In 13 states and the District of Columbia, the energy market is deregulated, which means you have the option to choose a new energy provider — and five more states offer that option in specific regions, as CNET recently detailed.
In some states, the energy market is regulated, which means your provider is pre-assigned. But if you're one of the many Americans who has your choice of energy providers, here's what you need to know to make a decision.
Which states have deregulated markets?
According to CNET, the following states and D.C. have fully deregulated markets wherein you can choose your own energy provider:
• Connecticut
• Delaware
• Illinois
• Maine
• Maryland
• Massachusetts
• New Hampshire
• New Jersey
• New York
• Ohio
• Pennsylvania
• Rhode Island
• Texas
You can choose your own energy provider in some, but not all, areas of California, Georgia, Michigan, Oregon, and Virginia.
Why should I make a change?
When asked whether deregulation makes energy cheaper, expert Joshua Basseches of Tulane University told CNET, "It's unclear on a systematic level whether deregulation has actually led to decreases in electricity rates, and that's because there's so many factors, including things like what's going on in Ukraine and the rate-making process."
However, while being in a deregulated state doesn't guarantee that you'll pay less for energy than those in neighboring states, it does mean you have the opportunity to shop around for the best deal available. You can end up saving a lot of money each year by making a switch if you do it right.
Also, different energy providers, and different plans from each provider, may draw energy from different sources. Some of those sources are eco-friendly ones, including solar and wind, which create less pollution and contribute less to the planet's rising temperature. Many people change providers or plans for moral reasons (and sometimes find that these sources are more affordable, too).
In some cases, renewable energy-based electricity providers can cost more, as the technology is comparatively newer, though CNET has reported that renewable energy prices have been getting cheaper. Many residents still opt for a fully green energy provider even when the cost per kilowatt is a bit higher — this way they know their home's electricity is not directly contributing to the burning of dirty fossil fuels into the air.
What should I watch out for?
CNET outlines five different types of energy plans you may encounter: fixed-rate plans that lock in your price for a certain time period, variable-rate plans in which prices rise or fall with the market, time-of-use plans wherein your costs depend on the time of day or day of the week that you use the energy, prepaid plans in which you put money into your energy account in advance, and green energy plans that guarantee a certain amount of the energy you use will come from renewable sources.
You can decide what's best for you based on your energy usage, need for stability or flexibility, and ideals.
One thing to be aware of is energy scams, which come in many forms. Your state's public utility commission is your best source for information about providers as well as what scams have been spotted in your area, CNET says.
You can also find local deals through SaveOnEnergy. This organization has a free tool for people in deregulated markets to compare energy plans. It takes into account both the price and source of the energy, so you can look for the cheapest and greenest plan all in one place.
Join our free newsletter for easy tips to save more, waste less, and help yourself while helping the planet.
