Retail Energy Choice

Why RESA Supports

Energy Choice

Did you know that when you choose a competitive supplier, you will still have that energy delivered by your traditional utility company? As a consumer, when you elect and authorize the competitive energy supplier to provide your service, the reliability of your service will remain the same. The local utility company will continue to be responsible for any power outages experienced or other emergencies.

Like choosing a cell phone service provider, selecting a competitive energy supplier requires a contract between you and the supplier. Be sure to read and understand all the terms and conditions of your contract.

There are several ways to enter a contract with a retail electric or natural gas supplier, such as:

  • Enrolling online and accepting contract terms and conditions electronically
  • Signing a written contract
  • Providing a recorded verbal consent (also known as third-party verification)

While it can be as easy as contracting through one of the three methods above, keep in mind that written contracts, especially those that result from direct solicitation, sometimes also require third-party verification for your protection.

Consumers Should Have a Choice

  • Competitive retail energy suppliers sell electricity and natural gas in regulated energy markets to residential, commercial and industrial end-use customers. Retail energy competition stimulates innovation and empowers consumers to seek value for their energy dollar but can only occur in states where policy makers have acted to end the more than century-old practice of protected monopoly utility price regulation.
  • Competitive energy markets are better for consumers. Unlike monopoly-protected and government price-regulated utilities, competition among energy suppliers provides products and services tailored to individual customer needs while providing access to competitively priced electricity and natural gas.
  • Competition means costs remain reasonable. Increasing numbers of residential, business and industrial customers recognize the benefits of competition and choose to shop for electricity and natural gas.

How Retail Energy Competition Works

The electricity and natural gas bill that retail energy customers receive consists of three main costs – transportation, the distribution of the energy, and the energy itself (which is typically the largest contributor to the ultimate price customers pay).

In states that allow customer choice for electricity and natural gas, the pipes and wires that deliver the energy to retail customers (the transportation and distribution costs) are still owned and operated by traditional monopoly-protected utility companies. Those costs are still price regulated, and the utilities receive rates reflecting their costs plus a reasonable profit. It is the energy commodity – the electric energy or natural gas – that is competitively priced.

In states with retail competition, customers still receive one bill for their electricity and natural gas, but they have a choice of competing retail energy suppliers vying for their business. This is driving economic value for the customer’s energy dollar and innovation in pricing and services that did not occur under monopoly-protected price regulation.

How Retail Energy Competition Works
Retail Energy History

Frequently Asked Questions

Retail energy competition is the ability for consumers to choose their own electricity or natural gas provider based upon individual needs and preferences. Retail energy competition stimulates innovation and empowers choice but can only occur in states where policymakers have acted to end protected monopoly utility price regulation.

Standard electricity and natural gas bills consist of three main costs:

  • the transportation of energy
  • the distribution of energy 
  • the cost of the energy itself

In states that allow customer choice, the transportation and distribution costs are still owned and operated by traditional monopoly-protected utility companies. It is the energy commodity, whether electric or natural gas, that is competitively priced. In states with retail competition, customers still receive one bill for their electricity and natural gas, but they have a choice of selecting their energy supplier.

The fundamental difference is that a competitive market allows customers to shop for their supplier, while a regulated market dictates what utility consumers must use. These monopoly-protected utility companies do not foster the same innovation and have little to no incentive to cut costs.

Competitive retail energy suppliers sell electricity and/or natural gas in regulated energy markets to residential, commercial and industrial end-use customers.