When you switch to a third-party supplier, power is typically purchased at the contract signature date for the term that was signed (typically between 12 and 36 months). Suppliers typically have contract language in place protecting them from consumers switching in the midst of a contract, so consumers must be very careful of liquidated damages and early termination penalties that typically exist in breaking a contract early. A trusted energy consultant can help consumers walk through contract language and scenarios associated with early termination.

In States which have deregulated and introduced competition, you may be able to save money by switching to a third-party supplier. Energy markets are volatile, and default tariff rates frequently change. Therefore, many consumers switch to either lock in substantial savings or to lock in a long-term fixed number providing budget certainty.

Credit and payment history are important considerations for both third-party energy suppliers as well as local utilities. Third-party suppliers all have different criteria for retail client credit thresholds, and OnDemand has been very successful in finding solutions for all clients, even those who may have had some recent credit issues.

Choosing a third-party supplier can be time consuming and daunting as the available options and the number of supplier options continues to grow substantially. For instance, OnDemand has placed over 25,000 business accounts into third-party options utilizing over 18 different third-party suppliers. Consumers can have the luxury of an energy expert walking them through the myriad of different supplier options, and maximizing the leverage that OnDemand provides in negotiating a third-party supply contract on our client’s behalf.

Your local electric utility will continue to handle all issues related to power outages and power restoration. In deregulated states, the local utilities do not care who you use for generation services, the local utility is still mandated by state law to provide distribution services to all consumers in a reliable fashion.

Your local utility will continue to provide the distribution services (poles and wires) to your home or business, and the local utility is still regulated by the State Public Utility Commission. There will be no difference in the quality, reliability, or the maintenance of your electric service.

Your supplier will answer billing questions relative to the supplier charges, while the utility will answer questions regarding distribution charges.

Depending on your meter read date, delivery can begin anywhere from 2 to 4 weeks. Actual supplier charges typically vary between 1 to 2 meter cycles or from 6 to 8 weeks.

Typically, your supplier will notify your utility on your behalf; you will not need to contact the local utility.

Price to compare (PTC) is the price per kilowatt hour (kWh) that your utility charges for generation and transmission. PTC is sometimes referred to as your shopping credit, and is the price you would pay the utility if you do not choose a third-party supplier. Increasingly, the PTC's from local utilities are changing frequently (30 to 90 days) and the volatility in the PTC's has even been greater than the normal “market” volatility.

POLR is defined as the Provider Of Last Resort. In deregulated states, typically the local utility is providing the POLR, or default rate, for those who choose not to shop for a third-party solution.

Deregulation is the reduction of government power in the electric industry with the intent to create competition within the industry. Deregulation empowers retail customers with the ability to purchase their power from independent, third parties instead of the incumbent electric utility.

A Letter of Authorization (LOA) is a prerequisite to shopping on behalf of a retail customer. An LOA is also required to obtain usage data from your local utility so that suppliers can price a retail energy contract. LOA's should not be binding documents, but merely a first step in the shopping process, and the binding agreement eventually occurs when a retail client chooses and signs a third-party energy contract.

An electric supplier is a company that provides the generation portion of your electric bill (and, in some states, the transmission portion as well). In deregulated states, consumers have the freedom to shop for their generation portion of the electricity bill for either a longer term or at a lower rate than what is typically provided by the local utility. When you shop for an electric supplier, you are choosing the company that will provide the rate for the generation portion of your bill.

Businesses and homeowners who reside in a deregulated state are eligible to shop for third-party solutions (unless your home or business is located in a municipal-owned utility or some other rural electric cooperative). OnDemand currently helps consumers choose a third-party supplier in Pennsylvania, Ohio, Maryland, Texas, California, Illinois, Michigan, New Jersey, New York, Delaware, Connecticut, Massachusetts, and the District of Columbia.

Although this varies from supplier to supplier, you may have the option to choose between single, consolidated or dual billing. In many instances, especially when signing a fixed price type of contract, you will continue to receive just one bill from your local utility. An energy consultant can help you understand your billing options.