Hiring | Fresh Coast Utility

Why Should I Explore Having a Supplier?

Why having a Supplier is an Option?

Did you know that you might be paying too much for the natural gas you use in your home or business? You aren't alone. Many customers in the great state of Michigan don't realize they can choose how they purchase their natural gas.

Michigan is one of 21 states in the U.S. that offers a deregulated market to electricity and/or natural gas customers. This means, if you find another energy supplier offering better pricing or service, you can switch to that company!

What are the basics of energy choice in Michigan?

To better understand how deregulation works for you, let's walk through the two components of your energy bill. Some states and companies may use different terminology, but the concepts are the same:

Delivery Fee: This fee goes to your local utility, which owns and maintains the infrastructure. When there's an outage in your area, you call your local utility to have service restored.

Supplier Fee: Because you can purchase your energy from your local utility or from one of the competitive suppliers registered to do business in your state, the supplier fee goes to whichever company you choose to purchase your energy from.

Competitive suppliers offer more flexibility in pricing, because unlike many local utilities, their prices are not regulated by the utility company.

Switching is Easy!

Changing energy suppliers can be quite simple. For starters, there is no fee or penalty to switch as long as you aren't currently in a contract. (You can learn whether you are by making a quick call to your utility company.)

What is the Difference Between a Utility and an Electricity Provider?

Depending on where you live, you might think of your "utility" and "provider" or "supplier" as being one and the same. But in states with deregulated electricity and natural gas markets, there's an important difference. A utility is the company that maintains electrical equipment and delivers electricity or gas to your home. A provider is the company that provides you with plans, rates, bills and customer service.

For decades, utilities were one-stop shops for generating electricity or gas, transmitting it to customers and processing payments. Customers didn't have a choice in the matter -- your utility depended on where you live.

Then, in the 1980s, some states began to allow the deregulation of electricity markets.

What is a Utility Company?

In a deregulated market, the utility is the company that owns and maintains the lines, wires, poles and transformers that deliver electricity and gas to homes and buildings. The utility is responsible for checking meters, restoring power after severe weather and emergencies and fixing gas leaks. As it was before deregulation, it's the norm for a single utility to serve a large geographical area. In some parts of the United States, utilities compete along with competitive providers and act as the default provider for customers who do not choose their own.

It's important to remember who your utility is so you know which company to contact if there's ever a power outage, gas leak or other emergency in your area. They might not be the company that bills you, but they are an important player in the energy process, since they bring the energy to your home and make sure there's no interruption.

What is a Retail Energy Provider?

Providers, also referred to as competitive suppliers, alternative suppliers or third-party suppliers, are companies that market and sell electricity or gas service directly to customers. In other words, a provider buys electricity or gas from power generators, and you buy it from the provider of your choice. Customers in deregulated markets can choose from among several different providers. These companies handle billing and payment processing, and they compete for business in a variety of ways.

The lasting benefit to deregulation in the energy grid is that the consumers hold all the power. You can choose the provider that is right for your home or business, and you can switch to another one if your current provider doesn't meet your needs.

How Do Energy Providers Compete?

The driving force behind the move toward electricity deregulation was a desire to break up the geographical monopolies that utilities enjoyed. Because customers couldn't take their business elsewhere, utilities lacked an incentive to provide superior customer service or competitive rates. In a deregulated market, providers that don't work hard to earn and keep customers risk losing them to their competitors.

In addition to competing on the basis of customer service quality, providers vie for customers with the following:

Lower rates. To attract customers who are focused on the bottom line, some providers emphasize their cheap rates.

Variety of plans. Providers offer a mix of fixed-rate plans, variable-rate plans and plans with flexible payment options. Some plans include special offers, like free electricity on weekends. This allows customers to choose a plan that fits their budgetary needs, lifestyle and risk tolerance.

Shared values. Some providers reach out to environmentally conscious customers by investing in renewable energy, while others may appeal to customers' sense of charity by sharing profits with local service groups.

Promotions. When you shop around, you will likely find providers offering signing bonuses like cash rebates, consumer electronics and enrollment in rewards programs. To take advantage of these promotions, you'll typically need to commit to a provider for a certain contract period.