Here’s what you need to know about moving to a deregulated state

It’s hard to believe that there can be such a difference when moving to a different location within the same country. However, in a place as big and diverse as America, moving from one state to another can be like moving to a different planet.

If you’ve lived in a regulated state up until now, moving to a deregulated state can be an adjustment. Here’s what you need to know about moving to a deregulated state.

What is Deregulation?

In a nutshell, deregulation removes barriers surrounding energy supply, creating a competitive market. Energy providers have more freedom and flexibility regarding their pricing strategies and offerings. In a regulated state, consumers have little freedom to choose as energy supply is often a monopoly.

Deregulation has a lot of benefits for consumers, who can pick and choose energy plans based on their consumption and budget. Deregulated states include Texas, California, Delaware, Maine, Massachusetts, Michigan, New Hampshire, Oregan, Rhode Island, Virginia, New York, New Jersey, Ohio, Illinois, Pennsylvania, Connecticut, Maryland, and DC.

Choosing an Energy Plan

When you move to a deregulated state, you have to choose an energy provider and plan. In some states, there are services that make this choice easier by offering a comparison matrix. Texas, for example, has https://texaselectricityplans.com/ to simplify the decision-making process. Use a similar service or compile information about individual providers in your state.

Things to Look for in an Electricity Plan

Deregulation can help you save a lot of money on power – if you know what to look for. Here are some key things to consider when evaluating electricity plans:

Price

As previously mentioned, a deregulated energy market means more price options for the consumer. You can choose a package based on your usage. Of course, doing so means that you need to understand your current usage and make an educated estimate of what you’ll use in your new home.

Many energy providers offer rebates and discounts for staying within a certain usage threshold. If you’ve got an eco-friendly spirit, looking into these options can be a great way to reduce your carbon footprint (and your energy bill). You can also look for providers who use renewable energy sources, like solar power or wind.

Fixed-Rate vs. Variable-Rate Plans

Fixed-rate and variable-rate energy plans are similar to mortgage terms. In a fixed-rate plan, you lock into a specific rate for a term. When you choose a fixed-rate, it doesn’t matter how much the market fluctuates; you pay the rate whether it’s higher or lower than the market rate.

With a variable-rate plan, you pay the market price. This can work in your favor if the market is steady. However, if there’s any market volatility, it can cost you a lot of money in the long-run. If you choose a variable rate, be sure to get an understanding of the state economics first.

Term-Length

Generally speaking, longer-term plans are made to save you money over time. However, if you’re unsure how long you’ll be in the area or want to get a better idea of your usage before locking in, go for a shorter term to start.

While the longer-term plans usually offer lower rates, there can be hefty fees for canceling early.

Ending Your Term

When living in a deregulated state, it’s important to be aware of the impending end of your energy provider term contract. Most providers are obligated to give you 30 days’ notice before your contract ends. At this time, you can either:

  1. Look for a new energy provider;
  2. Choose another plan with your current provider; or
  3. Let your provider default you to another plan.

To be a smart consumer, you’ll want to avoid option three at all costs. Many energy providers will default you to a plan that works best for them rather than you.

When you move to a deregulated state, it’s important to add choosing an energy provider to your priority list. Don’t hesitate to talk to people in your new area for recommendations.