As a consumer, you should always look for the best deal on the market. Whether it be for groceries or for electricity, there is always a way to find the best deal and save the maximum amount of money. In order to find the best deal, you need to know the difference between an energy supplier and a utility company. Once you learn this, you will be equipped with all the information you need to get the best bang for your buck.

ENERGY PROVIDERS VS UTILITIES: WHAT’S THE DIFFERENCE?

People are always looking to find ways to cut down on their monthly fixed expenses. One way to do so, particularly in a deregulated energy market, is to research energy providers in your area to find the best rate and terms for your budget. Do you understand how your electricity is delivered to your home? In taking the steps to learn about this process, you will be able to differentiate retail energy providers and utilities. Once you understand how these two work together, your knowledge of the retail energy market will put you well on your way to getting the best deal on an electricity plan.

ENERGY PROVIDERS VS. UTILITY COMPANIES

Utilities and energy providers work hand in hand to provide residential, commercial, and industrial customers with electricity. Whether you live in a regulated or deregulated energy market, it is important to understand the difference between these two energy companies, how they deliver electricity to your home, and how to take advantage of a competitive marketplace in order to get the best rate for your electricity plan.

What are Utility Companies?

There are over 3,300 utility companies in the United States who provide electricity or electricity and natural gas. These electrical utility companies are entities responsible for generating and distributing electricity to homes and businesses throughout their region. They also own the wires and power lines that distribute electricity.

 

The process of passing along power starts at a power plant, where a generator creates electricity. The electricity is transmitted to substations, where transformers change the energy into high voltages to move longer distances through power lines. Then the electricity is distributed through power lines to homes and businesses. Once the electricity is distributed, it can be consumed in several ways, from flipping a light switch to doing a load of laundry.

 

In addition to controlling generation and distribution of electricity, utilities are responsible for maintaining and repairing methods for transporting it. In the event of a large power outage or downed power lines, the utility company must remedy the situation. Another important responsibility of utilities are to read customer’s electric meters monthly and note kilowatt usage over that time span.Additionally, it is utilities that read electric meters each month and note consumer usage over the span.

 

How to Distinguish a Utilities from Energy Providers

Simply put, utility companies are the ones who own and operate the way electricity is transmitted to homes and businesses, providing a constant supply of energy and handling emergency situations like power outages. Utility companies take care of everything related to the service of your energy and its distribution to your home.

 

Everyone that consumes energy relies on utility services. As a result, almost every person in the United States depends on a utility company, even if they don’t fully understand what a utility company is. In a regulated market, consumers solely rely on utilities to provide their electricity, but this is not the case in some areas. When that occurs, residents and businesses reside within a deregulated market, giving consumers more choices as to how they would like to receive their service. These choices come from energy suppliers, or providers.

What are Energy Providers?

Energy providers are a middle man between companies that generate electricity and the consumer. In regulated markets, utility companies are the sole owners of electricity generators, but in deregulated markets, energy providers may own them as well. Ultimately, energy providers are responsible for setting the rate and contract term of the electricity that the utility company (or themselves) provide. Energy providers do many things for the consumer, including but not limited to:

• Buy electricity at wholesale value
• Sell electricity to the customer at a competitive rate
• Serve as the direct contact with the customer for electric service issues
• Bill the customer
• Provide customer service

 

Energy providers create a competitive electric market, and enable customers to find better deals with a broader scope of plans that are geared towards savings. Utilities offer a fixed rate that is often unavoidable, but energy providers allow consumers the flexibility to select their plan and rate.

 

It is important to note that if you are in a deregulated market and work through an energy provider, the utility or generator companies are still the ones to call in the event of an emergency, whether it be a power outage or downed power line.

Steps on Getting the Best Rate From an Energy Provider

With a better understanding of how electricity is delivered to homes, you can take the next steps in finding the best deal on an energy plan. First, you can determine if you are in a regulated or deregulated market. The options for those living in a regulated market will be more limited, while those who live in a deregulated market will have several options.

 

It is important for people to research the various plans and companies that are accessible within their area. Simply go to a website that compares energy rates and enter your zip code. In deregulated electricity markets, these companies offer competitive deals and rates meant to compete with other providers and entice consumers to sign up. Getting a better grasp on the breath of available electricity rates in their area will give them the ability to negotiate a better deal from their current provider or switch to a provider that has better rates.

 

Some companies may be accommodating and outline different ways they can help you to save while others may be less willing to adjust the terms of your service. At that point you will be armed with valuable information on the various options you have at your disposal, allowing you to make an educated switch from one energy provider to another.