What You Need To Know About Switching Energy Suppliers

Want to switch energy supplier terms? Enrolling with a new energy supplier could prove to be beneficial financially for your home or business. However, there is a lot to keep in mind when signing up with a new power supplier. This article outlines everything you need to know about switching energy plans, understanding new energy supplier contract terms, and what to expect when you switch.

Can I Switch Electric Companies For My Business?

Are You Located In A Deregulated State?

Only businesses located in a deregulated energy state have the opportunity to switch energy suppliers for their business. In regulated states, the local public utility is the main provider. Businesses in these regulated states cannot switch to a third-party supplier; however, through utility bill audits, they can determine if a less expensive tariff schedule might be applicable to them. For those located in deregulated states, they have the opportunity to negotiate terms, rate plans, and other contract elements with suppliers in an effort to save money. These businesses must have carefully planned energy procurement strategies in order to effectively purchase energy below the local utility’s price to compare. Many elect to hire the services of an energy broker or energy brokerage firm to negotiate with suppliers on their behalf. 

If you are not located in a deregulated energy state, then you are obligated to get your energy supply from the local utility company. If you happen to live or own a business in one of the listed deregulated states, then you are in luck. Customers in these states can choose their energy supplier and have the opportunity to take advantage of lower energy prices to save money. If you are unsure whether your electric or natural gas utility supports energy deregulation, then check with an energy broker who can answer your questions.

Electricity vs. Gas Suppliers

While there are several states with deregulated electricity and natural gas utilities, such as Connecticut, Delaware, Illinois, Maine, Maryland, New Hampshire, New Jersey, New York, Ohio, and Pennsylvania, some states are only deregulated for a single commodity. If you are located in a state that only has natural gas deregulation, such as Georgia or Florida, you might want to consider the business case for converting inefficient electricity appliances into natural gas. This not only might be able to save you money on your energy consumption, but you could now have the opportunity to shop for lower gas rates.

It’s best to consult with an experienced energy professional before making any drastic decisions. A reputable energy broker can help you evaluate your business energy consumption, forecast costs, and help you make informed decisions regarding your energy spend.

When Can You Switch?

If you are ready to choose a new energy plan or supplier, there are some things you need to consider when switching. If you happen to be on the utility default supply rate for your electricity or natural gas, then signing up with a supplier is easy. Because utility default rates do not have energy contracts, you are free to sign up at any time. If you are currently with a supplier, however, you must be cognizant of your current contract expiration date. Renewing your energy contract might seem simple, but you need to make sure that you time your new contract’s start date appropriately so you do not get hit with any early termination fees. In this scenario, you must switch to a new energy supplier by having your new contract begin at or after the expiration date of your current agreement.

How Long Does The Process Take?

When you finally decide to switch energy supplier, the process is quite simple. In order to enroll with your new provider, you typically have a few options: an online enrollment, a paper contract (or eSign), or a telephone enrollment. Once you have agreed to the terms and conditions of your new contract, the rest happens behind the scenes.

When the energy supplier receives your signed contract, they submit the enrollment request to your local utility company on or around the contract start date. The utility company then reassings the supply portion of your electric bill to your new supplier so the billing process can begin. Once you enroll with a new energy supplier, it can take one to two billing cycles after your contract has begun for the new supplier charges to appear on your bill.

Is Switching Suppliers Worth It?

In many cases, yes. Energy suppliers typically offer lower rates and deals for new customers. So, if your agreement is ending with one supplier, you may be able to find a lower rate from a different supplier. Now, keep in mind that many customers who switch experience problems with energy suppliers. That’s why it’s imperative that you hire an energy broker to negotiate with suppliers on your behalf. A professional energy broker knows the ins and outs of the industry and has relationships with suppliers that can benefit you and your business.

Signs You Need To Switch Energy Suppliers

There are many key indicators that it’s time to switch suppliers. It could stem from problems with your existing supplier or maybe there are better offers available in the market from other companies. Either way, here are some things to watch out for that will let you know it’s time to make a move:

• You’ve Been Overbilled: If your current supplier isn’t living up to their end of the contract, it’s time to leave. In some unusual circumstances, suppliers will not charge the agreed-upon price on the energy contract. If you are experiencing hidden charges on your energy bills, you may also benefit from a utility bill audit.

• Your Contract Expired: If your fixed-rate contract has expired, chances are the supplier is charging you a very high, variable rate. These rates are typically billed on a month-to-month basis. If you noticed a big spike in your energy bills, your fixed rate may have expired. It’s time to switch!

• Lower Rates Are Available: Sometimes market prices drop and lower energy plan offers are available. If this is the case, it could be time to switch to a lower rate and save. Now, if you are under contract, be sure to read the terms carefully so you do not leave too early and get charged a penalty for exiting.

Switching From One Supplier To Another

If you are simply renewing your contract with your existing supplier, then it’s quite simple. However, when you decide to switch from one supplier to another there are many variables to manage. It’s always best to have an energy professional by your side to help you with the switch. Utilizing the services of an energy brokerage company could prove to be valuable. A broker can ensure that your start date is accurate, and that you do not switch away from your current contract too early. Depending on your meter reading date, some months can get tricky. February in particular is an odd month since it is less than 30 days long. Customers with meter read dates toward the end of the month might not have a reading in February, but will have two in March. Nuances like this can cause problems with your new contract, so having an experienced partner to help is recommended.

