Energy Choice: How to Switch Your Electric Company

If you’re unhappy with your electric company, you can switch — if you live in a deregulated energy market.

Currently, there are 18 states in the US that have full or partial regions with deregulated energy choices such as gas, electric or both. If you live in one of these regions, you have the power to change which company supplies your electricity and the price you pay for it.

What deregulation does for the consumer is to ensure that you can choose from more companies and benefit from competitive prices, more innovative services and the freedom to make your choice based on specific needs, it said. Jake Edie, an adjunct professor who teaches a course at the University of Illinois Chicago on clean energy on the electric grid. For example, renewable energy options or customer service may be what’s important to you, and Edie says deregulation allows you to find what you want.

But just because you have the option to choose your electric supplier doesn’t always mean you should.

Choosing to switch energy suppliers is a personal decision, says Edie. This can be for a better price or for you to get your power from clean renewable energy such as solar, wind or hydro power.

Edie, who lives in a deregulated region of Illinois, switched suppliers so she could control where her electricity came from. Edie chose to innovate in a company that derives its power from clean solar energy.

Regardless of your situation or motivation, gathering all relevant information before switching energy suppliers is important. Here’s everything you need to know about how to switch energy suppliers in deregulated markets.

What is energy deregulation?

Energy deregulation is when governments reduce or ease regulations on electricity and gas markets to allow more companies to compete for business and eliminate regional monopolies.

Edie says history shows that consumers pay higher electricity bills when a utility company is responsible for generating, transmitting and distributing electricity in a particular area. Deregulation means consumers have a choice in who they buy their electricity from. Generally, deregulated markets tend to have more competitive prices and more consumer-friendly options.

As there are some advantages to deregulation, there are also some disadvantages. For example, multiple providers offering services can be complicated for customers to navigate. Some deregulated markets also face issues of price manipulation, which makes it confusing for consumers to understand your bill.

What is the difference between my electricity supplier and my utility?

Electricity supplier

Simply put, an electricity supplier — or generating company — produces electricity through a variety of methods. These methods use several fuels such as coal or biomass to rotate steam turbines to generate electricity. Alternative technologies include gas, wind, and hydro turbines, which use kinetic energy to drive these generators. In nuclear power plants, atoms are split to spin turbines and generate electricity. Some companies that generate clean energy also use renewable energy sources such as solar energy to generate electricity.

Utility or TDU

An electricity distributor, commonly known as your utility or TDU (transmission distribution utility), is a company that manages the network of power lines and transformers needed to deliver electricity from the transmission system to the your home or business. This company issues your monthly electricity bill and charges separately for supply (the actual electricity used) and delivery (the transport of electricity to your home).

Your geographic location usually determines the distributor and cannot be changed. However, while your distributor remains the same in a deregulated market, you can switch your electricity supplier or manufacturing company.

How to shop for an energy supplier

Consumers must consider several factors when shopping for an energy supplier in a deregulated market. These include the price per kilowatt-hour (kWh), contract terms, percentage of renewable energy offered and the reputation of the supplier. It is also important to understand your current electricity usage, which is reflected in your current utility bill.

Switching providers is a straightforward process and can be done online or over the phone, Edie said. Look for a consumer advocacy organization such as your state’s public utility commission (PUC) website, says Edie. The purpose of the PUC is to protect the rights of consumers. Your local PUC maintains a list of approved state suppliers, he said.

Don’t share your electricity bill with door-to-door salespeople, warns Edie. Unscrupulous sellers may enroll you in their service without your knowledge by asking for your account information.

How to switch energy suppliers

If you live in a deregulated state and decide you want to switch your energy supplier, here are some actionable steps you can take:

1. Research and compare suppliers: Gather information on different energy suppliers in your area and compare pricing plans, contract terms and services available.
2. Evaluate your current energy use: Review your current energy consumption and billing statements to determine your average energy usage and costs.
3. Check the terms of the contract with your current supplier: Review the terms of your current contract, including any termination fees or notice periods.
4. Identify potential new suppliers: Identify some potential energy suppliers that meet your needs and preferences.
5. Contact new suppliers: Contact selected suppliers to inquire about their services and prices. Ask open-ended questions to clarify the details of their plans.
6. Get quotes and compare offers: Request quotes from shortlisted suppliers and compare quotes, considering price, contract terms, and any additional benefits or incentives.
7. Choose the best supplier: Evaluate the quotes and choose the energy supplier that offers the most favorable terms for your needs.
8. Start the switch: Contact the selected supplier to initiate the transfer process. Provide the necessary information and documentation as requested.
9. Confirm the switch: Follow up with the new supplier to ensure the switch is successfully processed. Determine the start date of your new energy supply.
10. Notify your current supplier: Notify your current supplier of your decision to switch. Follow any necessary procedures for termination or cancellation.
11. Monitoring the transition: Track the transfer process and ensure a smooth transition to the new supplier. Check your first bill from the new supplier to ensure accuracy.

Questions to ask as you compare potential energy suppliers

If you are interested in switching your electric provider, here are some important questions to ask:

• What are the available pricing plans and contract terms? You should compare the costs of different providers and choose a plan that best suits your needs.
• Are there additional fees or hidden fees? Asking about additional charges ensures that you clearly understand the total costs associated with energy supply and helps you avoid unexpected costs.
• What is the source of energy provided? Knowing the source of energy is important for environmentally conscious consumers who want to prioritize the use of renewable or clean energy options.
• Are there any incentives or rewards programs available? Some suppliers offer incentives or reward programs. Asking about these programs can help you maximize potential savings and additional benefits.
• What is the supplier’s customer service reputation? It’s important to gauge a supplier’s customer service reputation, as it can affect your overall experience. You will gain insights into their responsiveness, reliability and ability to resolve issues quickly.

US states with deregulated electricity markets

According to the US Environmental Protection Agency, 13 states and the District of Columbia have completely deregulated or reorganized their electric utilities.

An additional five states have partially deregulated or restructured their electric utility markets:

Deregulation: How to move FAQs

Correction, Aug. 18: This story was originally presented as direct quotes of certain statements that were actually paraphrases of what the quoted individual said. Those passages are now translated precisely as paraphrases.