If you live in a state with a deregulated energy market, you may have the option to choose your electricity or gas provider. But for many people, the difference between an energy supplier and a utility company is still confusing. Understanding how these two entities work can help you make better decisions when managing your energy costs or switching plans.
A utility company is the organization that delivers electricity or gas to your home or business. They own and maintain the infrastructure like power lines, poles, transformers, and gas pipelines. Utilities are usually assigned to a specific region and customers cannot choose their utility. Even if you switch providers, your utility company will stay the same because they are responsible for delivery and maintenance, not the actual energy supply.
An energy supplier, also known as a retail energy provider or third-party supplier, is the company that sells you the electricity or natural gas itself. In deregulated states, you can choose your supplier based on the rates, contract terms, and energy sources they offer. Some suppliers specialize in 100 percent renewable energy plans, while others focus on fixed-rate contracts for price stability.
The key difference is in their role. The supplier handles the price and terms of the energy you use. The utility handles the delivery, reliability, and repairs. For example, if there is a power outage or a gas leak, you still call your utility, not your supplier. But if you want to switch to a green energy plan or get a better rate, you talk to a supplier or an energy broker.
Another important point is your bill. In many cases, you still receive one combined bill from your utility company, even if your energy comes from a different supplier. The bill will show a breakdown of charges, including supply charges from the provider and delivery charges from the utility.
Choosing the right supplier can help you save money or meet sustainability goals, but it's important to compare offers and read the contract carefully. Meanwhile, your utility remains the same and ensures that the energy arrives safely to your location.
In summary, think of it like this: your utility is the road, and your supplier is the vehicle. You can choose the vehicle that best fits your needs, but the road stays the same.