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Energy Supplier vs. Utility: What’s the difference?

February 22, 2016

What’s electric choice?

Most residents and businesses in deregulated states have the ability to shop and compare electricity supply prices before selecting a supplier. Customers in the states listed below can purchase electric supply services from an energy supplier such as AEP Energy.

When you choose a plan with AEP Energy you’re choosing the cost of your energy supply as well as selecting from term options if you would prefer a renewable energy option. You can view our current offers by entering your zip code here.

AEP Energy offers energy supply in participating utilities of the following deregulated states:

  • Delaware
  • Pennsylvania
  • Ohio
  • Illinois
  • Maryland
  • New Jersey
  • Washington DC

AEP Energy is also a certified natural gas supplier and currently serves customers who reside in Columbia Gas of Ohio’s service territory. We will be expanding in other natural gas utilities in Ohio later this year.

What’s the difference between AEP and AEP Energy?

If you are from the Central Ohio region, you may have heard of American Electric Power (AEP). AEP is one of the largest electric utilities in the U.S., serving nearly 5.4 million customers in 11 states including AEP Ohio, AEP Texas, Appalachian Power (VA, WV), AEP Appalachian Power (TN), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (AR, LA, and north TX).

AEP Energy on the other hand, is an energy supplier and a subsidiary of American Electric Power (AEP). Simply put, AEP Energy supplies the energy to your local utility so they can deliver it to your home or business. We do not bill you directly; instead our services are included in the bill you receive from your local utility. The utility is still responsible for reading your meter and offering emergency and maintenance services.

So how does it work?

Let’s take a look at the image below to break down. Whether you participate in electric choice or not, the electricity supply is distributed in the same way.

aepevsaep-post

Image 1: AEP Energy purchases electricity from Power Generating companies.
Image 2: AEP Energy arranges for Transmission companies to deliver the electricity supply to Electric Distribution Companies (EDC) which are local utilities like AEP.
Image 3: Transmission companies deliver the supply to utility companies.
Image 4: Your local utility then distributes the electricity to homes and businesses.

We hope that this blog helped clarify the difference between the supplier (AEP Energy) and the utility. Please reach out to us if you’d like further explanation or have any questions. You can share comments and ask questions on our Facebook page.

 

AEP Energy is a certified Competitive Retail Electric Service (CRES) provider and as a Competitive Retail Natural Gas Service (CRNGS) provider. While it is an affiliate of AEP Ohio, AEP Energy is not soliciting on behalf of and is not an agent of AEP Ohio. AEP Ohio customers do not need to purchase any competitive retail electric service from AEP Energy to receive or to continue to receive non-competitive retail electric services from AEP Ohio.

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