Small businesses collectively spend $60 billion on energy each year. That's an expenditure with significant economic implications, given that small businesses have generated nearly 13 million net new jobs over the past 25 years.

Being a small business owner means you pack the boxes and pick the right energy company to power your operations.

As part of an ongoing monthly series on the Live Brighter Blog, Direct Energy Business will share some useful insights and information that can help small businesses optimize their energy use, maximize their energy expenditures, and boost their overall bottom line.

In this edition, we’re going to begin by tackling a common question: "What’s the difference between utilities and retail energy providers?"

What is a retail utility?

Traditional retail utilities own and operate the way electricity is transmitted and distributed to homes, businesses, and factories. The transmission wires that deliver electricity are owned by your local retail utility company, and transmission and distribution charges are set by regulators.

Your local utility also conducts monthly reads to your electric meter, takes care of billing in some service territories (specifically not in Texas), and handles emergency situations, such as power outages.

What is a retail energy provider?

Retail energy providers – which includes Direct Energy for residential customers and Direct Energy Business for commercial and industrial customers – vie to supply power to homes and businesses in competitive electricity markets. This is especially true in the nation’s only fully deregulated market: Texas.

In competitive markets, Direct Energy Business can provide several benefits to small businesses including competitive pricing options that more closely reflect the current market and improved customer service. Additionally, we also offer certain businesses “green” or sustainable solar power options.

See what's offered in your area here.

So, what’s the difference between retail energy and retail utility?

If you have any questions regarding meter reads, power outages, or other matters related to electricity delivery, always contact your local utility. If your business is located in a deregulated market and is looking for a new electricity supply, contact Direct Energy Business.

For a more graphical breakdown of the specific roles of utilities and retail energy providers, check out this helpful infographic.