Where To Buy Electricity [PORTABLE]
When it comes to finding a power supplier for your home, shopping around is often the best way to find the lowest price and the best value. Not everyone has this freedom, however, as deregulation is not the case in all 50 states. Thanks to deregulation, though, many people can choose where to buy their electricity. That means you, the customer, are in control.
where to buy electricity
If you're already under contract with a an electricity supplier, you should review your contract to determine what penalty, if any, exists if you leave that company before your contract expires. In some cases, you could be assessed an expensive early termination fee that nullifies the benefits offered by a new provider. This fee can depend on the length of the contract and how recently you started services.
This is the unit price for the cost of electricity, which is priced by the kilowatt hour (kWh). To add context, the average U.S. household uses 911 kWh per month, though it's important to remember that many factors can increase or decrease your electricity usage. These may include season, the number of family members living in the home, and how many energy-efficient appliances you own.
Before you choose, it's important to understand that you could potentially be doing business with up to two entities to get your electricity.Default utility: This company owns and maintains the power lines and delivers the electricity to all customers in their territory. You can also purchase electricity from this company. In some states, their rates are regulated by the public service commission. In either case, a portion of your payment would go to the default company to pay the transmission fee.
Competitive supplier: These companies sell electricity to customers, often purchasing it from the electricity wholesale market. While they are required to register their business with the public service commission and follow certain requirements, their rates are not regulated.
First, start with your state's public service utility website to find out who your default electric utility is. In most states (except Texas), you will need to sign up here first, since the utility company for your area owns the power lines and delivers the electricity. You can also purchase the electricity from the default utility.
An electric utility, such as Eversource (previously NSTAR) or National Grid, delivers electricity, while a competitive supplier supplies electricity. It might be helpful to think of electricity like the post office delivering a package from a store to your home. The post office delivers the package (like an electric utility delivers electricity), while the package itself is provided by the store (like a competitive supplier supplies electricity).
Competitive suppliers offer fixed and variable rates. A fixed rate remains the same during the length of your contract, which could last for a few months or several years. However, many fixed rate contracts will automatically renew at a variable rate. A variable rate typically changes from month-to-month according to the market and the terms of your agreement with a competitive supplier. The rate for Fixed Basic Service, the electricity supply offered by your electric utility, changes every six months for residential customers.
Be especially wary if your home has central air or you use window air conditioners during the summer, because air conditioning often results in high electricity supply consumption, which could amplify any difference between a year-long rate locked in with the competitive supplier and the lower rates that electric utilities typically offer in the summer months.
Your utility will not send representatives to your door, or call you on the phone to talk about electricity supply rates. If a representative contacts you about electricity supply rates, this person most likely works for a competitive supplier.
You can take advantage of clean, renewable energy by buying "green power" or by making your own electricity with a small home renewable energy system. Learn the purchasing options available in your area, or learn how to plan your own system and choose the right technology for your location and electricity needs. Explore the following topics:
Any electric or gas customer in New Jersey is eligible to shop, but those with higher usage may have an even greater incentive to do so. Commercial and industrial customers with peak loads of 750 kilowatts or more are subject to a retail margin of one-half cent per kilowatthour if they continue to buy their electric supplies from their utility. Those customers with peak loads of 1,000 kilowatts or above are also subject to hourly pricing (i.e. their supply costs change hour-by-hour to reflect the actual cost of generating electricity in that particular time period).
Prior to 2000, your electric utility both generated electricity and delivered it to you on its poles and wires. That year a change in law kept the regulated utility responsible for delivery of electricity (transmission and distribution) but created a deregulated, competitive market for generation. As a result, residential and commercial customers can now choose to buy their electricity from licensed competitive electricity providers (CEPs). Those customers who choose not to shop for their electricity supply receive standard offer service, purchased on their behalf each year by the Maine Public Utilities Commission. The standard offer price changes annually on January 1st.
All of these entities have applied for and received a license from the MPUC to sell electricity. The PUC does monitor CEPs for adherence to license conditions and to other applicable state laws, but CEPs are not regulated the way CMP and Versant and other utilities are.
Although the Maine PUC cannot regulate the price of the electricity offered by competitive suppliers, it has the authority to investigate matters relating to service offered by CEPs. Depending on the offending actions of a CEP, the Commission may revoke a CEP's license, issue cease and desist orders, order restitution and levy administrative fines.
In Rhode Island, a customer can choose to buy electricity from a company other than Rhode Island Energy or Pascoag Utility District. This is known as customer choice and the other company is known as a nonregulated power producer or competitive supplier. See below for more information on electric competitive supply and third-party suppliers.
Remember, regardless of who you buy your electricity from, you will continue to call your electric utility for outages, emergency services and questions about your service. If you have questions about choosing a competitive energy supplier, please contact the NH Department of Energy at 1-800-852-3793 or at energy-info@energy.nh.gov.
In the United States, how electricity is bought and sold varies by region. While many cities are served by municipally owned utilities and some rural areas are served by customer-owned rural cooperatives, most electricity customers are served by utilities that are owned by investors. These investor-owned electric utilities can be either regulated and operate as vertically integrated monopolies with oversight from public utility commissions, or they can operate in deregulated markets where electric energy prices are set by the market with some federal oversight of wholesale market operations. These regulatory constructs determine how retail and wholesale electricity prices are set and how power plants are procured. This explainer discusses the different types of US electricity markets, how they are regulated, and implications for the future given ongoing changes in the electricity sector.
This explainer is part of RFF's Future of Power Explainer Series, which outlines the fundamentals of electricity markets and policy to convey how electricity systems function today and how they may evolve in the future with decarbonization efforts.
Prior to the 1990s, most investor-owned electric utilities were regulated and vertically integrated, which means the utilities owned electricity generators and power lines (distribution and transmission lines). Today, only one third of US electricity demand is serviced by these integrated utility markets because many states have abandoned this system in favor of deregulation.
Regulated utilities must also seek state approval for power plant investments. Vertically integrated utilities decide which generators to build and then recover the costs of these investments through electricity rates. Many state regulators require utilities to demonstrate the necessity of proposed investments through an integrated resource planning (IRP) process. This process is used for long-term planning and requires each utility to justify its investment and demonstrate how it plans to meet customer electricity demand. Notably, under this structure, customers bear the risk of investments because utilities can recover their costs through rates, regardless of how the power plant performs (for example, South Carolina electricity customers paid for nuclear plants that were never constructed).
Even though vertically integrated utilities generate their own electricity, many trade with other utilities during times of need. For example, during certain times of the year it may be cheaper for some utilities to purchase excess hydroelectric power from others rather than generate power using their own facilities. This type of wholesale bilateral trading is especially common in the western and southeastern United States where most utilities are still regulated. These wholesale market transactions are subject to regulation by the Federal Energy Regulatory Commission (FERC).
Beginning in the 1990s, many US states decided to deregulate their electricity systems to create competition and lower costs. This transition, known as restructuring, required electric utilities to sell their generating assets and led to the creation of independent energy suppliers that owned generators. Because each new independent energy supplier could not cost-effectively create their own power line infrastructure, electric utilities held onto these assets and became transmission and distribution utilities, which continue to be regulated. 041b061a72