Frequently Asked Questions about Switching Electricity Providers
- What will change when I switch providers?
- Can businesses change electricity providers?
- What happens in a power outage?
- I rent my house; Can I still switch providers?
- I changed providers, but now I’ve found an even better deal; Can I switch again?
- How much money will I save by switching to a new provider?
- I saved money by switching electricity providers; Can I do the same thing with my natural gas service?
- What is meant by the phrase “Electricity Deregulation” or “Electricity Restructuring”?
- What is a “Variable-Rate Contract”?
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.
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.
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.
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.
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.
We can’t tell you exactly how much you will save (or if you will save at all). We can give you information on how to compare providers in order to find the best plan that fits your needs. You’ll find that information here.
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.
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.
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.