How Switching Electricity Suppliers Works
How switching electricity suppliers works
Switching electricity suppliers is one of the least understood parts of deregulated energy markets. Most eligible households have never switched because the process is poorly explained, not because it is complicated. The enrollment involves three parties, takes a few weeks to process, and results in a single line-item change on your existing utility bill. Your utility stays the same, your power stays on, and no one visits your home.
What happens when you switch
- Three parties are involved: You (or a service like Arbor acting on your behalf), the electricity supplier, and your utility.
- Your utility stays the same. Delivery, outage response, meter reading, and billing do not change.
- Only the supply rate changes. One line item on your bill reflects the new supplier's pricing instead of your utility's default.
- Your power stays on. There is no gap in service at any point during the process.
- The switch takes one to two billing cycles. You continue paying your current rate until the new one takes effect.
Who can switch electricity suppliers?
Households in deregulated states where retail energy choice is available can switch suppliers. The utility account must be in your name, and your utility must support third-party supplier enrollment. Both homeowners and renters qualify. Renters whose landlords include electricity in rent cannot switch because they do not hold the account. Arbor operates in 12 deregulated states across the Northeast and Midwest.
How the switching process works
You select a plan and authorize the enrollment, either through a supplier's website, by phone, or through a broker like Arbor. The supplier then submits the enrollment to your utility. Your utility processes it on its standard billing schedule, and within one to two billing cycles, the new supply rate appears on your regular utility bill. The entire process typically takes 4 to 8 weeks from start to finish.
During the transition, you continue paying your current rate. There is no double-billing, no service gap, and no second bill. Your utility remains the single entity that sends your bill and collects your payment. Once the new rate takes effect, the only difference is the per-kWh supply charge and the supplier name on that one line item.
When you use Arbor, the process is even simpler. Arbor analyzes your current rate, identifies lower-cost fixed-rate plans, and submits the enrollment on your behalf. You do not need to research suppliers, compare contract terms, or contact your utility.
What changes on your bill and what stays the same
What changes: The supply charge. This line item, sometimes labeled "generation charge," "energy charge," or "supply charge," will show the new supplier's name and per-kWh rate instead of your utility's default.
What that looks like in practice:
The average U.S. residential electricity rate is approximately $0.18/kWh, according to U.S. Energy Information Administration data. Supply charges account for roughly 40-60% of that total. A household paying a default supply rate of $0.10/kWh that switches to a competitive supplier at $0.07/kWh saves $0.03 on every kWh consumed.
Delivery charges, taxes, and fees remain the same in both scenarios. Only the supply line item changes.
What stays the same: Everything else. Delivery charges, transmission charges, customer fees, taxes, your account number, your payment method, and your due date all remain identical. Outage response, meter reading, and service quality are unaffected because your utility still manages all of those functions. You will not receive a separate bill from the new supplier.
Is switching safe? What if something goes wrong?
Switching is a routine, regulated process. Your utility verifies every enrollment before processing it, and state utility commissions prohibit unauthorized switching (known as "slamming"). If an enrollment is submitted with incorrect information, your utility rejects it and nothing changes on your bill.
Most states provide a rescission period of 3 to 7 business days after enrollment during which you can cancel without penalty. After that, you can still switch to a different supplier or return to your utility's default rate at any time. There is no processing fee to make a change. The only potential cost is an early termination fee if you leave a fixed-rate contract before its term ends.
Arbor does not require Social Security numbers or credit card information to initiate a switch and reimburses early termination fees in certain situations.
Arbor is a licensed energy broker registered with state utility commissions in every market it serves, subject to regulatory oversight and consumer protection standards.
What to know when your rate term ends
Fixed-rate supplier contracts run for a set term, typically 6 to 24 months. When the term ends, most suppliers automatically roll you onto a month-to-month variable rate that can be significantly higher. This is the most common way customers end up overpaying again after a successful switch.
To avoid this, track your contract expiration date and compare available rates before the term ends. Or use Arbor's Autopilot, which monitors contract expiration dates and market conditions automatically, then identifies competitive fixed-rate alternatives before your current plan expires. Customers who use Autopilot avoid the rate lapse that catches most manual shoppers.
Check your current plan or let Arbor handle it
Whether you have never switched, are on a default rate, or have a contract approaching expiration, the next step is the same: check what you are currently paying and see if a better rate exists.
You can do this yourself by pulling up your latest bill, finding the supply rate, and comparing it against available plans in your utility territory. Or you can let Arbor do it for you. Arbor checks your rate, compares it against competitive fixed-rate plans, handles the enrollment if a better option exists, and monitors your contract going forward so you never roll onto an expensive variable rate without knowing. The service is free, takes minutes to set up, and works for both homeowners and renters in deregulated markets.
Switching electricity suppliers FAQs
Will I lose power if I switch suppliers? No. Your power stays on throughout the entire process. Switching changes a rate on your bill, not the delivery of electricity to your home. Your utility continues handling delivery, outages, and billing without interruption.
Do I get two bills after switching? No. Your utility remains the single billing entity. The new supplier's rate appears as a line item on your existing utility bill, replacing the utility's default supply charge.
Can I switch back to my utility's default rate? Yes, at any time. There is no fee from the utility to return to the default rate. If your current supplier contract includes an early termination fee, that fee may apply.
Can renters switch suppliers? Yes. Renters who pay their electricity bill directly to the utility have the same switching rights as homeowners. No landlord approval is needed. Renters whose electricity is included in rent cannot switch because they do not hold the utility account.
Can I switch if I am already in a contract? Yes, but check your current contract for an early termination fee. If projected savings from a new rate exceed the fee, switching may still make financial sense. Arbor factors ETFs into its recommendations and reimburses them in certain situations.
Is there a fee to switch? No. Neither your utility nor your new supplier charges a processing fee to switch. The only potential cost is an early termination fee on an existing supplier contract.
How do I know the switch actually happened? Your utility sends a confirmation when the change is processed. You can also check your utility's online portal for the current supplier of record, or review the supply line item on your next bill after the switch date.
Learn more about saving on electricity
Related resources:
- Is Arbor legit? Safety, savings, reviews, and how Arbor works
- Where does Arbor work? Service areas and supported utilities
- Electricity savings and market insights
- Compare electricity rates
- Understanding your electric bill
- Arbor reviews
