A great way to save money on your electricity bill is to cut down on how much energy you use. Unplug all the unused appliances. Turn your AC to the highest possible bearable setting. Make sure your house is weather-proof.
But there gets to be a point when you’ve unplugged every appliance and kept the AC as low as possible.
And your electricity bill is still too high.
What is one to do? Well, if you live in a deregulated state, you can shop around. You can cut your cost per kilowatt hour (kWh) and save money on electricity without unplugging anything.
What does it mean to have a deregulated electricity market?
In states where the electricity market is deregulated for residential accounts, you can shop around for who generates your electricity.
The company that delivers your energy — and issues your monthly bill — will remain the same. It’s just that you’ll get to dictate who you’re buying the energy from.
Some of the companies that generate electricity can save you money on your electricity bill by charging a lower price per kWh than the company that delivers your electricity.
States with Deregulated Electric Utilities
You can shop around for your electricity provider as a residential customer in these states:
- New Hampshire
- New Jersey
- New York
- Rhode Island
The District of Columbia also has a deregulated electric market.
Things to Watch Out For
When you pull up your state’s online market, you’ll likely be asked for your zip code and average energy usage. You’ll then see a list of different providers offering service at different price per kWh.
That doesn’t mean you should select the contract with the lowest price per kWh, though. There are some things to look out for.
Short-term contracts tend to offer great rates, but those rates are more likely to skyrocket after your initial contract expires.
You may be offered a contract with a low price per kWh, but the rate is variable. That means the rate can change throughout the course of your contract, potentially jumping up dramatically.
Early Cancellation Fees
Let’s say you manage to find a long-term contract with a decent, fixed rate. Next, you’ll want to check the contract for early cancellation fees. These fees can be hefty, so you want to ensure you’re completely comfortable with everything in the contract before signing on the dotted line.
You should also look out for these fees in variable-rate contracts, where they can be even more detrimental.
Shop Green Energy
There are reasons to switch the company that generates your electricity that don’t necessarily hinge on saving money. Deregulated electricity markets also allow residential consumers to bring more green energy onto the local grid through Renewable Energy Credits (RECs).
Green energy providers will be labelled as ‘renewable energy’ providers on your state’s site. They’re likely still listed the same way as other providers, by kWh.
In today’s environment, renewable energy generators aren’t necessarily more expensive than your default option. In some situations, they can even save you money.