FAQ – Energy Deregulation

How can Energy Deregulation save me money on my utility bills?

When your state deregulated its energy market it was with the intent to open the industry to competition and allow energy supply companies to buy energy in the wholesale markets and a portion of the savings on to consumers. This electricity or natural gas flows into the local electric or gas energy pool and is delivered to your home or business by your local utility company via existing power or gas lines just as it always has. The only difference will be a new energy supplier with a new rate on the supply portion of your bill.

How much money can I save?

Actual savings is a function of comparison of the rate you would be paying to your local utility company vs. the rate you would be paying to the new energy supply company you choose.   Most utility companies have charged a rate per kWh for electricity or per MCF for natural gas plus a supply fee plus required taxes for the supply portion of your energy bills.  Some energy supply companies also have supply fees and some charge the taxes in addition to their supply rate, while other energy supply companies charge one all-in fee that includes the entire cost of the energy being supplied, without additional fees and including all taxes on the supply.  Therefore you need to consider all these factors in determining which supplier will net you the most savings.

Where can I find information about competitors?

The public utility commissions of most states have created consumer websites to help the public learn about and choose an energy supply company. Most of these websites show all of the different suppliers in a given market, including a description of the rate plans offered by each company, if the company offers Renewable Energy, if the company offers a fixed rate or variable rate plan, if the company charges a termination fee, and current company prices.  We cannot be responsible for the accuracy of these websites, but we have provided links to these sites in all states for which we offer an Affinity Program on the Home page of this blog under the caption Supplier Comparison .

What is an Affinity Program?

An Affinity Program is a structured marketing effort that rewards and therefore encourages loyal buying behavior.    This is typically accomplished in a business partnership in which one company offers special rates or services to another company’s existing customers and by which both companies expect to increase revenue, or in an agreement with customers to provide additional customer referrals to a vendor of goods or services, such as a public utility company in exchange for reduced rates or referral fees.  Links to the Affinity Programs with which we are affiliated can be found on the Home page of this blog under the caption Affinity Programs.

What does it mean when my bill lists a price to compare?

Price to Compare is listed right on some electric utility bills and is a product of the amount of kWh used during the billing cycle and the cost per kWh. This number is helpful when comparing value offered by various energy supply companies when deciding on whether and to whom to switch your meter.

What does it mean to switch my meter?

The term switching a meter is typically used to refer to the process of changing the energy supply company you have chosen to provide the electric or natural gas to your public utility company for delivery to your home or business.

What information do I need to have available when I switch my meter?

All of the information necessary to switch your meter is available on the most recent monthly utility bill for the meter to be switched.

Does it cost anything to switch my meter?

Meter enrollment is typically free to join a new energy supply company and typically free to cancel supply service from a public utility company; however, some energy supply companies have cancellation penalty provisions so it may not always be free to switch from one energy supply company to another.

What is a monthly variable rate and how is it different from a fixed rate?

A monthly variable rate means that the rate changes according to the price of the electricity or natural gas product each month. A fixed rate means that you will pay the same rate for a fixed period of time, no matter what the market price of the energy product is that month.  A fixed rate contract will provide a stable price over time and it can save or cost a consumer money depending on whether the long-term cost of the energy product goes down or up.   A fixed rate contract typically carries a requirement to remain with the energy supplier for the fixed period of time and a termination penalty if the contract is cancelled before that time period expires.

What is the difference between a residential rate and commercial rate?

A residential rate is charged to homes and a commercial rate is charged to businesses. Each bill has a rate code associated with it. Residential rates are normally given a code either starting with, or containing a designation of R.  Commercial rate codes are based on various factors ranging from type of business, to volume consumed, to geographic location of the business. In all cases you can contact the utility providing service on the account to determine the exact classification of any rate code in question.

Why can my public utility company not do what the suppliers do and lower their supply rates the same way?

Each public utility company enters into long-term fixed-rate contracts to acquire their energy product in order to help protect their customers from changes in generation costs, but they pay a premium for the decreased risk.

When will my new supply rate officially take effect?

On the date of your next regularly scheduled meter reading after your meter has been officially accepted as switched to the new energy supplier. So it could take 30 days or more before your new energy supply company’s name and new rate appear on your next full monthly bill after you switch your meter. To avoid delays, please make sure you accurately report all of your customer data when you switch your meter.

Will my public utility company be affected if I switch my meter and will they that have a direct or indirect impact on my account with them?

No, they do not earn a profit from their supply charge, so it’s no loss for them.  They retain you as a customer for delivery and service of your meter.  Deregulation legislation requires them to facilitate the process and in fact, they have sent you a letter encouraging you to switch your meter in order to save.

Will my public utility company charge me a penalty for choosing an alternative energy supplier? 

No. there is no penalty from the public utility company for switching to another supplier.

Will my local public utility company still service my account?

Yes. You will still be a customer of your local public utility company. They will continue to provide the electricity or natural gas, customer service, meter reading, billing and repairs.

Will my electric or natural gas be interrupted when I change my supplier?

No. The transition is seamless. All you’ll notice is your new electric rate the first month after the next meter reading date. It’s that easy!!

Will I have to get a new meter or any new equipment?

No. You keep your meter and your local public utility company will still read it just as it always has.   The energy product supply lines at the curb and the lines connecting your home or business remain the same.  Nothing changes other than the bill.

If I switch my meter will the public utility company treat me differently during an emergency? 

No.  You will remain contracted with the public utility company to deliver the energy product, be it electricity or natural gas, to you and to service any emergencies or disruptions in service, regardless of the provider.  In truth, the public utility company cannot differentiate which customer is receiving which energy and most emergency service repairs affect an entire community with many different potential energy supply companies.

Who do I pay?

Your current public utility company will continue to submit bills to you on the same date and frequency as before and you will continue to pay the public utility company directly.  Your new energy supply company will have negotiated a contract with your public utility company for the utility to then remit to the energy supply company the supply portion of the payment you have paid. You will still receive just one monthly bill and will continue to make the payment to the same public utility company in the same manner as you are used to paying. Nothing changes except that the new energy supply company will be listed on your bill as your energy supplier and the supply rate will be the rate being charged by the new energy supplier.   If you wish to change your current payment method you can do so through the public utility company, just as in the past.

Can I still use a budget plan?

If a customer is on a budget plan, they may or may not be affected if they switch their meter to an energy supply company.   For instance, in New Jersey and Maryland markets electricity customers typically cannot continue on a budget plan, but in Pennsylvania and Connecticut markets they typically can continue on a budget plan. Therefore, whatever market a customer is in,  customers paying on a budget plan should always verify if and how their budget plan would be impacted if they switch their meter.

Who do I contact in an emergency?

Your public utility company, just as in the past.

Who do I contact about the supply cost of the bill if there is a question as to the rate charged?

The new energy supply company.