Although the difference between a utility company and an energy supply company might be confusing, consumers benefit from the increase in options that the latter provides.
Utility Company and Energy Supply Company
The local utility company used to be the sole energy provider. Then the federal government’s decision to pass legislation in the early 1990s made the retail energy market possible.
Some states took advantage of this, which gave consumers more energy options. Energy supply companies can now offer their services to these deregulated locations.
A utility company manages the transmission and distribution of electricity and owns the wires used to deliver that electricity. Regulators are responsible for setting the price for consumers.
A local utility company also handles the following responsibilities:
● Reading electric meters
● Resolving energy emergencies
● Repairing power lines
● Maintaining power lines
Energy Supply Company
Energy supply companies offer their services to homes and businesses in deregulated areas.
Choosing an energy supply company doesn’t mean a utility company is no longer needed. Instead, a utility company must still handle the following tasks:
● Purchasing electricity
● Product Design
● Billing (In some states, like Texas)
In summary, a utility company manages the energy and how it gets delivered to the consumer, while the energy supply company sets the price the consumer pays. This is seen on the bill, which is still sent from the utility company.
When possible, choosing an energy supply company to meet energy needs has several benefits for consumers, such as:
● Different pricing options;
● Renewable energy sources (like wind, solar, or hydro)
● High-quality customer service;
● Use of the most advanced technology;
● Alternative or Green energy options;
● Carbon Neutral energy (even for natural gas).
Where to Turn
When consumers have issues or questions, they might be confused about who to call. Should they contact the energy supply company or the utility company?
The issues that require reaching out to a utility company include:
● Power outages;
● Questions about electric meters;
● And reporting power lines that need to be repaired.
Consumers should call an electric supply company when:
● Interested in starting a new plan;
● Wanting to make changes to a current plan;
● Wanting to know more about certain products and services.
Regulations in Place
Consumers shouldn’t be alarmed by the term ‘deregulated.’ This doesn’t mean certain standards for energy supply companies haven’t been put into place, nor does it mean consumers are at risk.
Public Utility Commissions (PUCs) is in charge of regulations regarding utility companies. These regulations protect consumers, ensuring they will still receive service even when their utility company is facing financial hardships. PUCs also regulates rates to keep them fair for the company and the customer.
The Federal Regulatory Commission (FERC) is the overseer of energy supply companies. This organization has set strict regulations, meant to protect consumers from deceptive practices and to prevent monopolies from taking over the competitive energy market.
Every energy supply company is required to pass tests that keep them compliant with the FERC’s regulations.
Consumers who live in deregulated locations should consider choosing an energy supply company. It is both safe and beneficial, providing customers with more pricing choices and alternative energy options.