Energy Supply
In deregulated electricity markets, or electric choice markets, energy supply refers to the generation portion of energy which is the part that customers can choose an alternative energy supplier to service their home or business.
When an energy market is restructured the delivery portion remains regulated. Even though you can choose who supplies your electricity or natural gas, you still have to receive that energy from the local utility. The energy bill will have charges for the energy supply, or generation, as well as regulated charges for the delivery of the energy to the property. No matter which competitive energy supplier you choose, the regulated delivery charges will be the same.
Often customers are worried that if they switch energy suppliers, by signing an energy contract, their utility company will make up the difference by charging them more for the delivery of that energy. This could absolutely not happen. For one, those delivery charges are regulated by the state utility commission. Perhaps more importantly, the restructuring of the energy market breaks up the former energy monopoly into different companies.
The company that remains as the energy delivery company is not in the energy supply business. This means that they do not care if you shop for competitive energy rates because revenues and profit margins will remain the same no matter who supplies your energy. The default supply rates that they provide are the result of auctions held at the wholesale level. Even if you are on default service your money is still going to a competitive energy supplier, and not the utility, for the energy supply part of your bill.
Energy shopping can result in significant savings on the energy supply portion of electric bills in many energy choice markets. Businesses and households in PPL, PECO, PSE&G, JCP&L, ACE, CP&L, UI, BGE, and more are finding electricity savings. In some of these energy markets, the electric bill clearly separates energy supply charges from energy delivery charges. This makes it easy for customers to compare energy prices. Other markets are a bit more confusing as energy supply and delivery charges are not easily separated. Working with a professional energy consultant like ElectricRate.com can help you understand your electric bill which will result in electricity savings.
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