How does switching energy providers work?

What does switching energy suppliers mean?

Switching to a competitive energy supplier is a quick and easy way to take control of energy bills – for a home or business. When you shop around, you have choices about the rate, length of plan and where the energy comes from. Almost half of U.S. states have embraced energy choice – whether for natural gas, electricity, or both – and thousands of people switch energy suppliers every day.

 

Before you switch, know your energy bill

First things first, let’s look at your monthly bill. You’ll see it has two main costs, both of which can vary month to month. First is the supply portion, which represents the actual energy used to power your home or business. Second is the delivery or distribution portion, which accounts for getting that energy from the supplier to your refrigerator, air conditioner, and everything else you power.

Now you’re in charge of your energy

Until a few years ago, you had little control over your utility bills. Your local utility produced and/or bought your energy and transported it to your home or business. The state government set a price the utility could charge for its services, and that rate was reflected on your bill. Sometimes this worked well, but more often it meant you didn’t always get the cheapest or greenest energy.

In the 1990s, by changing a few key laws, the government gave consumers energy choice in some states.

Under this new system, the government regulates utilities and the energy they deliver but opened the door to suppliers that can offer you, the consumer, more competitive rates.

Now you have a say in the priciest part of their energy bill—the energy supply—and still enjoy the same, reliable service. It’s a win-win!

Want even more ways to save money on your energy bill? Check out our tips for practical ways to slash your energy bill and start saving.

Energy Supplier vs Utility: What’s the difference?

Producers – The companies that produce the energy you use.
Suppliers – The companies who shop for energy on the open market and sell it to you for a competitive rate.
Utilities – The companies that transport and deliver the energy you bought to your home or business.
Consumers – Anyone who uses energy — like you.