How to Choose the Best Electricity Supplier?
Looking for a new electric supplier can be daunting – there are so many rates, plans, and contract types out there, and trying to navigate through it all can ultimately deter you from switching. Don’t worry, we are here to help. Below is everything you need to know about choosing the best electricity supplier.
Let’s start by looking at how do you decide whether switching is the right choice…
Analyze Your Current Costs
Looking at the electricity price that you currently pay is the best place to start because it will help you determine how much are you able to save by switching. To compare the prices, you need to look at the electric supply charges on your utility bill, which will be expressed in cents per kilowatt-hour of electricity.
How do you know that you are paying too much? Well, if you haven’t yet switched suppliers, you probably are. Due to their regional monopoly, state utility companies try to hike up electric rates all the time and these hikes rarely get shot down by the regulators.
Review Your Current Contract and Plan
Even if you had already switched to a new electric company in the past, there is nothing stopping you from doing it again, and again. Just like with any other type of product that you consume regularly, you should always be on a lookout for a better deal – and some extra cash in your wallet!
That being said, switching suppliers can be costly if you are the type of person that tends to skim through the fine print in your contract. For example, if you are currently on a fixed-rate electricity plan, there might a penalty associated with switching out too early.
Conduct a Thorough Research of Suppliers
Of course, you want to make sure that you are signing up with a reliable and trustworthy energy provider. The more information you gather about your new supplier upfront, the better, but there are generally three things you should keep in the back of your mind:
Rates
The electric rate will probably be the most important factor in your decision-making process because it will ultimately dictate the overall price of your monthly electric bill. You should only choose to switch if the new electric rate per kWh is cheaper than your current one.
If you are not sure about your current rate, grab your most recent electric bill and find the price (in cents per kilowatt-hour) under the supply charges. That is your current rate – what you currently pay to the electricity provider to supply one kilowatt of your power.
Supplier’s Reputation
There are hundreds of suppliers out there, including a few ‘bad apples’ that you should try to avoid. In order to win over customers, some suppliers engage in deceptive marketing tactics, offer ‘teaser’ low rates only to slap you with high fees later.
One great resource to assess the reputation of the supplier is to look him up on the Better Business Bureau (BBB) website. This non-profit market analyst organization rates energy providers, based the complaints and reviews from customers and can serve as a great indication of the supplier’s integrity.
Trustworthiness
We all want to feel like we are contributing to a positive change in the world around us. Some suppliers try to do more than just offer cheap electric rates. Does the supplier source electric plans from renewable energy? Do they reinvest some of the profits into local community development projects? These are some of the reasons to choose one supplier over another.
Choose the Right Plan for You
Energy plans are like shoes. One size does not fit all. Below is a brief overview of the most common plans offered by a retail electricity provider:
Fixed-rate Plan
This plan will lock the price you pay per kilowatt-hour of electricity for the whole duration of the contract, even if the wholesale energy price fluctuates. These plans are economical and offer price security, but usually carry cancellation fees, if you decide to exit the contract early.
Variable-rate Plan
Opposite to fixed rate plans, there is no locked-in rate in a variable-rate contract, and the unit price of electricity might be cheaper one month and more expensive the next month. The plus side is that there is no commitment to stay on a variable-rate contract, so you can easily switch to another electricity company, without a penalty.
Indexed Plan
Indexed plans are a rare hybrid between plans and not as common as the other types. The price of your electricity is simply dependent on another factor, which will be disclosed in your electricity bill. For example, one electricity company can tie the price of electricity to the time that you use it – a plan that is commonly known as the Time of Use Tariff. Indexed plans usually offer better average rates than fixed-rate plans, but they require a fair amount of monitoring on the customer’s part to ensure savings.
Prepaid Plan
Not for the forgetful ones! If you choose this plan, you can top up power for your home as you go, kind of like a prepaid cell phone. However, if you don’t remember to top up when your balance is running low, you might find yourself without electricity half-way through a hot shower, since the energy provider will likely disconnect you.
Other Things to Consider
So you assessed all of the items above. You weighed the pros and cons. You compared the electric offers available in your zip code with your current rate. Here are some final considerations to choose the best supplier:
Minimum Usage Fees
Many suppliers have minimum usage requirements for the advertised electricity rates on their website. That means that in order to be eligible for the rate, you have to use a certain amount of electricity each month (otherwise you’ll pay a higher price).
Perks & Freebies
Since the deregulated energy industry is a competitive market, each supplier wants to do the maximum possible to win new customers. Many of them use the free giveaways tactic, gifting you with slick energy-related gadgets when you sign up for a plan.
Others offer additional benefits including attractive referral programs, rebates, or discounted equipment protection plans. What’s the catch? There isn’t one. All it takes is scouring for the best deal.
FAQs
How Do I Choose a Good Electric Company?
If you live in one of the 18 U.S. energy deregulated states, you have the power to choose your energy supplier and save money on your utility bill. The public utility commission in every state publishes information about residents’ energy choices on the website, including the list of certified retail energy providers (REPS) and offered rates. To compare and switch, you can enter your zip code on ElectricRate.com – we carefully vet through all major providers to bring you the list of reliable, trustworthy, and competitive offers.
How Do I Find The Cheapest Energy Supplier?
You should only choose to switch if the new electric rate per kWh is cheaper than your current one. Our website sorts through all major U.S. providers and organizes them in a list, based on price and relevancy. All you need to do is enter your zip code to find the cheapest offer.
How Do I Find Out Who My Electricity Supplier Is?
The easiest way to find out the name of your current supplier is to look at your most recent electric bill – the supplier’s name and your current rate (what you pay for a kilowatt-hour of electricity) will be listed under the supply charges section.
Updated on
