From the need to lower high electric bills to an interest in better customer service, there are many reasons businesses and homeowners may want to switch electric companies. But, before you get too excited about the reliable service, cost savings, and enhanced customer support that may come with securing a new gas and electric company, there are a few things you need to know.
At EnergyBot, we provide property owners with customized electricity rates and expert analysis that make it easy to find the best energy plans. We’ve done our homework and understand how to navigate the complex energy market so you don’t have to. No matter what your reason for looking into a new utility supplier, we can help you experience a better level of service while meeting the renewable energy goals of your home or business.
Read on to learn everything you need to know before switching electric companies.
If you currently live or work in one of 15 deregulated energy states, you have energy choices. In these deregulated states, such as Texas, Pennsylvania, and Illinois, electricity providers compete with each other by offering different rates and terms — such as rewards or other perks — to get your business. While electricity suppliers experience competition from other providers, the actual delivery of electricity is regulated by each state’s public utility commission.
However, once these companies have your business, property owners in deregulated markets have the right to switch electric companies as often as necessary to meet their needs. It’s also important to note that when you switch electric companies, your electricity will still be delivered in the same way.
A different provider will simply bill you under the terms of the new contract. In fact, making the move to a new energy company does not typically require an on-site visit from a technician, nor should it come with inconvenient service interruptions.
The energy market did not start out regulated in the early days of the U.S. Prices stayed competitive due to the steady demand for energy, which was met by building larger power plants and investing in more energy-efficient production. But without a coordinated distribution plan among large utility holding companies, infrastructure was negatively impacted, thus resulting in the delivery of poor service at increased costs to energy users.
It wasn’t until the Public Utility Holding Company Act (PUHCA) was passed in 1935 that the Securities and Exchange Commission was authorized to regulate and limit the operations of electric utility holding companies. Nearly 30 years later, the Great Northeast Blackout of 1965 left 30 million U.S. and Canadian customers in the dark for more than 10 hours. The North American Electric Reliability Council (NERC) responded by splitting the country into 10 new energy regions in order to geographically delegate responsibility for improving the reliability of energy distribution.
After a surge in local utility monopolies and price hikes for their services followed, the Federal Energy Regulatory Commission (FERC) was formed in 1977. This federal agency mandated energy deregulation to repair the energy infrastructure and allow utility companies to manage their own distribution. Energy deregulation also allowed consumers to choose the best electric plans and suppliers for their energy needs and budgets.
Utility companies, also known as Transmission & Distribution Service Providers (TDSPs) or Electric Distribution Utilities (EDUs), physically deliver gas and electricity to your home or business. These utility companies own and operate the utility poles and power lines that facilitate the distribution and transmission of energy, and are responsible for managing emergency power restorations and repairs. Electric suppliers, or Retail Electric Providers (REPs) as they’re known in Texas, serve as a middle man between the TDSPs and the end consumers.
These utility providers purchase large volumes of electricity at wholesale value and set the terms and rates for customer use. It’s the electric suppliers that typically provide customer service, billing, and serve as the primary contact for service issues, but utility companies in some states manage one or more of these responsibilities. As mentioned, deregulated electricity states like Texas offer property owners an opportunity to compare and shop around for the best utility supplier that offers the best rates — and level of service.
While there may be early termination fees associated with ending a contract with an energy supplier, it’s the right of the consumer to switch electric companies at any time. Most utility providers offer many different types of term contracts including month-to-month, short-term options, multi-year contracts, as well as various rate plans including variable or fixed.
Review your current contract to better understand your existing rates, terms, and penalties before you find a new supplier. It tends to be better for your wallet if you stick with your current power supplier through the end of the contract before making the switch. If your reasons for switching warrant a breach of contract, ask your new electric company if they can assist with any related fees — or waive upfront costs.
At the end of the day, the most important thing to consider when you’re switching energy suppliers is the potential for value. At EnergyBot, we analyze and track energy rates to help you find the best value for your home or business. If you find the right provider that delivers the value you need, we suggest securing their services and reaping the benefits right away.
As mentioned, it’s essential that you review your existing contract before making the switch. In fact, many states impose a “price-to-compare” provision if consumers don’t renew services with their utility providers. These variable price rates tend to be much higher than free-market rates and are to blame for many unwitting customers’ high electric bills.
Safeguard your home or business against unforeseen costs by checking for contract stipulations that may be associated with the following:
At EnergyBot, we are dedicated to making it easy for residential and commercial customers to find the best energy rates. We are the only online energy marketplace that allows consumers like you to find and secure the best energy plans without any hassle.
Now that you’re armed with everything you need to know about switching electricity companies, contact us to see how we can help you quickly and efficiently compare energy rates by state — and make the switch online today.