First, it is important to understand the logistics behind the drop notification you just received from your supplier or broker. When a supplier enrolls a new customer for electric or natural gas supply service, the “switch” is initiated by the customer’s local utility company. In fact, this is how it works:
1. Supplier Notifies the Utility
When a customer signs a supply agreement with a retail provider, the supplier notifies their local utility of the specific utility accounts it will be supplying, and when that supply will commence.
2. Utility Makes the Switch
Next, after the utility receives the requests from the supplier, it initiates the “supplier switch” for the customer’s utility accounts. Whether the customer is currently on utility default supply or with another supplier does not matter. Once the utility receives the switch request, it puts through the order.
Note: If the customer decides to move away from a supplier and back to utility default service, then the same switch occurs. In this case, the switch is from a supplier to a utility.
3. Drop Notification
If the customer was getting service from another supplier prior to switching, then the previous supplier will receive a drop notification from the utility company. The drop notification indicates the specific utility accounts that are being switched to a new supplier, or back to the local utility. This poses a threat to suppliers, brokers, and customers if the customer is still under contract with that supplier.