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Energy Choice | August 23, 2012

FAQ Spotlight: What’s the difference between an energy supplier and a utility?

For years, all of our energy services were provided by a single source – our electric utility company. That company would be your sole point of contact for both power outages and billing inquiries. However, in recent years many states have developed competitive markets, which allow energy suppliers the opportunity to compete with each other and offer customers different options when choosing a pricing plan.

What should you look for when deciding to use a supplier or utility? Below, we’ve outlined some key distinctions between both types of businesses.

The Utility

Utilities are responsible for the transmission and distribution of energy, most commonly electricity, to your home. During or after severe weather, the downed power lines and transformers that you may encounter are under the responsibility of your local utility. Your local utility is also responsible for handling emergency situations, such as power outages. So, be sure to have their number readily available. It’s also worth noting that your local utility is responsible for the frequency that your electricity meter is read.

In certain markets, a utility has a monopoly on delivering electricity to you via its distribution system, whether the electricity is sold to you by the utility or by another electric supplier.  This is done to keep the infrastructure cost low by not having to maintain multiple distribution systems.

The Supplier

In a competitive market, the supplier can provide you with pricing options that more closely reflect the current market. Although this “competitive supply” is still in its infancy, customers are already reaping customer service, product and technological innovation benefits by choosing a pricing plan from suppliers.

Additionally, suppliers can work with you to help discover energy efficient solutions for your home, which can include green options.

Constellation acts as a leading competitive supplier of power, natural gas and energy products and services across the U.S. and Canada.

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