There is much confusion among the differences between what an electric supplier does and an electric distributor does. Before diving head-first into each of them, why do we even care? Before the 1990’s you had one choice for energy: your utility company. For Maryland, you would have had Baltimore Gas & Electric (BGE). For Illinois, you would have had Commonwealth Edison (ComEd). This company provided you with your electricity, and you paid for it. End of story. During the 90’s the idea of energy deregulation took effect and slowly grew throughout the states. With this act came the opportunity for you to choose where your energy comes from. Unfortunately, some states still do not support energy deregulation, thus is not available. So, what’s the difference between your electric supplier and distributor, and why do we even care?
If you have never changed your energy supplier, then you are receiving the energy from where you always have: whoever your distributor feels like taking it from. This is generally not the cheapest route! If you have changed suppliers, then you know the company that supplies your energy. However, the energy does not come straight from them to you because that is not their job. Your supplier produces the power at their plant, which can be either coal, solar, wind, gas/oil, hydro-powered, etc. Instead, they supply energy to your distributor, who then distributes it accordingly.
Your energy distributor receives the energy and distributes it (hence their title “distributor”). How often do you call BGE or ComEd your “energy distributor”? Not often. You know of the distributor as your utility company. After all, they “supply” your necessary utilities. Part of the confusion comes in when the bill comes in the mail in the first month. Many expect this bill to say Clean Currents, Spark Energy, Champion Energy, or another major energy supplier at the top. Your bill does not come from your supplier; it’s based on them. Your bill will still say BGE/ComEd. Your lines are still owned by BGE/ComEd. And you’ll still get frustrated at BGE/ComEd when the power’s out. The good news is that the price you pay per kWh comes directly from your supplier now, which can save you hundreds of dollars a year in energy! How do you know it’s still coming from the supplier you switched to? On your energy bill under the category that says “charges this period”, or whichever wording your utility company uses to display your charges, it should say the name of the company you switched to. This is not an added fee to your bill; this is a change in the fee that was already there…hopefully a cheaper one!
Summary
Okay, so let’s break all of this down into the short version of 5 steps step-by-step:
- If you’re in an energy deregulated state, you can switch providers (and do).
- Your supplier produces the energy using various methods, some of which are considered “green”.
- Your supplier sends this energy to your distributor, commonly known as your utility company.
- Your distributor distributes this energy among you and your fellow neighbors, using the same lines you had before you switched. These never change.
- You receive and use the electricity at will. When the power goes out, you call your utility company just as you always have and work with/complain to them. You will never have to speak to your energy supplier over the phone, web, by mail, or in person…unless you want to thank them for a lower energy bill!
I hope this has cleared up some confusion among what energy deregulation is, how energy deregulation works, and the difference between suppliers and distributors.
If you’re interested in learning more about how to compare energy rates and switch, check out our “learn more” page! When you’re ready to start saving money on your energy bills, just Point, Click, Switch!
