How do you shop for electricity, and can you switch your electric company? I'll walk you through how to switch electricity providers to get a lower costing plan, using the easiest methods available.
A few years ago while trying to figure out how to switch electricity providers, I gave up.
By “giving up”, I mean I attempted to sift through a hundred other offers and find an alternative after learning that our current electricity provider was charging me for not using enough electricity (a common charge, by the way).
And it was a disaster.
There were average prices, base rates, and enough types of fees to make me want to go running back to my overpriced plan for another year.
I don't want you to go through the same experience, especially since I've learned so much about choosing new electricity providers and can help you through the mess.
But first up? Let's see if you CAN switch your electricity provider.
Can I Change Electric Companies (Can I Switch Power Companies)?
The only way that you can change electric companies is if you live in what's called a deregulated market.
The following states have deregulated markets:
Hint: not every area in the state that is deregulated, is deregulated. For example, Texas is only 85% deregulated, so you may still live in an area that is regulated, meaning you can't choose the electric company you want.
- New Hampshire
- New Jersey
- Washington DC
You'll need to verify if your particular area is in a deregulated market, and you can do that using one of the methods below (just insert your zip code into one of the energy websites in the next section).
How Do I Switch Energy Providers?
So, you're in a deregulated market. Awesome! You now have the power to choose which energy provider you want, and within each company, which plan you want.
While it's a really nice option to have, it can also be an overwhelming experience to go through.
Let me break down how to switch energy providers, as well as give you the tools to make it much simpler than when I went through the process several years ago.
Step #1: Find Out if You're in a Deregulated Market – Can You Switch Electric Companies?
As discussed above, you can't switch electric companies unless you're in a deregulated market.
You can verify if your zip code is in a deregulated market by entering it into any of the Step #3 websites you choose to use below.
Step #2: Gather Your Current Electric Plan Information
In order for you to shop around for a better deal — and actually save money — you need to know what your current electric plan looks like.
You'll want to:
- Grab an actual electric bill (either a paper one, or access one online – this will be good, as you can see multiple months instead of just one)
- Highlight or underline the fine print where it states how much you're paying for your current plan
In order to compare your current plan with potential new ones, you'll need to know:
- Your energy charge (for example, 8.5¢/kWh)
- Your base charge (if any)
- Any other charges that are passed through to you
- Your average usage (yes, it matters when you're pricing plans, as plans charge different prices based on usage — you don't want to get a price estimate that isn't going to actually be the price YOU get because your usage is different!)
Hint: Your “average price per kWh” is really the energy charge + the base charge + any other charges, divided by your total energy usage for the month. This number is a bundle, so it's best to know what specific charges go into the average price per kWh when you shop around.
Step #3: Choose a Website to Shop Around
Things have really changed from several years ago. When I first attempted to shop around for electricity plans and how to change electricity providers, there was only one way to do it — using the state-run PowertoChoose.org.
While this option is still available, it's not really the most efficient use of your time.
There are multiple tools that make this part of the process wayyyyy easier than it was before. Let me outline each tool for you, and what using them looks like.
Tool #1: Electric Choice
Electric Market: Nationwide
This option is nationwide. So, no matter which of the deregulated markets you're in, you'll find plan choices using this tool.
Once you input your zip code, you'll want to Select your average monthly usage in the lefthand sidebar to see accurate rates (the kilowatt hours start from 500 and go up to 10,000 kWh, in increments of 500 kWh).
You can further refine your search based on if you want a fixed or variable plan, if you want to just see specific providers, and by contract term length (of between month-to-month all the way up to 2+ years).
Tool #2: ComparePower.com
Electric Market: Texas
This is a free service, where you can cut through a lot of the information overload to get to the plan that will save you money, based off of your personal usage.
That's right — your personal usage matters in terms of pricing (a lot). Your monthly electricity usage varies drastically throughout the year. The average home uses drastically more energy in the hot summer or the cold winter months than during the fall or spring months.
Competitive retailers offer low pricing (known as teaser rates) at the commonly searched usages of 500, 1000, and 2000 kWh, but charge a different (many times higher) rate if your usage falls outside of those commonly searched usage points.
