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Understanding Electric Choice

March 05, 2013

It never fails. Whenever I’m talking to a new friend about where I work, I always hear, “I’ve heard that I can choose an electricity supplier to save money, but how does it work?”

It may seem like a new concept to many, but energy deregulation has been enacted in several states for many years. I like to compare it to fueling up at the pump. One gas station may have a lower price than another gas station right across the street. It’s the same gas, just cheaper. Which station would you go to?

How Electric Deregulation Works

It may be helpful to start by explaining the three key players of your electricity service:

  1. The Producer
  2. The Supplier
  3. Your Local Utility

The producer is responsible for generating the power. Just like other commodities (such as gold or natural gas), the price of electricity is volatile and can move up or down in price based on market pressures.

An electricity supplier, like AEP Energy, shops the market every day for competitive electricity prices. When market conditions are favorable, AEP Energy hedges or purchases a large quantity of power and sells it to customers. Suppliers are able to compete for your business by offering a variety of different pricing options and terms. You choose what’s best for you. For example, a supplier may offer a fixed price for a 12-month term. You benefit by securing an electricity supply price that offers protection from volatile energy prices.

Same Electricity. Lower Price.

The supplier you choose works with your local utility, who will continue to deliver the electricity to your home or business. Nothing changes. Your local utility will continue to:

  • Send you one bill with all your charges;
  • Read your meter;
  • Provide maintenance and emergency services.

You see, with electricity deregulation, you are receiving the same electricity service, but simply paying less for it. By having the power to choose what you pay for your electricity supply and who you buy it from, you’ll have more control over your electricity costs.

So, start saving! Grab your local utility bill and enroll with AEP Energy – “Your Experts in Electricity Savings”®. Visit or if you have questions, please call our Customer Care Team at 1-866-258-3782. If you need more information, the Public Utilities Commission of Ohio (PUCO) offers some helpful tips for residents of Ohio, one of the states with deregulated electric supply.

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