Utilities Can’t Profit from the Sale of Electricity

This may be hard to believe, but in deregulated areas, utilities can’t profit from the sale of electricity supply. In fact, they purchase electricity at wholesale rates from a generation company to sell back to you at the same cost. Since they can’t profit from supply, there’s no incentive for the utility to find the best rates for you or to keep you as a customer for the supply portion of your bill.

So how do utilities make money? From distribution and transmission. In other words, the delivery of your electricity, as well as maintaining wires, poles, and meters that transmit the electricity to your home or business.

Will the Utility Charge More for Distribution and Transmission if I Switch?

Absolutely Not.

Distribution and transmission fees will stay the same no matter who supplies the electricity. Generally, there will be a flat fee for processing, taxes and other miscellaneous charges, and a rate that is charged for distribution that is based on how much electricity you use. Generally, the distribution rate is around 2 or 3 cents per kilowatt hour (kWh). So, if you use 500 kWh, your distribution charge should be somewhere around $10-$20.

Will My Utility Help Me Find a New Provider?

Generally, no. Some states’ utility commissions have programs with purposes of educating consumers as well as providing them with a list of available suppliers in their areas. However, most don’t post the providers’ available rates and plans. That’s why companies such as ElectricityRates.com came about. We’re here to present to you current rates and plans of some of the best retail electricity providers available to you.

Get started by using our FREE Compare & Switch tool at the top of this page. With the tool, you can compare providers and switch online. We’ll never charge you, and we’ll never ask for your credit card information. We’re simply here to help you make the best, most informed choice.