Are you using energy deregulation to your advantage?

Wait! Did I lose you after energy deregulation? No worries, I was in the same boat until recently. I did some digging and found that I could be saving even more money on energy because the state where I live is deregulated.

"Deregulated energy can mean we as the consumers get more of a say about how much we pay for energy."

Here’s how it works: In states where energy is deregulated, consumers can choose their own energy supplier because they don’t have to use the one set by their energy distributor.

See, on your monthly bill (if you live in a deregulated state) there is a delivery charge and a supplier charge. The delivery charge is the one your electric/gas company charges you for delivering your energy. The supplier charge is what you pay per kWh—and what you can shop around for.

For me, the standard supplier that comes with my bill charges me a little over 7 cents per kWh. I went online and chose another supplier, made the switch, and now I am paying a little over 5 cents per kWh. That may not seem like much, but it amounts to about $200 per year.

There are terms to the contracts you sign with suppliers and you want to make sure your rate is fixed so it doesn’t suddenly spike. You also don’t want to go into a long-term contract if you’re not sure how long you’ll be at your present address. What worked best for me was a short 6 month contract with a fixed rate. After that expires I will need to make sure I renew a contract that will give me a comparable rate, otherwise I’ll be renewed at the ‘market rate’.

If you’re new to deregulated energy, it can be confusing at first. But in the end, it means we as the consumers get more of a say about how much we pay for energy. There are multiple companies out there that want our business as energy consumers. Let’s use that power to our advantage, shop around and choose wisely.

And no worries, it might seem confusing in the beginning, but after a while the hardest part will be figuring out what to do with the extra $200 a year. ;-)

Photo credit iStock