The Search for the Cheapest Electricity Supplier
The cheapest gas and electricity supplier for your home will depend on three main factors – your location, the amount of energy you use and the type of meter you’re on.
How to find the cheapest energy supplier
This information affects your results in the following ways:
This means the energy tariffs that will be displayed will be tailored to your circumstances – these will be the cheapest deals for someone in your location and with your usage figures. This also means there is no single cheapest energy supplier or tariff for everyone – each customer will need to use their details to determine the cheapest energy deal for their situation, and then switch to the most appropriate one for their circumstances.
While there are plenty of sites that promise to do the comparative shopping for you, they may not list all suppliers available. State-run sites have the complete list. Other sites may only list suppliers they represent.
Finding a state’s list of licensed energy suppliers can be a frustrating process — that’s why we did the legwork for you. Toward the end of this article, we’ve got the links to each state’s site. These sites provide a list of questions to help you pick a supplier.
Tip: Many state sites post a complaints scorecard. These scorecards show how each electric supplier compares to the average rate of complaints about the entire residential market.
FYI: Electricity generated from a green power source such as sun, wind, or water can be more expensive than electricity generated by fossil fuels.
What You Need to Know Before You Compare
The key to finding a good deal starts with:
Before you start shopping around, you’ll need to:
Figure out the average amount you paid per kilowatt hour (kWh) for the last 12 months. If you don’t have your last dozen bills on hand, call your electricity supplier.
Next, take a look at your current bill, focusing on three things:
How the Different Rates Work
Now, here’s where things can get tricky. The following are pricing options that affect kWh costs. They’re considered standard in the industry. It’s important to understand these terms before agreeing to work with a new electricity supplier.
Fixed: This is a locked-in unit price for kWh throughout the term of a contract.
The good and bad: If energy prices skyrocket during your contract, your unit price won’t be affected. But if prices drop below the unit price, you’ll end up overpaying.
Floating: Also known as a variable rate, this allows a homeowner’s unit cost to rise or fall based on the wholesale value of electricity or natural gas.
The good and bad: Although this may sound like a great deal when prices are low, if the market becomes unpredictable or if prices sky rocket, it can be difficult to manage your home’s energy costs.
Hybrid: This is when a percentage of energy use is billed at the fixed rate and the remainder is billed at the floating rate.
The good and bad: In this case balance is everything. You could end up with a whopping energy bill if the floating rate goes up and it’s applied to a large percentage of your bill.
Maintaining a cheaper deal
Once you’ve found and switched to a suitable energy tariff, it might still be worth checking energy tariffs regularly every six months, as energy suppliers frequently change their prices. Keep in mind that you may not be able to switch until the tariff end date unless you pay a cancellation fee. You may wish to do so if you believe the savings will make up for the charges you’ll need to pay for switching early.