Energy Supplier vs Utility Company

What is the difference between an energy supplier and utility company?

Utility companies are responsible for the physical delivery of electricity and natural gas. They maintain equipment, infrastructure, and deliver electricity or natural gas to your home or business. Before deregulation, everyone was required to buy their energy from their local utility company. After deregulation, energy supply became open to competition from energy supply companies. These companies buy energy wholesale on the open market and sell it back to consumers in deregulated states, offering different plans and pricing options.

Utility companies often bill customers directly regardless of whether a consumer has chosen a new energy supplier or not. Utility bills contain two different sections: charges from the utility company and charges for the supply of energy used. When a customer chooses a new supplier, the charges from their supply company will often be listed separately on the utility bill.

What is Energy Deregulation?

Energy deregulation means the energy market in a particular state or region allows energy suppliers to compete for customers' business. Utility companies have historically operated as monopolies, controlling everything from generation (in the case of electric) to delivery and maintenance. As far back as the Energy Policy Act of 1992 several states have chosen to break away from this traditional monopoly model in favor of allowing consumers the power to choose who supplies their energy.

In years to come, it’s possible that more of these single-choice markets, or regulated markets, could become deregulated in the years to come. This map reflects the latest laws governing the regulation and deregulation of energy markets in the U.S