How to Analyze an Offer

In states and regions where energy competition is encouraged, suppliers set themselves apart by the programs, rates and incentives they offer. Therefore, when shopping for an energy supplier, you may come across as many types of offers as there are suppliers. Before making any decision, you should be sure that you thoroughly understand the terms you are being offered. Remember, while price is important, it is not the only aspect of an offer you should consider. Different services and incentives should also be closely considered. Below are some guidelines to help you work through the process.

What you should know and do before choosing a competitive energy supplier

Make sure that the supplier you are working with is on the state-approved list or has been certified or licensed by your state. As always, gather as much reliable information as you can about the supplier before committing.

When evaluating competitive supply offers, you should consider:

1. Offer Terms

  • Does the supplier offer a fixed price, variable or both?
    A fixed price will guarantee you a specific rate for a set period of time. Whether the market price is lower or higher at any given time will not affect the price you are paying. A variable price moves due to market fluctuations and other factors. This means that your price may go up or down over the life of your contract term.
  • If the price is fixed, for what period of time is that price guaranteed?
  • If the price is variable, how often does it change (seasonally, monthly, by day of the week, or time of day)?
    Usually, the prices truest to current market prices are those that vary most frequently; however, that does not mean that they are always the cheapest.
  • Are there limits to the percentage that your rate can increase over a specific period of time?

2. Contract requirements

  • What is the time period during which the agreement remains in effect?
  • Does the agreement automatically renew, and if so, how much notice must you give for termination?
  • Will you have an opportunity to review the renewal agreement before making a decision?
  • If you choose to change suppliers, how long do you have to cancel if you change my mind?
  • Is there a cancellation fee – either during or after the initial cancellation period?

3. The source of the electricity or natural gas

  • Where does the supply come from?
  • For electricity, what is the fuel or energy source, and what is its environmental impact?
  • Can you purchase your energy supply from renewable sources (e.g., wind, solar, geothermal), and if so, what is the price difference?

4. Billing method

  • When will your first bill arrive?
  • How many bills will you receive each month and from whom?
    You should ask whether or not your supplier and utility will be sending separate bills.
  • How quickly is payment due?
    Some companies may offer a “grace period”, which is a period of time after the payment due date where no late fees will be acquired
  • What forms of payment will the supplier accept? Cash, check, electronic funds transfer or credit card.
  • What if you can only pay part of the bill?
  • Is there a late payment fee?
  • Is there a budget plan?
    Budget plans may help you manage your energy bills by offering one flat rate each month, as opposed to different rates in different months. The company determines your payment by how much energy your household is expected to use, and then dividing that by the number of months your payments will be spread over.

5. Customer service

  • Is there a local business office?
  • Whom do you call if there is a service interruption or a billing dispute?
  • Are service and billing calls toll-free?
  • What are the hours during which you can call?
    Some companies offer 24-hour customer service, however some do not. You will want to know this before the time comes when you need to call.
  • Will personal information (name, address, phone number) be released or sold to a third party?

Additionally, here are some helpful questions to ask your utility:

How will switching to a new energy supplier affect your participation in any special programs offered by your utility? (e.g., budget billing, energy efficiency or outdoor lighting.)

After switching to a new supplier, if you decide to return to the utility, how long must you wait before you can switch to another supplier?

How long will it take to switch from your current supplier to a new supplier? Is there a waiting period?

Ready to shop?

After you receive and review an offer, or visit the state-by-state links webpage to see if your state offers natural gas and electricity choice, visit the “shopping” site for your state to compare offers. These sites include, and