Here’s How to Save on Your Energy Bill in States With Deregulated Markets

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Trying to save money on your utility bills?

Odds are you’ve already tried to use less energy. You probably already replaced all the incandescent light bulbs with LED bulbs and scheduled regular maintenance of your HVAC system. You may have even installed a programmable thermostat.

But what if you learned that there was a way to save on your energy bill without purchasing all-new energy efficient appliances? What if there was a way to use the same amount of energy, but pay less?

In states with deregulated energy markets, those lower utility bills can be a reality.

What Does it Mean to Live in a Deregulated Energy Market?

In most states, your utility company generates and delivers your energy. You don’t get to shop around for utility companies; you’re assigned one based on your address.

But about one-third of the 50 states have deregulated residential energy markets. In states with deregulated energy markets, that same, assigned utility company will still deliver your energy. In fact, they’ll still deliver your energy bill to you every month.

But you can shop around for who generates the energy you consume. Some third-party utility companies will offer a lower price per billable unit, meaning you’ll pay less money while maintaining the same energy usage.

What to Look for When Shopping Utility Companies

There are a few red flags to look out for before you shop around for a new company to generate your energy. Carefully read the contract before signing on any dotted lines.

How Long is the Contract?

First, you’ll want to see how long the contract lasts. Short-term contracts aren’t great because they generally come with a too-good-to-be-true rate. This rate will help you save money at the beginning, but the savings aren’t likely to last.

When the contract expires, you’re likely to face rates that are less generous than the competition. At that point the utility company is hoping you’ll stay on at a higher rate because of inertia. The alternative is going back to shopping the market again to find a better deal.

Conversely, if the contract is too long, that can be a red flag, too. The sweet spot is generally somewhere between 12 and 18 months.

Are There Cancellation Fees with This Utility Company?

Contracts of all lengths can come with early cancellation fees. When you have a longer contract, you’re more likely to need to duck out early, making those fees a bigger problem. If there’s a possibility that you might move before the contract expires, these fees are even more concerning.

Fixed or Variable Rates?

Those with longer-term contracts will also want to take particular note of whether rates are fixed or variable. Variable rates can be dangerous, as they have the potential to either gradually snowball or suddenly skyrocket.

If you find yourself looking at a longer-term contract with variable rates that also comes with early cancellation fees, you should not sign. Look for another company to generate your electricity, even if the initial rate offered is slightly higher.

How Can I Save on My Energy Bill While Going Green?

Green energy suppliers are available primarily in deregulated electricity markets. Many companies market themselves as ‘green’ or ‘renewable,’ but the best will operate at 100% renewable energy.

In many instances, renewable energy is less expensive than the default rate you’re paying on your electricity bill. Though affordability will vary from market to market.

Which States Allow Me to Save on My Energy Bill?

Now that you know what to look for, you can shop around to save on your utility costs. Make sure you’re getting the best rates by checking the deregulated energy markets in the following states.


In California, you can shop deregulated natural gas markets to save on your energy bill. You will have to contact each provider for current rates, making sure you’re only contacting the companies that provide residential services.

If PG&E delivers your natural gas, you can check their list of alternative companies that provide residential services.

Californians can also get paid for lowering their energy use.


Connecticut allows its residents to choose who generates their electricity with an easy-to-use online tool.


To shop electric utilities in Delaware, you will need to check out each individual company listed on the state’s website.


In Illinois, residential customers can shop around for both who generates their electricity and who supplies their natural gas.


While you do not have a choice of your natural gas provider as a residential customer in Maine, choosing who generates your electricity can help you save money.


Residential customers in Maryland can choose the company that supplies their gas and the company that generates their electricity, allowing them to shop around for the best rates on their heating and cooling bills.


Massachusetts makes it easy for residential customers to save on their electricity bill with a dedicated website for comparison shopping. It’s a little more difficult to shop around for natural gas suppliers, but it can be done by contacting each residential supplier listed on the state’s website.


In Michigan, you can lower your electric bill by contacting each company listed on the state’s website.

It’s even easier to shop around for natural gas suppliers in Michigan, as the state has a dedicated website for this purpose.


As a residential customer, you cannot comparison shop utility companies for your electric bill in Montana.

But you can shop around for natural gas suppliers depending on the part of the state you live in. Montana lists six different companies, which you’ll have to contact individually to see who can save you the most money.

New Hampshire

Residential customers in New Hampshire can choose the company that generates their electricity using the state’s search tool.

New Jersey

In New Jersey, residential customers can shop for who generates their electricity and who supplies their natural gas. The search process is organized by service area on the Board of Public Utilities’ website.

New York

New York state residents can save money on both their heating and cooling bills through the state’s Power to Choose site. Both electricity and natural gas markets are deregulated.


Ohio also makes it easy for its residents to find electric or natural gas rates with one simple site set up for comparison shopping: Energy Choice Ohio.


The Pennsylvania Public Utility Commission makes it easy for residents to reduce energy bills. You can shop for the best electric utility company using PAPowerSwitch. Natural gas suppliers can be compared using PAGasSwitch.

Rhode Island

Rhode Island residents can save money on their electricity bill by shopping at Empower RI.


Residents of Virginia can shop for who generates their electricity and who supplies their natural gas. To do so, they will have to contact each individual company listed by the state.

Washington, D.C.

Residents of the District of Columbia can easily shop electric suppliers using DC Power Connect. You can also choose your natural gas supplier, with some rates listed here, and a full list of potential suppliers here.

Does This Mean I Can Stop Obsessing Over My Hot Water Heater?

Let’s say you’ve established some good energy-savings habits. You purchased Energy Star appliances as recommended by the Department of Energy and EPA.

You’ve been careful to use the cold water setting when using your washing machine. During the warmer months, you’ve also taken to drying your clothes outside on the line to reduce your energy usage.

Now that you can get your energy at a lower price, does that mean you should stop these cost-saving measures?

Absolutely not! You’ll get optimal savings by both continuing those cost-saving measures and comparison shopping utility companies. Paying less while using less is the equation that lands you with the cheapest monthly utility bill.

Brynne Conroy is a contributor to The Penny Hoarder.