How to choose an ESCO – Part 1Most people cringe at the prospect of getting their monthly energy bill, especially after a long hard winter or a scorching summer. Well you do realize you are not restricted to your current utility or provider and the prices they charge right? With energy deregulation comes the power to choose and countless of Energy Service Companies (ESCOs) vying for your business.

With that said, “How do I choose the right ESCO”? Here are a few questions and answers to help you navigate through the sea of options.

What are the signs of a quality ESCO?

Here are the top three things that we recommend people look for:

  • Certification: The energy supply company must be a certified business registered in the state they are servicing.
  • Services offered: They must offer various options for electricity and natural gas supply like fixed- and variable-rate billing options. It’s all based on what you’re looking for as a customer.
  • Financial Stability: Although price and service important features to consider, the financial stability of the chosen supplier should be just as important. Look for a company that is doing well and has been around for a while.

What energy customers make the best fit for an ESCO and why?

Residential, small business and large commercial or industrial entities are all good candidates for an ESCO​ – basically anyone who wants to take control of their energy bill and bring down utility costs.  But to take advantage of an ESCOs offerings, your state must be deregulated. You can see a map of deregulated states here.

In what instances should a consumer consider switching to an ESCO?

There are many reasons why consumers should choose an ESCO, but a big one is cost. The whole idea behind deregulation of electricity and natural gas industry is to increase competition and reduce prices. Consumers who are able to choose the cheapest option available can save, on average between 5 – 10 percent depending on the ESCO they choose.

What are the advantages of getting your energy supply from an ESCO over a conventional utility?

ESCOs can afford to provide cheaper energy costs because they can leverage their purchasing power to buy large amounts of energy at a fixed rate. The utility, on the other hand, doesn’t plan for price fluctuations, which leads to high variance in energy prices over the calendar year.

Additionally, many ESCOs also provide fixed-rate plans which allows customers to lock in one rate for a specific time period. If you don’t want to chance it with variable rates or you live on a fixed income like many retired and elderly consumers, fixed rate plans can make budgeting easy and predictable.

Stay tuned for part 2 of our “How to Choose an ESCO.”