Although the process of switching electric service providers is extremely easy, it’s anything but simple… Here Let’s take a look are some of the things you need to think about.
What type of electricity user are you?
Are you an owner or property manager for a multi-family residential building? Are you a small business owner? Do you own a factory or data center? Are you a homeowner?
Chances are that if you are using and paying for electricity from the utility, you might be able to benefit from switching to an alternative retail electric supplier. And if you’ve already switched, maybe you feel like you could be getting a better deal?
Deregulated Electricity Markets
If you’re fortunate enough to reside in a state that has deregulated its electricity market, you probably have the option to switch your electric service over to an alternative retail electricity supplier (ARES). Why would you want to? Because doing so at the right time with the right supplier can significantly reduce your monthly energy costs.
Here’s how deregulation works: A deregulated electricity market creates a market environment that allows for competition. Basically, electricity suppliers are able to compete to provide the most competitive rates and terms to attract and maintain their customer base. Because of competition, the results typically lead to lower electricity rates and a wider range of choices for consumers.
Switching suppliers is seamless. That means that there is no interruption of service; in most cases, there is no additional equipment to install. But even if so, the savings from switching still outweigh the cost of any installation. There are no changes regarding maintenance, distribution or transmission. All that changes is the name on the bill. It’s actually easier than switching to a different mobile phone carrier.
Other Benefits for Customers in deregulated electricity markets:
- Customers can sign electric agreements that provide greater price protection –The best option being a long-term fixed rate.
- Customers may have access to a wider range of service options.
- Customers have the ability to incorporate/request that a renewable component be integrated into the price.
- Customers may be able to choose whether a portion of their electricity comes from clean renewable fuel sources instead of a fossil-fuel burning power plant.
Choosing a Supplier
The difference between regulated and deregulated electricity markets is the ability to choose. Customers in a deregulated market have the power to choose to buy their electricity commodity via the utility or through any number of available retail competitors. Customers in states with no deregulation are stuck, for better or worse, with purchasing their electricity from the utility.
While deregulated electricity markets have many benefits, there are also many challenges and potential pitfalls with suppliers trying to take advantage of unwary customers through deceptive techniques. Ever heard of slamming? It involves illegally switching a customer’s electric service without their consent. Or what about alluring promotional sales incentives that are not what they seem and actually trick customers into excessively expensive agreements? It’s easy to tell someone to watch out for hidden fees. But there’s a reason they’re called ‘hidden’. They’re often hard to find in all of the fine print. There may be penalties from terminating an agreement early, too.
Ultimately, if you’re not careful, you could end up paying a lot more than you expect!
The value of an energy consultant
The deregulated retail electricity market is like a big labyrinth and a good energy consultant is like a guide with a map and a compass that will show you the way through the maze.
The only certainty facing the power industry is that electricity rates are going to continue to rise. And customers who continue to purchase their electricity from the utility will not have any opportunities to hedge against the rising rates.
Even customers who purchase their electricity from an ARES are going to experience rate increases in the future. But, if their timing is right and they truly know and understand all the fine print in the ARES’ contract agreement, they can save a great deal of money on their electricity bills over time.
But, the problem is that the retail electricity market is highly complex and requires a lot of time and attention to stay on top of the market trends. The complexities of this market are riddled with confusing acronyms and industry-specific jargon. And in deregulated markets where suppliers are competing against each other to win their customers’ business, a lot of unwary customers stand to lose as they are caught in the crossfire.
Energy consultants know which rates are the most competitively priced and which service options and contract terms are the best suited to your needs. They can do a true apples-to-apples comparison to select the best option.
So, whether you know the market or not, good consultants can help you understand the many factors which affect energy prices. Part of their job is to help make certain that you are getting the services and options you want at the most competitive rate available. They also keep track of your bills and watch closely for billing errors and hidden fees.
Choosing a Qualified Consultant
There are a lot of people who claim to be qualified energy consultants, but how do you know for sure if she/he is actually qualified? How do you know if they’re unbiased (i.e. – not working on behalf a specific supplier to earn a commission)? How can you be certain they know what they’re doing?
Good energy consultants don’t just shop for the lowest electric price…
…The Energy Consultants at AUS don’t just shop for the lowest electric price. They work with you to develop an entire holistic energy management strategy. In fact, getting multiple competitive bids is actually one of the very final steps in a holistic energy procurement process.
So, if you think you’re ready to switch electricity suppliers, seek out a fully qualified, licensed and experienced energy consultant to guide you through the process.