How to Switch Energy Providers?
Not long ago, you only had one choice of energy provider. Whichever company was in your local area was the one you had to purchase electricity from. Energy deregulation had changed that. Now, consumers can shop for an energy provider that fits their budget and values. Nordic Energy Services is an alternative retail electric provider (AREP). We've put together this guide to help you better understand how to switch energy providers.
What is Energy Deregulation?
Electricity goes through two major stages to get to your house: generation and distribution. Because distribution requires a single set of electrical lines to deliver homes, only one provider can offer this service. In markets without energy deregulation, this provider also generates and sells electricity.
Deregulated markets allow multiple providers to generate electricity. This gives consumers the option to choose between electricity providers. Opening up the market in this way forces providers to compete for customers, forcing lower prices and better service.
How to Switch Energy Providers
If you live in a deregulated market, you may find that there are better deals to be had on your electric bill. Depending on your priorities, this could mean cheaper prices or more sustainable power generation. Deregulation means you get to decide who gets your money and why. The steps below outline how to switch energy providers.
Step #1: Understand Your Current Contract
The first thing you must do is look at your existing energy contract. Specifically, you'll want to look for terms that might impact a switch. Are there any early termination fees you must pay if you move to another provider? What requirements are laid out for the process of switching? Fully understanding the existing contract will make the next steps smoother.
Step #2: Assess Your Energy Needs
Analyze your past energy bills to determine your average consumption. If you have reason to believe your consumption habits will change in the future, factor those in as well. The idea is to understand your energy consumption so that you can choose a plan that fits your needs.
Step #3: Compare Offers
The final step is to research the electric service providers in your area. The number of options you'll have depends on the service area. For each provider, look at their plans and compare prices on the plans that fit your needs. Be sure to pay close attention to the contract terms before signing up. If renewable energy is important, look for companies that use it.
Step #4 Sign Up
The final step is to sign up with the provider you've chosen. This is typically accomplished by filling out a form on their website or calling their customer service number.
The Difference Between Electricity Supplier and Utility
When switching energy providers, it's important to understand how they differ from utilities. To do this, think back to the two stages. The electricity supplier is the company that generates or resells electricity generated by someone else. This is the stage of the process that you can shop around for.
Once the electricity is generated, it needs to get to your home. Because having multiple sets of power delivery lines isn't practical, a single entity still handles power distribution for a geographic location. This is the job of the utility. While you can change your energy provider in deregulated markets, you can't change your utility.
How to Shop for an Energy Provider
This section will go more in-depth and compare the various energy providers available. When shopping for a new provider, consider how each compares in these areas:
- Price: Compare the cents per kilowatt-hour (kWh) rates. Providers that offer fixed-rate plans can help you avoid seasonal price fluctuations.
- Contract Terms: Look for contracts with flexible terms, especially if you anticipate changes in your energy usage or living situation.
- Renewable Energy Options: If your environmental impact is important, seek out providers offering green energy plans.
- Customer Service: Research customer reviews and ratings to get an idea of what the provider's customer service quality will be like.
Image Credits: Bombermoon/Shutterstock
