What happens to my bill when I switch energy providers?

Direct Energy, January 2, 2024

4 minute read

What happens to my bill when I switch energy providers?

Direct Energy, January 2, 2024

4 minute read

Suppose you live in a state where energy is deregulated. In that case, you may have noticed that the energy price is sometimes cheaper from someplace other than your local utility company in North America. If you're just not sure about the idea of switching, you probably have lots of questions about it, like:

  • Does your service suffer?
  • What happens to your bill when you switch?
  • Do you have to pay two bills?
  • Is there an overlap in service?
  • Do you have to dig up your bank routing number so you can keep making automatic payments?
people reviewing their electric bill
people reviewing their electric bill
people reviewing their electric bill

Want to know what happens when you switch? We've got answers

Texas deregulated market: 

  • Switching energy companies is a simple, coordinated hand-off between your old provider and your new provider, and it won't interrupt service to your home.
  • The local utility company for your area still owns all the equipment and infrastructure needed to transmit and deliver energy to your home. You’ll contact them to report any power outages.

Other deregulated states: 

  • The good news about switching utility providers is that nothing happens to your electricity bill. People are pleasantly surprised to discover how easy it is to switch to a new competitive supplier with a better energy rate.
  • Even better, switching is a simple, coordinated hand-off between your local utility and your new provider, and it won't interrupt service to your home. 
  • Whether you stay with your utility company or switch to a competitive supplier, the local utility company for your area still owns all the equipment and infrastructure needed to transmit and deliver energy to your home. You'll contact them to report any power outages
  • Thanks to deregulation, you can purchase energy from a competitive supplier. Sure, the local utility company still delivers electricity and/or natural gas, but the idea is to foster competition and incentivize energy companies to provide better service and keep prices in check.

What does this look like on your bill?

Texas deregulated market:

Your new electricity provider will generate your bill. You’ll get information about your electric usage, plan information, taxes and fees and even special offers and promotions. Read our helpful guide to understanding your Direct Energy bill to learn more. 

Other deregulated states: 

  • If you switch to a competitive utility supplier, your local utility company will still generate your bill. You still see the exact fees for transmission, distribution, taxes, and other assorted expenses, but you'll also see one new one – consumption.
  • When you were with the utility company, this information was wrapped up in the transmission and distribution fees. After you choose a competitive supplier because you want a multi-year fixed-rate plan, the amount of energy you use during a billing cycle will appear as a new line item on your bill. You'll see your competitive supplier mentioned by name and the rate you pay for your electricity or natural gas.
  • When you switch, even though you are technically now paying two entities — your local utility and your supplier – those charges are consolidated into one bill for your convenience. To make things even easier, your local utility will still process your payment, including paying your competitive supplier. Hence, it's the same bill you've always paid! 

Ready to make the switch? Check out what Direct Energy can offer you.


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