Additionally, some energy plans offer discounts known as bill credits if a certain amount of energy is used each month.
Finding your best plan requires reading the Electricity Facts Label (EFL) and calculating and comparing the total cost for the plan across all 12 months of the year or as many months as you have historical usage data.
Comparing the total cost of the plan for the entire year takes into account the summer/winter highs as well as the spring/fall lows and applies the appropriate rate and discounts for each month’s usage.
Savvy energy shoppers in Texas will read the pricing terms in the EFL for each plan they are comparing and make an excel spreadsheet that computes the monthly costs for all usages. They then add up the costs for each month to compare the total cost of ownership for the entire year. With hundreds of plans to compare this math can take hours upon hours of time.
ComparePower does the math for you. All you need is your usage history. Spending 10 minutes to get these 12 numbers can save you a considerable amount of money on your energy bill over the course of a year. No spreadsheets required.
You can search for plans based on one of their pre-set kilowatt usages (such as 500, 1,000, 0r 2,000 kWh), OR, to get the best rate you can get a few of your past bills and enter your historical usage month by month on ComparePower.com. Your usage history is also available on your current providers online account.
Then — and this is brilliant — they will break down the total price you're going to pay for each of the plans listed, based on your usage.
WOW do I wish something like this had been around when I tried to figure out how to switch electricity providers on my own all those years ago!
When I input my zip code, I'm given two choices:
- Look at all the 29 plans available for my area.
- Use their guide to help me figure out the cheapest one (that seems like the best option, right?).
I answered just a few quick, easy questions (like whether I'm moving in, or want to switch, and if it's a home or apartment), and they came back with their number 1 pick plan for me.
But you know what? I don't have to take what they say at face value, or use the company they think is best; because you can scroll down on that same page and see a comparison of what you'll pay — based on your usage — for each of the other plans.
When I do choose the right plan for me (after quickly looking at the snapshots of pricing and such)? The number to call them is right there (or you can click a button to sign up online).
Hint: if you have your usage history for each of the months in the last year, you can also click “shop prices based on usage history”, and then input each of your last 12 months' usage. It will then show you what you would have paid in each month, for EACH plan. How's that for empowering information! I'll probably do this option, as I geek out on this sort of thing.
Tool #3: RealSimpleEnergy.com
Electric Market: Houston, greater DFW, Waco, Temple, and Midland
You have another option for shopping around in the Texas market, and that's RealSimpleEnergy.com.
But Real Simple Energy actually offers more than that — they'll manage your whole electric bill for you (from shopping around, to renewing, to switching).
- They handle the sign-up process with your new electricity provider.
- They check for bill accuracy, monthly (before you pay).
- They monitor your plan's expiration date, and then give you new plan recommendations based on your actual usage history.
- They handle switching energy providers at the end of your contract (if you want to switch).
After expiration? Your rates will typically go WAY up – that's how the electricity providers finally make money. Think 20-30%! Not only that, but they continue to go up the longer you are with a retail energy provider. The only way to avoid these rate increases is to switch at the exact time your contract is renewing.
And let's face it, that's a hassle. But it's also really important to do, because it can save you $20-$30/month (that's an estimated $240-$360/year) by staying on the cheapest plan for you.
Their bill management service and value is two-fold: find the cheapest rate today, and then make sure you always have the cheapest rate by switching at the right time (without you having to do the paperwork).
“Because we are not paid by energy providers (commissions), we have the ability to be completely independent and search for the cheapest rates publicly available. We are only paid by and only work for our customers. Our fee is totally transparent and this transparency instills trust.”
Tool #4: PowertoChoose.org
Electric Market: Texas
This option has some real flaws to it, though it does provide lots of great information for you (that's the thing — it provides an overWHELMING amount of information for you to sift through, that's not entirely accurate anyway because it's not based on your personal usage).
When I searched for my own options, I got 168 plans for my zip code (yes, that's plans — not companies).
- On average, how much electricity do you use? (500, 1,000, 2,000 kWh, or I don't know)
- Which plan types are you interested in? Fixed, variable, or indexed (market rate)
- How long do you want your contract to last?
After filling in this information, my plan results were narrowed down to 58 plans.
That's better…but still pretty overwhelming to sift through.
