Pros and Cons of Third-Party Energy Suppliers

Today, finding an energy supplier is very different from how it used to be. Previously, you had one option: the local utilities company. Now, times have changes. Due to deregulation, people have the ability to choose which company is best for their home or business. Because of this freedom, third-party energy suppliers have begun appearing to compete with the standard utility companies. But what IS a third-party supplier, and what are the benefits and drawbacks of choosing them over the big standard companies?

Diversity in Energy Plan Choices

Standard utility companies generally offer energy as a variable-rate plan agreement. This means that as the cost of energy fluctuates, so does the amount you pay. This can be good if the market is low, but when prices rise, so do your bills.

Third-party energy suppliers, by contrast, offer what’s known as a fixed-rate energy plan, meaning that the rate you pay for energy is locked in at the start of your contract, which ranges from 6 months to 3 years, and no matter what the market does, your rate doesn’t change. This can be positive or negative; if rates plummet immediately after you sign the contract, you’re stuck paying more than everyone else. On the other hand, if rates skyrocket, you save huge amounts of money on energy.

Innovative Energy

Since third-party energy suppliers are generally smaller, newer companies, their business practices are not restrained by traditional utility companies. Having the freedom to explore new methods of operation, these new suppliers can offer renewable energy sources that your local utility company can’t provide. However, research and advancement come at a price; you will often pay more for some of these new supply methods than traditional utilities.

Less Regulation

Because third-party energy suppliers are independently run, they are subject to far fewer federal regulations. This can either be a good or bad thing, depending on the way the company is run.

Most third-party energy suppliers use their freedom from regulation to decrease their prices, since they don’t have to follow any unnecessary rules that may tack on extra charges. Since they are smaller companies with less attention on them, they tend to work harder to keep their customers happy by lowering prices based on their larger competitors.

However, not all third-party energy suppliers use their freedom from regulations for good.  Some companies take advantage of the smaller overhead and raise their prices whenever and however they see fit, which is something that heavily regulated utility companies cannot participate in.

Energy suppliers have a newfound freedom with deregulation coming into effect across the country. Because of this, buyers will need to be more aware of the changes and capabilities of energy suppliers. You need a professional to help guide you along the way; turn to UEA to make the right energy decision every time! Give us a call today at 717-889-5706, or send us an email at We look forward to hearing from you!