Is switching electricity provider safe? What actually happens

Many Americans have never switched electricity provider, and many cannot: in most states the local utility is the only seller. If you live in a choice state and have been putting it off because it sounds risky, here is what really happens, using Texas and Pennsylvania as the worked examples because their rules are the most detailed.

Can you switch at all?

Retail choice is a state decision. Households can pick a supplier in Texas, Pennsylvania, Ohio, Illinois, New York, New Jersey, Maryland, Delaware, Washington DC, Massachusetts, Connecticut, Rhode Island, New Hampshire and Maine, and Michigan runs a small capped program. Delaware opened the supply side of the bill to competition in 1999; Washington DC began full electricity choice for residents in 2001, according to its Office of the People’s Counsel. In Maine, anyone who makes no choice stays on Standard Offer service, with the rate set through a bidding process at the state utility commission.

Everywhere else, including most of the South and West, you cannot switch. That is not a dead end: our guide to lowering your electric bill is written for every state.

Two companies, one bill

Your service has two halves. The utility (Oncor, CenterPoint, PECO, ComEd, Pepco and so on) owns the poles, wires and meter, restores outages and is fixed by your address. The supplier, called a retail electric provider in Texas, sells you the energy and sets the price per kWh. Switching changes only the supplier. As DC’s consumer advocate puts it, your energy is still delivered by the same utility.

So nobody comes to your house, the meter stays, and if a storm knocks out power you call the utility, the same as before.

How the switch happens

You sign up with the new supplier, and it sends the switch request. In Pennsylvania, the PUC says accelerated switching rules mean the change can likely happen within three business days of the utility being notified. In Texas the provider submits a standard switch unless you ask for a specific date. You do not need to cancel with the old supplier yourself, though you should check whether leaving early costs a fee.

The rules also protect you from switches you never asked for. In Texas a contested switch is presumed unauthorized unless the provider can prove you authorized and verified it, whether you signed up by phone, online or at the door.

Changing your mind

Every choice state has a cancel window. Two examples in detail:

• Texas. When you switch, you have 3 federal business days after receiving the terms of service to cancel without any fee. This right does not apply to a move-in, so read the terms carefully when you start service at a new home.
• Pennsylvania. You have 3 business days from receiving the written disclosure statement, and the right cannot be waived. You can cancel in writing, by phone or electronically.

Other choice states set their own periods, so check the rule for yours before you sign; our switching guide lists several.

Exit fees and their limits

Fixed-rate contracts often carry an early termination fee, but the law puts a fence around it. In Texas no fee may apply in the 14 days before the contract end date, or if you move and give a forwarding address, and your provider must send at least three expiration notices in the final third of the contract, the last one at least 30 days before it ends. In Pennsylvania early cancellation fees do not apply in the last 30 days of your contract, and if you ignore the renewal notices you stay month to month with no termination fee, most likely at a different rate. Pennsylvania also lets you return to the utility’s default service by asking the utility.

If your provider goes under

Texas has no utility default plan, so this is the fear people raise most. The answer is the provider of last resort. If a retail provider stops serving customers, defaults or loses its certification, ERCOT moves all its customers to designated last-resort providers, and service starts as soon as the transition completes. Your lights stay on. You can then pick a new provider on Power to Choose or by calling 1-866-PWR-4-TEX. Check the rate you have been moved to, because it may not be a bargain.

Pushy sellers and how to spot them

Most complaints start at the door or on the phone. Be wary of anyone who asks for your utility account number before you have seen a written offer, claims to work for your utility, or promises savings without showing the price per kWh and the contract length. In Texas, look for the Electricity Facts Label; in other states, the disclosure statement. Then compare the rate with your utility’s price to compare or with the state’s official shopping site.

Where to complain for free

Start with the supplier. If that fails, your state utility commission takes complaints: in Texas the Public Utility Commission, in Pennsylvania the PUC (its PA Power Switch site lists 1-800-692-7380), and in the other choice states the commission or the consumer advocate’s office.

Switching is ordinary

In the competitive parts of Texas, every household picks a retail provider; there is no utility plan to fall back on, so choosing is simply part of moving in. If you are ready, you can compare offers for your ZIP code, and a free contract alert will remind you before a fixed rate runs out.