Quick FAQs

Frequently Asked Questions about Switching Electricity Providers

What will change when I switch providers?

Short answer: Not much besides what you pay. Nothing needs to be installed; you don’t need to take a house call from the new company. They’ll contact your utility and the bureaucracy takes it from there. Your utility company still issues you the bill and you pay it in the same way. The only difference will be the new rate.

Can businesses change electricity providers?

Not only can businesses change providers; they’re likely to receive extra benefits in the process! The increased volume of electricity that businesses are likely to need gives them more clout in negotiations and improves their chances of getting a good deal.

What happens in a power outage?

When you switch electricity retailers, you local utility retains control over the physical wires sending power into your house. A fraction of your electricity cost is still paid to them, accordingly. This means that your old utility still has the same (legal and financial) obligations to restore power after it goes out. They can’t and won’t discriminate between types of customer, and they will fix your power just as quickly (or slowly!) as they always have.

I rent my house; can I still switch providers?

Yes, usually. The person who pays the electricity bill has control over the electricity contract. If the electricity bill comes to you, in your name, and you pay it directly, then you have the right to lower your rate by switching providers. If your landlord is paying the bill and adding the expense to your rent, you’ll need to talk to him or her.

I changed providers, but now I’ve found an ever better deal; can I switch again?

Maybe; it depends on the agreement you made with the first company. If you agreed to a contract with some duration (maybe six months or maybe two years) then the company will probably assign a cancellation fee for leaving them. On the other hand, some companies offer no-commitment plans without cancellation fees. Look before you leap into a contract.

How much money will I save by switching to a new provider?

Your savings will vary a lot. If you want to guarantee that you will pay less money, you can do so by signing up for a variable-rate plan that’s pegged to the utility company’s price. If your contract says that company must beat the utility’s price every month, then that’s what they have to do. On the other hand, if you choose a more uncertain contract, or a fixed-price contract, your savings are harder to predict. You might lose money or you might come out way ahead, depending on the market.

I saved money by switching electricity providers; can I do the same thing with my natural gas service?

Yes, if you live in a place that allows consumers to choose between natural gas providers. Many, but not all, locations with deregulated electricity also have deregulated natural gas. This map shows you which states have deregulated which commodity.

What is meant by the phrase “electricity deregulation” or “electricity restructuring”?

Deregulation, or restructuring, is a process in which many companies are allowed to compete to supply consumers with electricity. Where previously utility companies held a monopoly over all parts of the electricity sales process in an area, under deregulation they no longer hold exclusive rights to all components. Read more about deregulation here.

What is a “variable-rate contract”?

Signing a variable-rate contract means you will be charged a different rate for your electricity each month. This rate usually varies in some way on the basis of the market—it’s good to know exactly how. Note that your existing service from the utility company also has a variable rate, and that some alternate providers offer variable-rate contracts guaranteed to beat these prices.

The alternative to a variable rate is a fixed rate, with which you agree to pay the same price (per kilowatt-hour for the duration of the contract.