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The Best Way to Switch Electricity Providers

Switching electricity providers

In states that have deregulated energy, you have the power to choose from among the state’s many electric suppliers. This means you can take advantage of the competition to compare providers and find the best options at the lowest rates. While this can be a great solution to overpaying for electricity (or when you deal with poor customer service), there are several things you should keep in mind before switching.

Who can switch energy supplier?

Generally speaking, if you are in a deregulated area, you can switch suppliers. It’s that simple. It doesn’t matter if your electric account is residential, commercial, industrial, etc. There are a few key points to add to this though:

  • Individual electricity suppliers may only service certain customer classes or certain areas. You may not be able to choose from all the suppliers in your area, but you can still choose from available suppliers.
  • If you are in a contract, you can still switch electric suppliers, but there may be fees/penalties involved for early termination.
  • If you are behind on your bill payments, your supplier can place a hold on your account to keep you from simply switching to a new supplier.
  • Newly deregulated areas may open the market to one customer class at a time. Most start with large commercial accounts, then later open it to small commercial accounts, and finally to residential electric customers.

Who is the best provider?

One of the secrets of the energy market is that there is no “best” provider. Different electric suppliers have different plans, and the one customer may need a plan with entirely different products and options than what another customer needs. Even when it comes to prices, there is no “cheapest supplier.” Market prices change daily, and the suppliers all have different methods to calculate their electric prices. Today, one supplier may have the lowest offering for your account; tomorrow, one of the other suppliers might blow them out of the water!

It’s easier to talk about the providers that might not be good choices. Customer service, for example, differs greatly from one power company to another. Probably no supplier is perfect, but some have lengthy histories of customer complaints. There are also some that just aren’t stable as companies. Granted, sudden changes in the economy can sometimes kill off even a strong energy supply company, but there are some electric suppliers who just haven’t been in business long enough or who don’t have the financial backing to show that they can survive. That’s not to say you should never support start-ups; it’s just another factor to consider you compare suppliers.

Finding the best deals for gas and electric service

There are a few different ways you can shop for a new electricity or natural gas supplier. First, you could go to various suppliers directly and ask them about cost and options. This obviously takes time though. There may be dozens–or even hundreds!–of electric suppliers in your area. Are you going to call them all? If not, how do you narrow down your list of potential energy suppliers so that it’s more manageable?

Second, there are several comparison sites that make switching fast and simple: you can shop prices and sign up in minutes. Most of these, however, actually only have offerings from a few select suppliers. Do you know how they chose the suppliers they compare? Is it because they’re among the best, or is it because the site hasn’t been able to (or hasn’t gotten around to) partner with any others? More importantly, while this makes it easy to compare offerings, do you know what you will be getting from that particular plan when switching? Do they tell you up front about extra fees and charges? You might not be comparing apples to apples when you look at the different suppliers.

Finally, you can go through a broker and have them do the shopping for you. This, too, has many of the same problems. Do you know that you’re getting offers from a good enough selection of suppliers, or is the broker only getting electric and gas offerings from a small handful of suppliers? On top of that, some brokers charge you extra fees for their services. If switching this way, are you still going to save with a new, lower rate?

What will you need when you are ready to switch?

Our number 1 suggestion when you are looking at switching electric suppliers: know if you are already in contract and, if so, when it expires. One of the biggest problems we hear about is that people have switched suppliers, only to realize later that they were in a contract. The fees for breaking a contract can be significant, and we will never recommend that you switch to a new one if you are already in one. Granted, there are times when that might still be the right decision. You can pay early termination fees and still save money with a different provider, but that needs to be something you calculate carefully and determine on your own. If an energy provider or broker suggest it, be wary!

The next most important piece of the puzzle will be for you to know your electric usage. If you’re comparing on your own, make sure you have a good estimate of your annual energy usage from your past bills. If you are working with a broker, they will definitely need this information too. You can provide them with those bill copies, and with your permission, the broker can request a data file of your annual usage from your utility. A generic rate will rarely be as good as one that is tailored to your usage patterns.

Finally, the electricity rate offered by the provider will almost certainly not be the only charge on your power bill, so be sure to inquire about exactly what other charges you will see. Will there be additional taxes or monthly service charges? What extra charges will come from the utility? You don’t want to be surprised by your total bill when you think the energy rate, itself, sounds good.

If you have questions or need help, don’t hesitate to give us a call (855.625.3205 – CustomerService@TruEnergy.com). Even if you don’t sign up through us, we’re more than happy to give you tips on the process.