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Thanks to the deregulation of the energy market, consumers now have the option to compare electricity companies and choose one that fits their budget and needs. This doesn’t apply to all states, but if you live in a deregulated area, then it is important to do your homework before you sign a contract with an energy company.

There are several ways that electricity providers compete with one another. While some offer low prices for long-term contracts, others generate power from renewable energy sources. If you are shopping for an electricity company, then the following five tips can help you find the perfect service for your personal and financial goals:

  1. Find out If Your State Has Deregulated the Electricity Market
    You can obtain this information from two sources: either your current supplier or the state utility commission. Each state has its own utility commission, but the name varies from state to state. Examples include public service commission, utility regulatory commission, public utilities commission and utilities commission, among others.
  1. Research Providers in Your Area
    You can find a list of electricity companies that are licensed by the state in the office of your state utility commission. Alternatively, you can obtain supplier information on the company’s website or by calling it directly.There are also websites that let consumers compare local electricity companies by rates, contract features and other metrics. For example, business and homeowners in Illinois may find this webpage helpful: http://www.localelectricitycompanies.com/illinois/.
  1. Compare Rates
    Find out if the supplier’s rates include generation, transmission, distribution and monthly customer charges. The company should provide a breakdown of all fees in its statements.Also, ask if the provider’s rate is fixed or variable. Fixed rates remain the same for the entire term of the agreement. Variable rates, however, change with market shifts. Variable rates can help clients save money if the rates drop, but if they increase, then customers may wind up paying significantly more without budgeting for the extra expense.
  1. Compare Contracts
    Call the suppliers you are interested in, and inquire about their contracts. Some companies offer plans that lack minimum contract periods and monthly payments. Other suppliers offer contracts with minimum terms that last several years. Such contracts prevent clients from cancelling early. Ask the company about the length of its contracts, penalties if you break the contract, and what happens when the terms of the contract expire.You should also find out how your credit will affect the agreement. Some suppliers ask clients with questionable credit histories to make deposits.
  1. Discuss Payment Options
    Ask which payment options the company offers. Some contracts have a budget-billing plan. Find out what happens when customers miss payments, and ask about your supplier’s equipment charges, such as fees for special meters.

    Many local electricity companies offer customers a choice of energy sources, including renewable and non-renewable energy. Your electricity supplier should provide details on how it generates electricity. 

There are countless ways for property owners to save money, but most can benefit from keeping their energy bills low. Try these five strategies the next time you compare electricity companies.

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