How to choose an electricity provider

Jul 2, 2014

From Oregon to Massachusetts, electric companies in states with deregulated energy markets are competing for your business, and when companies compete, the biggest winner is you.

If you live in a state with a deregulated energy market, then you do not have to buy from a single, government-sponsored electricity provider; there are many third-party distributors of electricity and natural gas at your disposal.

However, choosing the right electricity provider from that list can be confusing, so here is a list of things to consider when choosing your electricity provider.

Fixed or variable rate

Electricity, like gas, can be purchased either at a fixed or variable rate. Variable rates adjust from month to month based on usage and the cost of electricity production. This means that you will not have the same bill every month. Sometimes your electricity bill will be low, while other times it will be high.

Variable-rate plans are a gamble since they are extremely vulnerable to price spikes as the result of changes in the market. Fixed-rate plans are much safer insofar as you know exactly how much you are going to spend every month on your electricity.

In 2014, the polar vortex spiked the cost of natural gas and electricity across the country, and many customers who chose variable-rate plans for their electricity and gas saw their utility bills triple or even quadruple.

There are many factors that go into the cost of electricity, so it is much more prudent to find a low fixed-rate electricity plan that you know your finances can cover every month.

Compare competitors

You might be surprised by how many providers and third-party distributors are competing to win your patronage. By comparing the prices and plans offered by the various energy providers in your area, you can choose the best one for your needs.

Remember that although they all sell the same product, each electricity company is different. You should always research before you buy in order to avoid signing a contract that is going to hurt you in the long run.

Plan ahead of your move

Whether you are moving down the street or across the country, it is important to select an electricity provider before you arrive at your new home. Do your research and choose an energy provider before you make your move, and schedule for your utilities to be turned on in advance.

That way you can turn on your lights and plug in your computer before you even start unpacking the moving van.