cycle.