A Clear Guide to Choosing Your Electricity Supplier

Choosing an electricity supplier can feel like a complicated task, but it doesn’t have to be. If you live in an area with energy choice, a few simple tips can help you navigate your options with confidence. This guide will walk you through everything you need to know to make an informed decision.

First, What Is an Electricity Supplier?

Before diving into tips, it’s important to understand the two main players involved in getting power to your home: the utility and the supplier. This is a common point of confusion, but the difference is quite simple.

  • Your Utility: This is the company that owns and maintains the physical infrastructure, like the poles and wires, that delivers electricity to your home. They are responsible for responding to power outages and handling repairs. You do not have a choice of utility company; it is determined by where you live. Examples include Con Edison in New York or Pacific Gas & Electric (PG&E) in California.
  • Your Electricity Supplier (or Provider): This is the company that buys electricity on the wholesale market and sells it to you. In many states, you have the power to choose your supplier. If you don’t choose one, your utility will act as your default supplier, often at a variable rate called the “Price to Compare” or “Standard Offer Service.”

Think of it like this: the utility is the delivery service that brings packages to your door, while the supplier is the store where you bought the items inside the package. By choosing a supplier, you are simply choosing which store to buy from, not changing the delivery service.

Key Tips for Choosing the Right Supplier

Making a smart choice comes down to comparing a few key factors. Here are the most important things to consider in your search.

1. Understand Your Current Electricity Bill

Your current bill is the best tool you have. Before you start shopping, grab a recent copy and find two key pieces of information:

  • Your “Price to Compare”: This is the rate (in cents per kilowatt-hour, or kWh) that your utility is currently charging you for the electricity itself. Any supplier you consider must offer a rate lower than this for you to save money. This is sometimes called the “default rate” or “standard offer.”
  • Your Monthly Usage: Look for your usage in kWh. Knowing how much electricity you typically use each month helps you accurately calculate potential savings with a new plan. Most bills show a graph of your usage over the past year.

2. Compare Different Plan Types

Suppliers offer different types of plans, and the right one for you depends on your tolerance for risk and your desire for a predictable budget.

  • Fixed-Rate Plans: With a fixed-rate plan, you lock in a specific price per kWh for the duration of your contract, which could be anywhere from 6 to 36 months.
    • Pros: Your rate won’t change, making your bills more predictable and protecting you from sudden market price spikes. This is great for budget-conscious households.
    • Cons: If market prices for electricity fall, you will be stuck paying your higher, locked-in rate.
  • Variable-Rate Plans: With a variable-rate plan, the price you pay per kWh can change from month to month based on market conditions.
    • Pros: You could save money when wholesale electricity prices are low. These plans often have no long-term contract or cancellation fees.
    • Cons: You are exposed to market volatility. A heatwave or energy crisis could cause your rate, and your bill, to increase significantly with little warning.

3. Read the Fine Print: Contracts and Fees

This is one of the most important steps. A low advertised rate can sometimes hide unfavorable terms. Look for these details in the contract’s “Terms of Service” or “Disclosure Statement”:

  • Contract Length: How long are you committing to the plan?
  • Early Termination Fee (ETF): Is there a penalty if you want to cancel your contract before it ends? This can range from a flat fee, like $50, to a charge based on your remaining months.
  • Introductory Rates: Is the low rate you see only a “teaser” rate for the first few months? Make sure you know what the rate will become after the introductory period ends.
  • Renewal Policy: What happens when your contract expires? Many plans will automatically renew you into a new plan, often a variable-rate plan, if you don’t take action. Mark your calendar for a month or two before your contract ends so you have time to shop for a new plan or cancel.

4. Consider Renewable “Green” Energy Options

If supporting clean energy is important to you, many suppliers offer plans that source electricity from renewable resources like wind, solar, or hydropower. These plans work by purchasing Renewable Energy Certificates (RECs) on your behalf to match your electricity usage. While these plans might come at a slight premium, they are an easy way to reduce your carbon footprint. When comparing, check the percentage of renewable energy offered; some plans are 50% renewable, while others are 100%.

5. Check the Supplier’s Reputation

A great rate isn’t worth much if the company has poor customer service. Before signing up, do a quick background check. You can look up company reviews on the Better Business Bureau (BBB) website. More importantly, your state’s Public Utility Commission (PUC) or Public Service Commission (PSC) often has resources to track customer complaints against suppliers. A simple search for “[Your State] public utility commission” will usually lead you to the right place.

How to Make the Switch

Once you have done your research and picked a supplier, the actual process of switching is very simple.

  1. Visit Your State’s Official Comparison Website: The safest and easiest way to shop is through your state’s official energy choice website. Examples include PAPowerSwitch.com in Pennsylvania and PowerToChoose.org in Texas. Search for your state’s specific site to see a list of licensed suppliers.
  2. Enroll with Your Chosen Supplier: You can typically enroll online or over the phone. You will need your utility account number from your bill.
  3. Enjoy the Seamless Transition: Your new supplier will handle all the details of the switch with your utility. There will be no interruption to your service. Your utility will continue to read your meter, send your bill (which will now show your new supplier’s charges), and respond to any power outages.

Frequently Asked Questions

Will my power go out when I switch suppliers? No. The switch is a seamless administrative process. The physical delivery of your electricity through the poles and wires remains exactly the same and is managed by your local utility company.

Who do I call if I have a power outage? You should always call your local utility company for outages, downed power lines, or any other service emergencies. Their contact information is listed on your monthly bill.

Can I switch electricity suppliers if I am a renter? Yes, in most cases. As long as the electricity account is in your name, you have the right to choose your supplier. It is always a good idea to check your lease agreement, but it is uncommon for it to restrict your choice of supplier.