Frequently Asked Questions around how and why to select a third party electricity supplier:
Q) Should I purchase my power from a third party?
A) YES! - Deregulation has given the consumer the right to choose where their energy comes from. You can choose based on price, how green it is for our future, or how much you like the name of the company for that matter.
Q) What are my risks when purchasing from a third party?
A) It's like buy anything else, take for example oil for your home or gasoline for your car. You likely make the selection based on price, but there are quality issues to consider also. For example oil for your home, if it is not the low sulfur type, will create more soot decreasing the efficiency of your boiler and increasing the frequency (which = cost) of boiler cleaning. With electricity there are no dirty electrons that will damage your appliances but there are contract issues that you should be aware of before making your selection. As far as the solvency of the company you select, there is nothing to worry about there because if the company dissolves one night while you're sleeping you simply wake up with your power being provided by your utility company at their "published" rate. No, there is no penalty imposed by them for you leaving or them taking you back.
Q) What contract issues should I be aware of?
A) Usually an energy company will offer a term contract over some number of months. Be wary of those offering yearly or two year contracts because you might get locked into a contract for a term so long that if the price of energy goes down you will not be the beneficiary of those saving. Also, be wary of the termination clause. It is very fair for a company to impose some termination fee if you signed up for their 6 month contract. After all, they went out purchased energy on your behalf for the next 6 months. BUT, this fee should be reasonable, finite, and understandable. Fee clauses that attempt to charge a reselling fee or profit lost fee are subjective and open ended and you should be highly sceptical of this.
Q) What about Green vs Gray?
A) Green energy is energy derived from sources that leave no carbon or toxic foot print. Gray energy on the other hand is usually referring to fossil fuels such as Oil, Coal, and Natural Gas.
Q) What about Green vs Clean?
A) Well, that's what is known as Green Washing in the industry. Clean is a relative term and the company is usually attempting to get the attention of green crowd without spending the extra money acquiring energy from truly "green" sources. Example of this would be Clean Coal, or Clean Diesel.
Q) Will my selecting Green Energy really create more jobs?
A) Yes! Green energy systems create jobs at numerous levels. System construction, installation, and maintenance. It is true, green systems do require a bit more man power to maintain, but they are just as reliable and the cost of the added man power does not come close to the cost of fuel they are offsetting.
Q) If I chose another supplier what happens when the lights goes out?
A) Keep in mind, you are not "changing your utility" but rather you are telling your utility who you would like for them to get your power from. Your bill will still come from your utility company and you will still pay their service fees to maintain the wires, poles and transformers which keep you safely connected to the grid. So in the event of any power problems you will still contact your billing utility company and they will service you as they always have.
Q) Are there any added costs to switch to or away?
A) There should be no added cost to switch to, no subscription cost to stay, and no cost to switch away unless you agreed to a long term contract (then even this should be reasonable - see previous question regarding contract issues.)
Q) Can they change my contract price once I've signed up?
A) No! If you signed up for a term contract your price must stay at that rate for the remainder of the term (3 months, 6 months, etc - although I wouldn't go longer than that, especially with energy prices dropping the way that they are). At the end of your contract you will then have the option to choose another term or go variable, or leave all together.
Q) What is a variable rate?
A) It's like purchasing energy at the gas pump. The company's goal is to get you the best rate every month so that you stay with them as a customer. The risk with the variable rate is that if there is a storm or some major event that drives the price of fuel up then your price for electricity will increase with the market. BUT, if something changes that lowers the cost you'll be the beneficiary of that also. Because, you see, variable customers can usually (depending on the company you've selected) change suppliers at any time with no fee - so if the supplier were to gouge you then they would likely loose you (you know, extra pennies today in trade for no pennies tomorrow). There are no benefits in making a consumer angry in a competitive market. This is just one of the benefits of competition.
Q) Do I have to switch right now?
A) No, but your lack of action is likely costing you extra money and by not making an active choice you're not adding your purchasing power to the collective effort to drive our energy supply green. Additionally, taking no action, there could come a time when your electricity account is automatically picked up by another third party electricity generation vendor who may not have been your first choice.