Electricity. It’s as important to modern life as running water. It keeps the lights on, the computers running, and vital medical equipment powered up.
For many people in the United States, the cost of electricity is one that they are responsible for regardless of the price tag or the origin point since they’re tied to their local utility for both the supply and delivery of electricity. Electricity deregulation, however, has allowed others to have some say over how much they’ll pay and even what percentage of that electricity originates from a renewable power source. Here we outline the five most common reasons to shop for a new electricity plan.
Five Reasons to Switch Electricity Plans
If you’re fortunate enough to live in a deregulated area where you can choose your electricity provider, you should periodically compare your current electricity plan with what’s available to see if it’s still competitive. Also, if your electricity plan contract term has expired, you may be paying a premium on the new plan your provider has given you. Rest assured that if you change electricity providers, your electric utility (wires and poles) will remain the same and there will be no interruption in service.
Here are the five most common reasons that electricity customers shop for a new electricity plan:
1. Save Money
For many electricity customers, the biggest reason to switch electricity plans is to save money. It’s simple. A couple of cents a kilowatt-hour may not seem like much, but when you consider how many kilowatt-hours you use every month, those pennies add up on your electric bill. Over the course of a year it can amount to hundreds of dollars in savings.
2. Set a Fixed Rate
Variable electricity rates can be real trouble for electricity customers in months when price fluctuation is dramatic. If you’ve ever received an electricity bill that was unusually high, it was probably due to variable rate pricing combined with high usage. Often, customers switch to simply lock in a specific rate if they feel that the rates may increase in the future. This also helps smooth out those highs and lows and create a more predictable electricity bill. Both fixed rate and variable rate electricity plans are available, so read each plan carefully before committing. See Understanding Electricity Plan Types: Fixed, Variable, and Indexed for more information.
3. Choose Green Energy
Many electricity customers are looking for more ways to reduce their carbon footprint. With the ability to select your own electricity plan, you have more control over how much of your electricity comes from cleaner sources like solar and wind. When you’re shopping for electricity plans, you can see how much of the electricity you’re buying is produced with renewable sources. Some plans guarantee as much as 100 percent of the electricity they provide will be green.
4. Customer Incentives
Electricity providers commonly offer incentives for switching electricity plans. Many electricity providers offer introductory rates for new customers as well as preferred rates for veterans and active military personnel. In exchange for signing a long-term contract with an electricity company, the customer may receive additional incentives such as prepaid gift cards, loyalty rewards like cash-back bonuses, smart thermostats, airline travel miles, and memberships into travel clubs. Make sure to ask about incentives before committing to a plan.
5. Improve Customer Service
Many electricity providers are well known for their excellent customer service. If you’ve had a bad experience with your current provider, it may be worth exploring new providers to get a better customer service experience. Since electricity providers are very competitive and customer complaints are reported to their state’s Public Utility Commission, they have a vested interest in providing top-notch service.
If I Switch to a New Electricity Provider Will I Lose Electricity?
Many electricity customers worry that there may be a period where they have no electricity if they choose to switch to an electricity plan through another electricity provider. This fear is unfounded, fortunately. In states with deregulated electricity, the utility company is still under an obligation to bring electricity to your home unless your power is disconnected for non-payment.
The only difference when you switch electricity providers is in the local electric utility’s bookkeeping and where it receives its power on your behalf. Your local utility will continue to be responsible for your power lines and utility poles, and will be the company you’ll call if there’s a disruption in your electricity service. Nothing will change except your costs and possibly the quality of customer service you receive (for the better). See our post on the differences between electricity providers and electric utilities for more information.
If you live in an electricity deregulated state, it’s a good idea to compare rates regularly to ensure you’re still getting the best deal. In addition to a better electricity rate, incentive programs, green energy, and predictable long term fixed-rates are also good reasons to consider switching electricity plans.