How to Buy Electricity

Tips for Consumers & Small Business Owners

The single, most important thing to remember about buying electricity is that you have a choice. Being able to choose your electric provider, in every sense of the word, gives you “power.”

That’s because deregulation is changing the balance of power. Before deregulation, you only had one choice: buy your electricity from a large utility, which generally gives you a one-size-fits-all offer. Now, with deregulation, you have the right to decide to either stay with the large utility or shop for energy savings and energy products that more closely fit your individual needs.

What’s the difference between buying electricity from a large utility or one of its competitors? Not much, really. The same power lines are used to deliver electricity to your home or small business, no matter which company you select to buy your energy from.

Bottom line, when you flip the light switch, the light comes on. What changes is the cost, depending on which company and product you select.

Why are electric prices lower with some companies and higher with others? As in nearly any other business, you can benefit from a company’s ability to buy smart or to fit your individual needs, as well as the company’s willingness to lower its profit margin. Today’s competitive energy companies want your business, and they work hard to create efficiencies that they can pass along to you.

Electricity is priced by the kilowatt hour (kWh), and has two primary components. Your electric bill is divided into distribution charges, which reject the cost of transporting electricity to you over the utility’s distribution system; and energy charges, which include the actual cost of energy used to power your home or business. The energy is available from your utility, or from competitive suppliers like Commerce Energy, which offers a wider variety of energy products and services.

Depending on your utility, your delivery charges and energy charges may be billed separately, or they may be consolidated together onto one bill, provided by either your supplier or local utility.

One way to purchase power is through fixed-rate programs that allow you to lock in a set price per kWh for a period of 12 – 24 months. This type of program takes the volatility and uncertainty out of energy prices, gives peace-of-mind and makes it easier to plan monthly budgets.

Some people are concerned about the reliability of purchasing electricity from someone other than their utility. Will the power stay on? What happens if there is a power failure due to a storm or other mechanical problem?

In the event of a power failure, your utility will still be there to help. They are mandated by public law to maintain the electricity delivery system and repair it when needed. Ground crews have no idea where you buy your electricity from – their job is to keep the grid working properly at all times.

All competitive energy companies offering service need to meet certain standards and be approved by the state public utility commission. Publicly-traded companies, such as Commerce Energy which has been serving customers since 1997, must also abide by U.S. Securities Exchange Commission (SEC) rules.

Look for a company that delivers on its customer-service promise. For example, when you call Commerce Energy, you’re quickly greeted by a trained customer service representative on the other end of the line, ready and willing to help. You should be able to pay less for your electricity and receive even higher-quality customer service.