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.
First Things First, Can You Switch?
First, you need to know if your account is even eligible to switch to an energy provider. 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.
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.
How To Switch
Are you ready to switch to a new energy company? Here are the steps:
- Find the best energy deal for you home or business (pro tip: use a broker)
- Learn how to enroll with the supplier (paper contract, online, etc.)
- Read the terms and conditions of the new contract carefully
- Sign your new agreement
- Wait for the utility to enroll your account and notify you (via mail)
- Check the charges on your bill to ensure that they match your contract
- Take note of your contract end date so you don’t forget to renew
What To Watch Out For
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.
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.