You may have recently seen offers or even representatives talking about switching to another energy company in order to save money. Many people are — understandably — not sure what this means or what these third-party energy companies have to offer. But the idea of saving money on energy bills is always an attractive one, so it’s normal to be interested, too.
However, switching energy companies does come with certain caveats, and the immediate benefits don’t always match the long-term costs. Some are even outright scams! It’s not a decision that anyone should make rashly: Here’s what you need to know about these energy companies and if switching makes sense.
Third-Party Energy Companies
These are energy service providers that are, essentially, looking for new customers. The companies are competing very intensely with other similar energy companies in their areas. The problem is that, to the average consumer, all energy is basically the same — electricity flows into your house, and you pay for it. There’s not really a way for one company to promise “better” electricity than the others in most cases.
So, these third-party companies focus instead on promises about prices and the money that customers can save. In fact, some salespeople outright lie in order to make people switch!
Should You Switch to a Third-Party Company?
You can certainly research a switch yourself, and look into exactly what it would cost you, and what other customers are saying about your alternatives. But that’s all information that you should look up on your own. Never switch to a new energy company because a sales representative is talking to you about it.
In fact, it’s a good idea to avoid talking to people who claim they are from a power/energy company altogether. Some of them may be lying about where they are from. Some are scammers that will ask to see your energy bills and illegally sign you up for new services; a process called slamming.
Then there’s the issue of pricing. Generally, whatever an energy salespeople promises cannot be guaranteed. Third-party energy companies, in particular, are notorious for promising to keep rates the same and then tripling or quadrupling them later.
Why Third-Party Energy Companies Exist In Your Area
Many third-party companies arise in areas due to changing markets or new deregulations that allow for more competition in the energy industry. In theory, this sort of competition is good, but in practice, it’s led to several problems: Notably, government regulations kept energy costs carefully capped in the past, but these caps may no longer exist in some areas or may not apply to third party companies. As a result, these companies will often raise their rates to become more profitable, no matter what was said to customers.
Interested in learning more about heating and cooling topics, or what’s happening in the energy industry that could affect you? Check out the Buckeye Heating and Cooling blog, where we discuss information you should know and how to save money on heating and cooling in everyday life!