#Power utility how to#

The electricity providers or suppliers purchase the rights to large volumes of this electricity from the generators on the wholesale market. It all starts with the power generators – the companies who produce electricity to sell on the wholesale market. However, these two entities play very different roles behind the scenes.įor deregulation to function properly, they need clearly defined job descriptions. To the general public, it’s not usually that big of a deal where the electricity comes from or how it gets to their location, just as long as it does. What’s the Difference Between Electricity Provider vs. Whether you buy power from an electric supplier or an electric utility, it’s the same poles and wires that deliver it to your home. Or they may purchase power from other wholesale electricity sources. The utility may purchase electricity from their own power plants. However, their parent company may own and operate facilities that generate electricity. These electric utilities must buy power to serve customers that haven’t switched to another electricity provider.ĭelivery companies or electric utilities typically do not generate electricity in a state that is deregulated. In some states (like Ohio or Connecticut) consumers can still choose to buy their supply from the utility company. With deregulation, the supply of electricity was opened to competition.Īnd in states like Texas, the utility company can not sell electricity, you must buy electricity and shop for an electricity provider. The terms are interchangeable.īefore deregulation, everyone was required to buy their electricity from their local utility company. You may also see the term TDU (Transmission and Distribution Utility) used. TDSPs (Transmission & Distribution Service Providers) or EDUs (Electric Distribution Utilities) are common names used for local electric utility companies. And you may even refer to this company as “the local electric company.” Utility companies are responsible for the physical delivery of electricity to your home or business. They are the ones that you call when your power goes out. What is an Electric Utility?Įlectric Utility defined: Electric utilities are the companies that own and maintain utility poles and power lines.

#Power utility how to#

See our post on how to shop for an electricity plan for more info. Switching to one of these authorized electricity providers is easy. Your state’s public utility commission website keeps an up to date list so you can easily search “ electric companies near me.” That way you can be certain that you are purchasing electricity from an authorized electricity provider.Īll of the electricity providers represented on are licensed electricity suppliers in the respective states where they do business. But switching to a licensed electric supplier lets you lock in a fixed rate.Įvery state that is deregulated requires suppliers to be licensed or certified by the state in order to sell electricity. In other states, like Ohio or Connecticut, you can stay with the local utility. You can’t buy electricity from the local electric utility. In some states, like deregulated areas of Texas, you must pick an electricity supplier for your home or business.

State’s label electricity providers with different names such as, REPs (Retail Electric Providers), CRES (Competitive Retail Electric Service providers), or certified electric suppliers, to name a few. And, they work with the local utility company that delivers that power to customers. They then sell it at the retail level to the general public for use in homes and businesses. What is an Electricity Provider?Įlectricity Provider defined: Electricity providers are companies that purchase wholesale electricity from electricity generators. Understanding how they fit together can make a big difference in your overall confidence as an electricity customer trying to shop for the best electricity plan. They’re both vital to the success of electricity deregulation, but they play very different roles. One of the most common sticking points for electricity customers is what is the difference between electric delivery vs. When it’s time to choose an electricity plan, it can be really confusing picking your way between all the options available and the host of new terms.