If you’ve never heard of third-party energy suppliers, it’s important to learn about these companies and how they sell energy. These suppliers will offer extra-low prices on energy, but things may not be as they appear. Here’s what you need to know.
The Third-Party Energy Supplier
A third-party energy supplier is a sort of go-between company. They buy energy from large utility companies and then sell that energy again to consumers at different rates. Why do these third-parties exist, especially when you can buy energy directly from utility companies? The answer is a little complicated, but many of these companies try to entice average consumers by offering them better energy deals than they currently have. For example, they might say, “Why keep paying 12 cents per kWh when we can buy the electricity and sell it to you for 10 cents?” Sounds pretty good, right?
Because their business typically depends on these kinds of deals, third-party energy suppliers are much more interested in selling and marketing than true utility companies. They may approach residential homeowners, landlords, and other companies to offer these deals.
Why These Deals Are a Problem
These third-party companies sell energy via contract, and that poses a big risk to consumers. First, that contract may lock you into a multi-year deal with a steep termination fee, so you can’t back out. Second, these contracts may allow the seller to suddenly raise prices at any time, even when you really need heating or cooling. That discounted rate that you signed up for may vanish into a fee that’s much higher than you would have paid the utility company!
Ultimately, a poor deal like this can cost you a lot of money without saving on anything. In fact, reselling such as this tends to depend on raising prices to make a profit. Because of practices like these, it can be difficult to trust these sellers — and it’s always very important to read the fine print before you sign any contract, especially contracts like these.
When Should I Be Wary of These Third-Party Sellers?
Third-party energy suppliers are typically controlled by state law. Currently, in Ohio, they are allowed to operate, so they may try selling to a variety of consumers. Note that if you live in an apartment or similar arrangement, then you might not have any control over who you pay for energy. If your lease requires you to pay utility bills, it’s a good idea to see who the landlord gets energy from!
Want to learn more about heating and cooling, prices, and how to save money on your utility bills? Contact us at Buckeye Heating & Cooling to get started. Don’t forget to check out the rest of our blog for helpful tips throughout the year.