Most households in deregulated states don’t know they can choose who supplies their electricity. The bill just shows up, month after month, and nobody questions it. But in states like Pennsylvania, Texas, Ohio, and Illinois, you can pick your own supplier, and the gap in what you end up paying can be significant.
So if you’ve started shopping around, this list is where to begin. Here are five factors worth comparing before you commit to a new electricity supplier.
The Rate Per Kilowatt-Hour and What It Actually Includes
The first number to look at is the rate per kilowatt-hour (kWh). This is how suppliers price the electricity they deliver to your home, and it’s the single most direct way to gauge whether you’re getting a better deal.Comparison platforms such as Volt Butler can help consumers review electricity plans and compare rates from licensed suppliers across deregulated states. But don’t stop at the headline rate. Some suppliers quote a rate that excludes distribution charges, meter fees, or state taxes – charges that your utility adds on top. Before you conclude that one plan is cheaper, ask for the all-in price per kWh that you’d actually see reflected on your statement. Supplier plans that look competitive at first glance can look far less attractive once those line items get added back in. Take time to read the pricing breakdown, not just the number that appears in the comparison tool or the sales pitch. A plan that’s genuinely $0.02 per kWh lower than your current rate could translate to $150 to $250 in annual savings on a typical household’s usage – but only if the rate is apples-to-apples with what you currently pay.
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SubscribeFixed Rates vs. Variable Rates
Your second comparison point is the rate type, and it matters more than most people expect. A fixed-rate plan locks your supply rate for the full term of the contract, usually six months to two years, so your cost per kWh stays the same regardless of what happens in the wholesale energy market. A variable-rate plan fluctuates month to month based on market conditions. Variable rates can drop below a fixed rate during mild weather or periods of low demand, but they can also spike sharply during heat waves, cold snaps, or grid stress events, as Texas experienced in February 2021 when wholesale prices hit extreme levels. If predictability matters to your budget, a fixed-rate plan removes the uncertainty. If you prefer flexibility and you’re willing to monitor prices, a variable plan might suit you, but go in with a clear understanding that your bill can change dramatically from one month to the next. Neither structure is universally better. It depends on your risk tolerance, your state’s market conditions, and whether you plan to move or change plans in the near future. Compare both options before you decide.
Contract Length and Early Termination Fees
A low rate grabs your attention fast, but contract terms are where most people get caught. In deregulated markets, supplier contracts range from month-to-month arrangements all the way to multi-year commitments. Longer contracts can come with slightly reduced rates in exchange for that commitment, while shorter or no-minimum-term plans let you switch again if something better shows up. What trips up a lot of customers is the early termination fee, or ETF. Some suppliers charge a flat fee – often between $50 and $150 – when you cancel early; others charge per remaining month on the contract. Move after six months of a 24-month agreement, and that ETF can easily cancel out whatever savings you’d built up. Read the terms before enrolling, not after. Ask what the ETF is, how it’s calculated, and when a supplier will waive it, say, if you’re moving or your utility changes its rate. Many suppliers do waive ETFs for verified address changes, but you won’t get that waiver if you don’t ask.
Supplier Licensing and Regulatory Standing
Every deregulated electricity market requires suppliers to hold a state-issued license before they can sell to residential customers. In Pennsylvania, that’s the Public Utility Commission (PUC); in Texas, it’s the Public Utility Commission of Texas (PUCT); in Ohio, the Public Utilities Commission of Ohio (PUCO); and in Illinois, the Illinois Commerce Commission (ICC). Getting licensed means a supplier has cleared a set of financial and operational requirements to operate legally in that state. Don’t sign up with any supplier you can’t confirm is currently licensed where you live. State utility commission websites list approved suppliers, so you can check status before you enroll. It’s also smart to look up complaint history. Regulators often publish complaint data or enforcement actions, and a supplier with a long record of billing disputes or deceptive enrollment practices isn’t worth the risk, no matter how sharp their rate looks. Licensing is the floor, not a promise of quality service, but the bare minimum worth confirming before you hand over your account.
Renewable Energy Content and Green Energy Options
Many suppliers in deregulated markets offer plans sourcing a percentage of electricity from renewables – wind, solar, or hydro – either through direct generation or renewable energy certificates (RECs). If cutting your household’s carbon footprint matters to you, that’s worth factoring in alongside price. But “green” plans aren’t all built the same way. A 100% renewable plan backed by RECs bought from a facility in another state is a different thing from one drawing power from regional wind farms. Check what percentage is actually renewable, what qualifies under that label, and whether the supplier can back those claims with third-party verification. Some states – including Illinois and Massachusetts – already require all suppliers to carry a minimum renewable share through portfolio standards, so your starting point may be higher than you’d expect. If you want to go beyond that regulatory floor, look for suppliers offering higher renewable percentages or sourcing from in-state facilities. Be realistic, though: green plans can carry a slight premium per kWh. Decide whether that trade-off fits your priorities before you start comparing rates.
Conclusion
Switching electricity suppliers isn’t complicated, but the headline rate is only one piece of it. Compare the all-in kWh price, know whether you’re locking into a fixed or variable rate, read the contract terms closely, confirm the supplier holds a current state license, and decide what role renewable energy plays in your choice. Each of those five factors can shift what a plan actually costs you, and whether making the switch is worth it at all.
