Do I have to purchase electricity plans from a retail electric provider?

That depends on your state’s regulations. Texas , for example, requires consumers to buy energy plans from REPs. However, other deregulated states like Massachusetts allow consumers to purchase electricity from their utility company or an alternative electric provider.

Can I switch providers if I’m not happy with my service?

Yes, you can always switch providers. However, you may receive an early termination fee if you choose to end your service before your contract is up. Check your current energy plan to learn about any fees you could incur.

Does deregulation lead to lower electricity bills?

Deregulation does not necessarily lead to lower electricity bills. However, it does allow you to compare rates between providers in your area and pick the cheapest plan.

What are the benefits of deregulated energy?

Many consumers enjoy having the option to pick their plan, provider, and rate. Unlike in regulated states, where consumers have little control over their electricity plan, deregulation gives consumers more autonomy. Energy providers in deregulated states tend to offer a wider variety of plans to attract more customers and compete for your business.

Moving to a Deregulated Area

Here’s what to do about electricity when you move to a deregulated state.

Written by Dominique Sabins

Edited by Jamie Cesanek

Last updated 10/04/2024

Mature woman using her smart phone to search for deregulated energy service for her new home

svetikd/E+/Getty images

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Key Points

Deregulated energy markets put the power in customers’ hands, allowing them to choose their own electricity provider and plan.
If you’ve never lived in an area with deregulated energy before, you’ll have to choose a provider and plan when you move to one.
SaveOnEnergy’s free marketplace makes moving to a deregulated state simple by helping you shop and compare plans in your area.

What is deregulated energy?

Energy deregulation allows consumers to choose their electricity plan from various retail electric providers (REPs) in their area. In regulated energy markets, electricity is only provided by the local utility company. Deregulated markets let individuals and businesses shop and compare prices and plans. SaveOnEnergy is a free marketplace that makes signing up for your new electricity plan easy.

Deregulated markets in the U.S.

According to the Environmental Protection Agency (EPA), 18 states and the District of Columbia offer some form of deregulated energy. However, deregulation may look different depending on the state. Enter your ZIP code on SaveOnEnergy to find out if deregulated energy plans are available in your area.

Moving to a deregulated state

While living in a deregulated state has many benefits, navigating it can also be confusing. If you are moving to a deregulated state for the first time, there are a few things to know. Let’s break down the types of plans and terms you will encounter.

Types of plans

Fixed-rate. Fixed-rate plans provide a set electricity rate for the duration of your contract. These plans are the most predictable because you know exactly how much your electricity rate will be every month. This is a great option for shoppers who want stable electricity bills.
Variable-rate. Variable-rate plans offer more flexibility because your rate fluctuates based on the market cost of electricity. Many consumers choose variable-rate plans as a short-term solution. However, these plans may risk a rate spike and higher costs during peak periods.
No-deposit. Traditional electricity plans often require a deposit to begin service if your credit score does not meet their threshold. No-deposit electricity plans allow you to skip the upfront cost. Prepaid electricity plans are a common type of no-deposit plan where you prepay for your service and add more funds as needed.

Renewable options

Texas leads the nation in renewable energy, particularly wind and solar power. Due to its abundant renewable resources, all Texas energy plans contain a percentage of renewable energy. However, if you want to increase your household’s use of renewable energy, consider providers offering 100% green energy plans, such as Gexa Energy and Green Mountain Energy.

Important terms to know when energy shopping

Utility company. While you can pick your energy provider, you cannot choose your utility company. Your utility company maintains power lines and delivers electricity to your home. This is also who you would call if you lose power.
Electricity Facts Label (EFL). An EFL details important information about your energy plan. This document will often contain charges and fees associated with your contract.
Early Termination Fee (ETF). You may be subject to an ETF if you stop your service before the end date, if you’re enrolled in a fixed-rate plan. Check your Electricity Facts Label to determine if your plan includes an ETF.
Utility Distribution Company (UDC) charge. Your electricity bill includes a fee for delivering electricity to your home. UDC stands for “Utility and Distribution Company.” This fee may also be called a TDU charge for “Transmission and Distribution Utility.”
Slamming. This occurs when your electricity provider switches your plan or provider without your consent. Your provider must receive your consent to switch your service. Contact the Public Utilities Commission if you believe you have experienced slamming.
Cramming. Your provider must tell you in advance if there are additional charges to your electricity bill. Cramming occurs when your provider adds a charge without notifying you. Contact your provider if you receive charges you were not aware of.
Your Rights as a Consumer (YRAC) Disclosure. Your REP must provide a YRAC disclosure informing you of your energy consumer rights. It is important to closely read this document to understand your rights and responsibilities.

illustration highlighting the difference between regulated and reregulated energy markets

Shopping on SaveOnEnergy

We know that moving is already stressful. That’s why SaveOnEnergy helps you shop, compare, and sign up for your electricity plan all in one place. Our marketplace offers a safe and secure checkout process to bring you peace of mind. Sign up for a new energy provider and plan with a few simple steps.

Enter your ZIP code. Our marketplace will show you what plans and providers operate in your area. You can filter to narrow down your search, including term length, rate type, green energy, and more.
Select a plan. Once you find a plan that works best for you, follow the prompts to sign up within minutes. If you have any questions, call the number on your screen and one of our energy experts can help you.
Enjoy your new service. Once you sign up, you should receive an email confirming your new energy plan. If you don’t receive an email, contact your energy provider. They will handle setting up your service with the local utility company.

Deregulated energy for businesses

Business owners can also benefit from deregulated energy markets. If you move your company or open a new business in a deregulated area, you can shop for commercial electricity plans with the help of SaveOnEnergy. Start exploring your options by filling out our business energy form. You can also call the number on your screen to discuss options with our energy experts.

Deregulated energy FAQs

That depends on your state’s regulations. Texas, for example, requires consumers to buy energy plans from REPs. However, other deregulated states like Massachusetts allow consumers to purchase electricity from their utility company or an alternative electric provider.
Yes, you can always switch providers. However, you may receive an early termination fee if you choose to end your service before your contract is up. Check your current energy plan to learn about any fees you could incur.
Deregulation does not necessarily lead to lower electricity bills. However, it does allow you to compare rates between providers in your area and pick the cheapest plan.
Many consumers enjoy having the option to pick their plan, provider, and rate. Unlike in regulated states, where consumers have little control over their electricity plan, deregulation gives consumers more autonomy. Energy providers in deregulated states tend to offer a wider variety of plans to attract more customers and compete for your business.