What's the Difference Between Energy Suppliers and Utility Companies 3-25

Energy Suppliers and Utility Companies: What’s the Difference?

Comparing Your Choices for Energy Suppliers

In the past two decades, more than fifteen states (and counting) across the United States have allowed for the deregulation of electricity for consumers. What does this mean for you? Well, if you live in one of these states (including Illinois, New Jersey, Ohio, and Pennsylvania) you can choose where you source your energy from, letting you purchase green/renewable energy.

“That’s great!” you say. “But there’s only one utility company in my area. How does this help me at all?”

We hear this concern so often because—let’s face it—the energy industry can be pretty confusing. And, unfortunately for you, the industry is too-often confusing on purpose. But we’re working to change that by making things clearer and more straightforward.

Let’s start by explaining the differences between energy suppliers and utility companies—and how knowing these can help you make an educated choice.

What are utility companies, and what do they do?

In short, your utility company sells you electricity and connects it to your home. They take energy from whatever suppliers they choose and send it to your home through power lines that they maintain. Their job is to provide anyone in that area who needs power with reliable electricity.

While this may sound easy enough, it’s not quite so simple. The reason you’ve only been able to purchase from one utility company or electricity company is because utilities are awarded a monopoly in their particular service areas. They offer reliable power and maintain the power lines in exchange for being able to charge, essentially, whatever they want for their services.

What are energy suppliers, and what do they do?

While utility companies connect you with power and electricity, energy suppliers actually provide the energy that you and the utility companies rely on. Different energy suppliers produce energy in different ways—including, but not limited to: natural gas, nuclear power, coal energy, hydropower, solar power, and wind power.

Traditionally, your utility company would choose which of these to do business with. And this likely means the one that’s going to make them the most money. Thanks to deregulation, though, the choice is no longer up to them. You can now choose your own energy suppliers based on the criteria that matters most to you. For example, you may choose your energy supplier based on who:

  • Has the best available rates
  • Offers the most green energy
  • Has a fixed-rate price structure
  • Offers incentives for reduced energy consumption

But now, you have a choice! Here’s why you should choose green energy.

For years, we’ve been relying on fossil fuels for energy. And while these are effective, they’re harming the planet more and more each year. Plus, our reliance on foreign sources for fuel has been negatively affecting our economy and job security in the U.S. By choosing green energy, you can help improve the planet, support job growth, and improve our economy.

Choosing green energy should be easy. Find out more about how it works here.