Advertisement
real estate

Lower Your Electricity Bill by Switching Providers

On average, consumers in states that let you choose among suppliers save the equivalent of one month's bill in the first year after switching.

I often get offers in the mail about switching electricity providers. How do I assess whether these companies offer a better deal than my local utility? --J.L., Silver Spring, Md.

Many states passed legislation in the late 1990s and the 2000s deregulating energy companies, opening the door to competition among electricity and natural gas suppliers. In about one-third of the states, you can shop suppliers to get the best deal. Your local utility still delivers the energy to your home, sends you the bill and handles power outages. On average, consumers in states that let you choose among suppliers save the equivalent of one month’s bill in the first year after switching, says Phil Croskey, CEO of PointClickSwitch.com, which compares suppliers in seven states.

Advertisement - Article continues below

Most state public utility commissions make it easy to compare rates (www.naruc.org/commissions). Texas, Ohio and Maryland, for example, have tools that show the price per kilowatt-hour from the suppliers in your area and specify whether the rate is fixed or variable, the duration of the term, any cancellation fee, incentives (such as a small sign-up bonus), and the estimated monthly charge based on your energy usage (look at your old bills for the number of kilowatt-hours you use). Most states also show the number of complaints lodged against suppliers.

Be mindful that variable rates can change daily or monthly based on market conditions and can spike during a frigid winter or a hot summer; you’re probably better off sticking with a fixed rate, says Terry Hadley, of the Texas public utility commission. Croskey recommends comparing your current rate with those of other suppliers at the beginning of every season. You can switch at any time, although you might incur a fee. The new supplier can make the change.

Advertisement
Advertisement

Most Popular

7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020
Retired? Good Luck Getting a Mortgage, Even If You’re Wealthy
mortgages

Retired? Good Luck Getting a Mortgage, Even If You’re Wealthy

One 70-year-old’s story highlights the challenges. Prepare for more paperwork and hoops to jump through than you could imagine.
August 2, 2020
Turning 60 in 2020? Expect Lower Social Security Benefits
Coronavirus and Your Money

Turning 60 in 2020? Expect Lower Social Security Benefits

When you file for Social Security, the amount you receive may be lower.
July 30, 2020

Recommended

6 Money-Smart Ways to Spend Your Stimulus Check
Tax Breaks

6 Money-Smart Ways to Spend Your Stimulus Check

If you don't have to use your stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
July 30, 2020
Emergency Funds: How to Get Started
Making Your Money Last

Emergency Funds: How to Get Started

There’s no one-size-fits-all formula for how much you’ll need.
July 30, 2020
The Finances of Homeschooling Your Kids: What It Costs, Tax Breaks, More
spending

The Finances of Homeschooling Your Kids: What It Costs, Tax Breaks, More

If you're contemplating homeschooling for the 2020-2021 school year and beyond, consider these 10 things -- from surprising homeschooling costs to pot…
July 30, 2020
Would You Pack Your Lunch for $1.2 Million?
how to save money

Would You Pack Your Lunch for $1.2 Million?

Buying lunch every workday might cost you a lot more than you think in retirement savings over the course of your career.
July 22, 2020