- Written by Jessica Riel
- Published: 29 June 2015
“Excited” to change to a different supplier?
Here’s what you need to consider
In part 1 and part 2, we have been discussing “competitive suppliers,” the companies that generate electricity and compete to sell electricity to you. We explained the history of our local electricity maintenance and delivery from National Grid and Eversource and explained the change that allowed these competitive suppliers to sell you electricity at various rates. We also explained what to do if you have been contacted by a telemarketer or door-to-door impersonator or switched to a new supplier without your consent.
But what if you want to try to find a “greener” or “cheaper” electricity rate with a competitive supplier? Here’s what you should be aware of when considering your options.
I’m thinking about trying out a competitive electricity supplier. What should I know?
Sometimes it makes sense to go with a competitive supplier. Perhaps the lower rates entice you and you see a place to save money in your budget. There are reasons to go with a competitive supplier in addition to wanting to save money. For example, if you’re into sustainable living practices, you may opt to pay more with a competitive supplier that sells green electricity.
When considering competitive suppliers, get referrals, compare costs, check their rating with the Better Business Bureau, and contact the Attorney General’s Office to check on their history of customer complaints.
Competitive suppliers control your contract, including term, rate, and fees. To avoid paying unexpected fees or getting stuck with a fluctuating rate, you need to understand all of the details before signing a contract.
The National Consumer Law Center offers these suggested questions to ask prior to choosing a competitive supplier:
- What will I pay per kilowatt hour (kWh)?
- Will my rate ever change? If so, how often will it change?
- What charges will show up on my bill?
- Are there fees for cancellation? Payment processing? Late processing?
Even if you ask these questions, a salesperson may not provide you with the correct information. One competitive supplier may offer one person one contract and another person a different contract.
“If you’re going to try to take this on,” says Assistant Attorney General Ann Lynch, “you need to read the contract, which may or may not be a really good deal.”
When reading the contract, look for terms like “period term,” “sign-up fee,” and “cancellation fee.” Know rates and terms, and watch very carefully – rates can depend on usage. Make sure you know what will happen after the one-, six-, or 12-month contract period. After the original contract term, your contract may change or auto-renew at a different rate, which could be higher than your previous low- or fixed-rate; it could also be variable.
“Unscrupulous suppliers have done whatever it takes, including offering cash rebates and making misleading statements about fees,” says Smith, to get account holders to sign a contract. “They entice consumers with a low rate with no guarantee that the rate will stay low. Contracts are typically for 6 months. If [someone] breaks a contract when a second supplier calls offering an even better deal, the [account holder] suddenly finds themselves hit with a cancelation fee from the first supplier.”
“Make sure you understand what you’re agreeing to,” says Janice Garrett, Director of Consumer Protection Unit of the Northwestern District Attorney’s Office.
While speaking with a salesperson, says Atty. Lynch, “you should protect your personal information,” including all account numbers. It is illegal for a competitive supplier to slam you, or switch you to their electric supply without your consent, but some have been known to do so by obtaining an account holder’s account number.
The work doesn’t end when you sign on the line. Once the contract starts, set a reminder for yourself to check-in again before the first term ends. “You need to stay on top of the contract you are signing and reevaluate the situation every six months so that you stay green and cheap,” says Gretchen Smith, Benefits Counseling Program Coordinator at Franklin County Home Care Corp. Since this is not a common practice with utility bills, it may be challenging to stay on top of the changes and save money over the long-term.
Be on the lookout for red flags: if it seems too good to be true or you feel rushed, you should be cautious.
“If someone wants to marry you in a month, that’s a bad sign,” says Atty. Lynch. If a competitive supplier wants to switch you right now, that’s a bad sign.