Electricity Providers by Zip Code
Looking for electricity providers by zip code?
I'll give you three ways to do it, and they're all free.
For the Texas market:
Early Termination Fee Electricity – When Can I Switch Energy Supplier Without Penalty?
I spoke with Trent, from Real Simple Energy, about early termination fees.
Here's some great information about this:
- Every provider has the right to charge whatever termination fee they want.
- There are bigger termination fees the longer the contract.
- Typical termination fees for 6 months are $50-150 and $150-250 for 12-month contracts. $20 for each remaining month on the contract is also a popular structure.
- There is a law in Texas that states if you switch in the 2 weeks prior to your contract expiration date — no matter how long the contract — no early termination fee can be charged.
- By law (this is nationwide), if you move and can show proof, you cannot be charged an early termination fee.
- All of these laws will vary state by state according to the local public utility commission. For example, in Connecticut, the maximum early termination fee a company can charge is $50.
How Long Does it Take to Switch Electric Providers?
I spoke with Enri, from ComparePower, about how long it takes to switch electric providers.
“The switch happens in the background and is not immediate. Typically it happens within 1-3 days of the date requested, depending on the utility and providers involved. There is some communication that happens between providers and the utility company that takes a few days.
During a switch request, the power remains on. Your new energy provider will notify the utility company as well as your current provider of the switch request. This is all done remotely, and there is no physical pipe changes, meter changes or home visits required.
Once the request to switch is accepted you then receive a final bill from your old provider and a new bill from your new provider on the next billing cycle. Your utility company will also send over a postcard confirming your request to switch providers.”
Switch Electric Companies, No Deposit
Are you looking to switch electric companies, but you're worried about having to pay a deposit?
Most, if not all, electric companies will run a credit check on you. They want to make sure you're capable of paying for the services you use.
And that credit check will determine if you're able to get a no-deposit electric plan (like a month to month electricity – no deposit), or if you'll have to pay a deposit when switching electric companies.
But you can find electricity companies with no deposit. You can search here to find no-deposit plans, only:
Note: ComparePower offers a unique solution. Simply enroll for the plan of your choice on ComparePower.com. If you are asked to pay a deposit, they will automatically check other providers for their deposit requirements without you having to spend hours looking for a no-deposit plan. This will save you a lot of time and hassle searching for options. Apply once and see all your options instantly.
- ComparePower.com No Deposit Plans (click on “No-Deposit Electricity” at the top)
- Electric Choice No Deposit Plans
Both of these sites will show you electricity providers in Texas – no deposit.
Denied an electric plan based on your credit (or other reason), or the company is making you pay a deposit? You should know your rights. According to the FTC,
“You have the right to know why the utility company denied you service, required you to pay a deposit, or asked you to provide a letter of guarantee (if you refused to accept those terms). Within 30 days of its decision, the company must send you notice stating the specific reasons or advising you of your right to get those reasons. You must submit your request in writing within 60 days of the company’s decision on your application.”
Can I Switch Electric Companies if I Owe Money?
No, you cannot switch electric companies if you owe money.
Have you ever heard of a Switch Hold?
A switch hold is placed on a residence where someone has owes money on their electric bill (to a retail energy provider). This could be for any company
If your residence has a switch hold placed on it (even if you don't know, or you weren't the person who racked up the electric charges), then your new electric plan order can get cancelled, before it even gets installed.
Note: are you trying to move into a new residence, and found out there's a switch hold on that address? You can get this removed, and likely without having to pay the charge yourself. You'll need to show proof of new occupancy, or move-in proof, and you'll likely have to show some of this other information:
- A copy of your new signed lease agreement (in the name of the person who is trying to get an electric plan)
- A notarized Affidavit from your landlord (if renting)
- A copy of your closing documents (if you just purchased the residence)
- A New Occupied Statement
You'll want to google the name of the company you're trying to switch to (or get a new electric plan from), plus “get switch hold removed”, and you'll see their instructions to follow.
💡Switching Electricity Companies – Texas
Are you switching electricity companies in Texas? As mentioned above, you want to do your search on sites just in the Texas market — they know the market the best.
Here are your options to switch electric providers – Texas: