By our very own Pat Kittredge

The recent plague of joblessness has certainly hit the college age student the hardest. A vicious cycle has seemed to emerge and, unfortunately, become the norm for college students.

The cycle being: You need experience to get a job, and to get that experience usually involves dedicating a large chunk of your time working for free.

Internships are usually the experience outlet that more and more colleges have built into graduation requirements, and those internships are typically unpaid.

Now don’t get me wrong, the experience and skills you (hopefully) pick up during an internship are invaluable, but why do colleges and universities charge you credit hours for an unpaid internship typically off campus with no professor in sight?

By Dave K

About a year ago the Commonwealth of Pennsylvania expanded the store shelves for more than one electricity provider for its residents.  Shockingly (sorry, I couldn’t help myself with the pun) I sat around for a year before looking into it more closely.

As the old saying goes, “I remember it like it was yesterday”.  “SHUT THE LIGHTS WHEN YOU LEAVE THE ROOM or, I’m going to get the belt out.”  Then the sprint upstairs to quickly stuff a coloring book in the backside of my PJs, just to be safe.  As a kid it was hard to understand the notion that for every dollar sent to Connecticut Light & Power it might mean a little less food in the fridge.  This was particularly important to a family of eight during the 1970’s.  The almighty utility provider was a monopoly, we had no choice but to get the product from that single provider, so turn the @%*& light out.

Fast forward.  Now I have over thirty options to select from when buying my electricity.  While it certainly still makes sense to shut the lights when leaving a room I can also lower the bills by picking the right provider.  At first blush you might whisper… “Dave, the one with the lowest price, pick the one with the lowest price!”.  I thought it might be that easy as well, but here is what I have learned:

• There are not only thirty different providers but they also have designed different pricing options
• Pricing is based on a basic unit of electric energy called a kilowatt-hour or kWh
• There are two core components within the pricing; electricity Distribution (regulated by government agencies) and Generation set by the supplier you chose
• Prices will change periodically and pricing plans can be fixed for six months to three years or variable where the price is set for three months
• You can switch providers as often as you like but beware of cancellation fees, particularly with the “fixed” pricing plan options

What to do?

If you are like me and you live in one of the 15 states (plus Washington DC) that have deregulated the purchase of electricity “generation”, take these four steps:

• Call your current electricity Distributor (the company that actually bills you, in my case it is PPL Corporation) and speak with a customer service representative that can explain how the program works and how they participate.  For me, PPL is the provider of last resort if I don’t select a third party Generator.  They bid for a large purchase of electricity quarterly and then pass that cost along to the consumers.  If you don’t select a separate electricity Generator you will get the prices negotiated by the Distributor as a default.
• Get a copy of your last billing statement and review the number of kWh’s used over the previous twelve months.  This is the key information needed for you to compare the real impact of prices on your wallet.  Example with the assumption of 15,000 kWh used annually:

Current Generator – $0.0799 per kWh multiplied by 15,000 = $1,198.50 annual cost

Alternate Generator – $0.0739 per kWh multiplied by 15,000 = $1,108.50 annual cost

Net annual saving from selecting Alternate Generator =       $90.00

If $90 makes a big enough difference in your pocket to go through the exercise of changing electricity Generators, by all means make the change.

• The Distributor can also point you to a reputable web-site for Generator comparison shopping.  Once you have identified Generators that offer the best price (and pricing options) make sure you understand the details including the length of the agreement, how frequently prices are reset and whether or not there is a cancelation fee if you decide to switch Generators during the contract period.  Lastly, ask if the contract is automatically re-upped if you don’t do anything to change Generators.
• If you plan to work with a third party Generator, call them and confirm you intend to do so.  They will handle the rest including informing the Distributor of your agreement.

Lights out!

We had a chance yesterday to sit down with Larry Swedroe, who writes for CBS MoneyWatch and is the principal and director for the Buckingham Family of Financial Services. Larry’s latest book Investment Mistakes Even Smart Investors Make and How to Avoid Them
examines the biggest pitfalls even the most seasoned investors make in today’s market.  Take a listen!

On last week’s Financial Impact Factor Radio with Paul Petillo, financialfootprint discusses the topic of saving for college. A bit of a misnomer, parents looking to put money away for college need to do more than just save; they need to invest. And like all investment options, it involves risk.