Step-by-Step Guide to Switching Electricity or Gas Suppliers

Are you ready to switch to a new energy company? Here are the steps:

Step 1: How to Review Your Current Energy Contract

Review the current terms of your existing energy contract. Look out for early termination fees, the contract end date, and other fees you might incur if you switch to another supplier.

Step 2: Analyze Your Electricity or Gas Usage

Next, use a broker to pull your historical energy usage from the utility company so you can evaluate when and how you use energy. This will help you determine the best plan type for your business so you can save the most money.

Step 3: Compare Energy Supplier Rates and Plans

You then need to evaluate multiple supplier offers. Each supplier will have different pricing models and terms. Since there are over 60 energy suppliers in deregulated markets, it’s best to utilize the services of an energy brokerage firm to do this on your behalf.

Step 4: Select the Best Business Energy Plan

After you’ve determined the best price and plan for your business, you can enroll with that supplier. Some suppliers allow you to enroll your accounts online, while others require a digital or wet signature on an energy contract.

Step 5: Finalize the Switch with No Service Disruption

When the contract is finalized, the supplier will contact your local utility company to initiate the account switch. It’s important to check your bill one month after the contract start date to ensure the correct supplier and rate appear on your bill.

What to Know Before Changing Energy Suppliers

You must be overly cautious when enrolling your utility account with a new supplier. Energy account switches can be complex, so it’s best to follow these tips:

Read The Contract

Read the terms of the contract carefully so you understand the total rate, term, and other nuances such as bandwidth clauses, force majeure clauses, gross receipts taxes, and other items.

Understand The Termination Fees

Most fixed-rate contracts have early termination penalties. Make sure you understand how these are calculated ahead of time so you know what you are getting into.

Watch Out For Hidden Fees

Hidden fees such as transmission adjustments and pass-through charges can be a nightmare later on. It’s important to consult with a professional to ensure you are not signing up for something that is unfavorable to you or your business.

Billing Set Up

Be sure to understand how your new energy supplier will bill you. Some energy companies put their charges on your local utility bill. This is known as utility consolidated billing, or UCB. Others will send a separate bill. It’s important to understand the anatomy of an electric bill so you don’t miss a payment and get billed a late fee.

How Long Does It Take to Switch Energy Suppliers?

Switching energy suppliers is usually a straightforward process, but the exact timeline depends on your utility’s policies and your current contract. In most deregulated markets, the switch itself takes between a few business days and two weeks to process. Most electric utilities offer an accelerated switch period that can be a few business days. Natural gas utilities, however, can take up to one month to perform a supplier switch.

Once you sign a new supply agreement, your chosen supplier will coordinate directly with the local utility to make the change without any service disruption. If your current contract has already expired or is on a month-to-month basis, the transition is often faster. Businesses should always review their current contract terms for renewal windows or early termination clauses, as these can influence when the switch can officially take place.

Common Mistakes to Avoid When Switching

Many businesses make preventable mistakes when switching energy suppliers, which can result in unexpected costs or less-than-optimal agreements. A common pitfall is failing to review the existing contract carefully, overlooking termination fees, automatic renewal clauses, or specific contract end dates. If you switch suppliers too early while under contract with a different supplier, it can result in large penalties.

Another common pitfall is focusing only on the headline price per kWh, without considering the total cost components or hidden fees that can add up significantly. There are many documented instances where customers signed up for “low” rates to later learn they were not inclusive of key components such as capacity and transmission.

Some businesses also rush into short-term deals without evaluating longer-term stability, or they neglect to align new contracts with their broader energy procurement strategy. Avoiding these mistakes ensures that switching delivers true savings and value rather than just a change in paperwork.

FAQs About Switching Energy Suppliers

Does switching suppliers interrupt my service?
No, your local utility still delivers the power or gas through its infrastructure, so there’s no disruption.

Are there fees for switching?
It depends on your existing contract. Some contracts include early termination fees, while others allow you to switch freely after the term ends. Other than termination fees from an existing supplier, there are no other fees to switch.

Can I choose renewable energy through a new supplier?
Yes, many suppliers offer green energy plans backed by Renewable Energy Credits (RECs) or bundled renewable supply options.

Do I need new equipment to switch suppliers?
No, switching suppliers does not require any changes to your meters, wiring, or infrastructure.

How do I know if I’m in a deregulated market?
States like New York, New Jersey, Pennsylvania, Ohio, and Texas allow supplier choice, but each has different rules. Here is a full, updated list of deregulated energy states.

Complete Deregulated State Guide

The following electric and gas utilities are deregulated and allow customers to choose third-party energy suppliers:

Final Tip:

Check to see if your new contract allows for a rescission period. Rescission periods on energy contracts permit you a window of time to cancel the contract without any penalty. Signing up for a contract with a fair rescission window gives you options in case you change your mind.

Need Help Switching Energy Suppliers?

In summary, switching energy contracts can be very beneficial to your pocket but comes with its challenges and risks. It’s always best to use an energy broker who can help you understand the details of your contract, arrange for a smooth switch, and monitor the implementation of your new energy supplier. Diversegy is a nationally licensed energy broker working with thousands of commercial and industrial customers. We aid our customers every day through energy supplier switching and can help you too! Contact one of our energy professionals today to learn more.