Comparing electricity and natural gas suppliers
Helps businesses control operating costs, evaluate contract options, and avoid paying more than necessary. In states and utility territories that allow supplier choice, businesses can shop for their energy supply much like they compare insurance, telecommunications, or other business expenses. Eligibility depends on the location, utility, and account type.
Why should a company compare energy suppliers?
- Find opportunities to lower costs. A competing supplier may offer a better price than the company’s existing agreement or utility supply option.
- Improve budget predictability. A fixed supply rate can help businesses plan expenses, although total bills still vary with usage, delivery charges, and any contract exclusions.
- Choose terms that fit the business. Contract length and pricing structure should reflect operating plans, risk tolerance, and whether the company expects to move, expand, or change consumption.
- Review renewal options. Comparing before a contract expires gives the business time to evaluate its next agreement.
- Confirm whether the current option is competitive. Comparing does not mean a company must switch. Sometimes staying with its current provider is the better choice.
What does the process involve?
- Review recent bills and the existing contract. Identify the utility, current supplier, supply rate, annual usage, contract expiration date, and any cancellation charges.
- Confirm eligibility and collect usage information. For custom commercial quotes, a supplier or broker may request a letter of authorization to obtain historical usage. Check that the authorization covers data access and understand any additional permissions.
- Request competing offers. Compare quotes using the same start date, usage assumptions, contract length, and included charges.
- Review more than the advertised rate. Check fixed versus variable pricing, monthly fees, pass-through charges, usage restrictions, termination fees, and renewal provisions. An energy-only quote is not directly comparable to a quote that includes additional supply components.
- Choose and enroll. If switching makes sense, the selected supplier generally coordinates enrollment with the utility. In typical utility choice programs, the local utility continues delivering the energy and handling outages.
- Check the first bill and track renewal dates. Confirm the agreed pricing is applied and reassess options before the next expiration. State shopping resources emphasize comparing both prices and contract terms before switching.
How much can a business save?
There is no honest universal savings percentage. Savings depend on usage, the current supply cost, available offers, and contract charges. These are illustrative calculations not current quotes or guaranteed results:
| Example | Annual usage | Current supply rate | New supply rate | Estimated annual supply savings |
|---|---|---|---|---|
| Electricity | 100,000 kWh | 12¢/kWh | 10¢/kWh | $2,000 |
| Electricity | 500,000 kWh | 12¢/kWh | 10¢/kWh | $10,000 |
| Natural gas | 30,000 therms | $0.80/therm | $0.65/therm | $4,500 |
Electricity and Natural Gas Savings
Estimated annual savings = annual usage × difference in comparable supply rates, minus additional fees or switching costs.
These examples assume unchanged usage and rates for a full year. A reduction in the supply rate is not the same percentage reduction in the total utility bill, because delivery and other charges remain. Future savings against a changing utility rate cannot be guaranteed.
For a business considering Bid On Energy, a practical starting point is a recent electricity or natural gas bill and the existing contract’s expiration date. Those details help establish whether competing offers could reduce costs or provide more predictable supply pricing.