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How Does Energy Choice Work?

December 13, 2018

If you live in a deregulated state, as a consumer, you have “energy choice”.  Energy choice is the option to purchase energy from a licensed  retail energy supplier, like AEP Energy, or from the utility.

 

THE NUTS AND BOLTS

Electricity, much like most other commodities, is capable of being bought, sold, and traded, on the open market.  In this competitive market environment, participating retail energy suppliers closely monitor energy prices, and purchase electricity for customers based on current market prices.  This price can be locked in for the consumer, over a period of time, to avoid high energy prices during the year when energy demand has increased due to extreme temperatures, shortages in supply, and delivery constraints.  Suppliers then sell this power to consumers, which helps save money on the generation and, in some states, transmission service portions of their local utility bill.

Utilities are regulated by the state’s Public Utilities Commission, which dictates and enforces specific rules preventing utilities from actively participating in the open .  These rules are put into place to avoid utilities having the ability to monopolize electricity generation.

The rates charged by the utility may fluctuate due to seasonality, utility fuel, and other costs, and are set by the state’s regulatory .  Because competitive retail energy suppliers like AEP Energy purchase energy differently, they can offer a variety of different fixed and variable pricing, terms, and options.

BENEFITS OF CHOICE

The upside to purchasing energy from a competitive retail energy supplier, aside from a potentially lower rate and more customized options, is the same utility will continue to provide reliable service, energy, maintain lines and outages, with no interruption in flow.  Whether you participate in energy choice or not, the supply is distributed in the same way.  The difference is that consumers benefit by selecting a supplier of their choice that offers the price, term and percentage of renewable energy of their liking.

 

In Ohio, you can visit the Public Utilities Commission of Ohio shopping site, Apples to Apples, to compare the rates of energy suppliers in your area.  You can also shop on individual suppliers’ websites.

To find a price plan that’s right for you from a business you can trust, and earns you reward dollars too, check out AEP Energy!

AEP Energy does not guarantee the accuracy, timeliness, suitability, completeness, freedom from error, or value of any information herein. The information presented is provided “as is”, “as available”, and for informational purposes only, speaks only to events or circumstances on or before the date it is presented, and should not be construed as advice, a recommendation, or a guarantee of future results.  AEP Energy disclaims any and all liabilities and warranties related hereto, including any obligation to update or correct the information herein.  Summaries and website links included herein (collectively, “Links”) are not under AEP Energy’s control and are provided for reference only and not for commercial purposes.  AEP Energy does not endorse or approve of the Links or related information and does not provide any warranty of any kind or nature related thereto.
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