May 30, 2024

How to safely switch your business electricity supplier

Most business owners have enough to do. So when it comes to switching to a different electricity supplier, it’s understandable that you might be concerned about the time and resources it will take. The good news is that while switching electricity providers sounds like a big lift, it’s actually a fairly simple process. 

There isn’t much, if any, risk to businesses who choose to switch providers, and there should not be any interruption in your service. It can be very similar to changing your cell phone plan or cable TV package. In many cases, switching electricity providers is as simple as checking out your options, choosing the contract terms that fit your needs, and making the switch.

Here’s how to do it.

Step 1: Confirm your business is able to switch electricity suppliers

To start, take a look at your current contract terms – switching while under contract could result in fees. Then, determine whether your business has the option to switch retail electricity providers. The ability to switch typically depends on which state you live in, and whether that state has a regulated or deregulated electricity market. 

There are varying levels of deregulated markets across the country, but in states like Illinois, Ohio, Pennsylvania, New York, New Jersey, Maryland, and Massachusetts, Texas, Maine, Delaware, Connecticut, and Rhode Island, consumers can choose an electric supplier without restriction. And in New York, New Jersey, Texas, and Massachusetts you can switch to David Energy – we’re one of those suppliers! 

The principle that drives market deregulation is giving consumers choices in their power suppliers. But you don’t have to worry –“deregulated” is not the same as “unregulated”, and retail electricity suppliers in deregulated markets still have to abide by certain rules to ensure they’re licensed and qualified to supply your power. 

Step 2: Learn the difference between your electricity supplier and your utility

If your business is located in a state with a deregulated power market, you’ll want to make sure you know the difference between two important terms: Supplier, and utility.

  • Supplier: An electricity supplier sells retail consumers (businesses, households) energy. That energy is sent to you via a local utility’s infrastructure (such as power lines). 
  • Utility: A utility owns and operates the power lines and other infrastructure that enables the electricity to be delivered to you. While states with deregulated markets offer multiple suppliers to choose from, your utility is determined by your location and isn’t typically something that you can control. 

Step 3: Choose a supplier, rate type and term length

Now that you’ve got the basics down, it’s time to select a supplier and figure out what sort of contract makes sense for your business.

Choosing a supplier and a contract isn’t too different from selecting a plan or contract for another service, like your cell phone plan. But there are a few key things specific to energy that you’ll want to look for when determining which plan is right for your business.


First, start by seeing which  suppliers are available in your business’ area. There may be many or there may only be a couple, depending on the competition in your local market. For instance, if you were to look for available electric plans in New York, you might see numerous plan options from a single supplier, and with varying term lengths and rate types. The same could be true in parts of Texas, New Jersey, or other states.

Your choice in supplier may also hinge on personal preference. You might want to consider a supplier who can help you go green with electricity generated from renewable sources, or look for a company who offers additional value beyond rates and contract terms. For example, David Energy has a team of electricity experts available to advise you on things like  standard operating procedures to optimize usage, lowering bills through demand response programs, and more. These are investments we’ve made in order to reduce headaches and stress for customers, so that you can focus on running your business.

Rate type

How and what your business pays for electricity can vary. Perhaps the two most common types of energy products offered by electricity suppliers are fixed and variable-rate plans.

  • Fixed rate plan: Energy prices are fixed for the duration of your contract. Accordingly, you will pay a more predictable cost for energy under a fixed-rate plan. But depending on the specifics, a fixed rate contract may also see prices that vary at different parts of the day.
  • Index, or variable, rate plan: Energy costs under indexed plans are subject to the market rate for electricity, which means the rate you pay can fluctuate. This option has pros and cons, as you may end up paying a lower rate during times when market prices decrease, but higher rates when they go up. 

Some suppliers may also offer hybrid plans. David Energy’s hybrid plans can fix or float rates based on certain components and overall capacity levels in the market, allowing you to take advantage of the best parts of both fixed and index plans.         

Term length

Business owners should also keep the length of their contract in mind. Suppliers often offer a variety of lengths, and depending on the specifics of your operation (is it seasonal? Are you planning on moving locations relatively soon?), it may be worth weighing your options for shorter or longer contracts. 

Not sure what term length makes sense? Suppliers such as David Energy can monitor the broader electricity market and help select the option that best suits an individual business. While it may make intuitive sense to sign up for a fixed rate plan to try and hedge some risks, note that energy prices could move down in the future just as much as they could move up – so you could consider a shorter term that lets you make adjustments later. Working with an expert can help you evaluate current conditions and where the market may be headed, to make an informed decision about the best contract options. 

Step 4: Execute the supplier switch 

With your selection made, the next step is to execute the supplier switch. 

That generally includes signing a letter of authorization (LOA) with your new supplier. From there, they’ll handle the rest. Depending on your specific city and state you may have a bit more paperwork, but typically a supplier handles all the back-end changes once you sign on with them – making the entire process quick and seamless. Just remember to make sure that your business isn’t locked into a contract with another supplier before you get started, and if you are, evaluate if any termination fees are worth it for the savings you can get when you switch. 

So when you decide to work with a supplier like us at David Energy, it’s simple and straightforward. That letter of authorization allows us to contact your utility company and inform them of the switch – from the customer’s end, you’re all done! 

Enjoy the benefits of your new supplier!

As you’ve learned, switching electricity suppliers is a fairly straightforward process for businesses in deregulated power markets. 

After you’ve gone through the process to make the switch, you’ll see your new supplier listed on your next billing statement – the change won’t take effect until after your meter is read. Now that you’ve put in the effort to make all the right decisions, you’ll start to see the benefits each month with the new supplier on your bill.

Make the smart supplier choice

As you’ve learned, the bulk of the work when it comes to switching is deciding which supplier you want to work with, and why.

At David Energy, we’re not just here to provide better rates – we’re here to help you find the right rate and contract for your business. Plus, you’ll get additional benefits like software tools that help boost efficiency, and an energy advisor to guide you along the way.

And if you value a simple, turnkey experience when switching suppliers, David Energy might fit the bill there too. We manage enrollments for our clients, and handle all of the behind-the-scenes changes involved with switching power suppliers. Once you enroll with David Energy, you’ll see our name on your next statement as your supplier. 

It’s as easy as that. Switching power suppliers is a bright idea when it comes to savings and convenience.

Interested in a custom consult to find the right energy plan for your business? Book a meeting with our team here  to learn how David Energy can help.

Join the Better Grid Movement
Get Started Today