Reducing energy bills is a guaranteed way to lower a business’s operating costs. For many businesses, electricity bills are a huge part of their fixed monthly costs. For instance, the average monthly energy bill for businesses in Texas is well over $600. However, the average commercial energy rate is 8.57 cents per kilowatt-hour (kWh). That’s significantly lower than the average residential rate of 15.61 cents per kWh, according to October 2024 data from the U.S. Energy Information Administration (EIA).
For small businesses, even a marginal change in their energy expenditure can shift their profit numbers. Similarly, industria and manufacturing businesses typically consume large amounts of energy, which means even a slight reduction in business energy rates can lead to a noticeable difference in their total energy costs.
When Is the Best Time To Switch Business Energy Providers?
Ideally, you should switch when your contract is nearing an end (to help avoid cancellation fees) and when prices have dropped, which can help you secure monthly savings on your total energy costs. Typically, prices drop in spring and fall, when mild weather leads to decreased energy demand and lower energy prices.
Check your existing contract to ensure you won’t owe your existing provider an early termination fee (ETF). In Texas, for instance, you can switch your providers without having to pay the ETF in the last 14 days of your existing contract. However, if prices are low enough that you can secure significant savings on your monthly business energy costs, you may find it worth paying the ETF to secure the lower rates now.
Also, note that you want your new plan to start before your current one ends. If not, you may end up paying high out-of-contract rates.
Steps To Switch Your Business Energy Supplier
Switching your business energy supplier is straightforward, with three simple steps. Professional support can also help make the process simpler and help you choose the best energy supplier for your business.
Below are the three steps involved in switching your provider:
1. Gather Your Information
To sign up for a new business electricity plan, you will need to gather the following information:
- Business name and address
- Business tax ID
- Connection date
Besides the above, you may also need to have your payment information or details handy.
2. Compare Energy Suppliers
Compare energy providers, plans and rates to ensure you get the most suitable plan and the best rate for your business. Start by requesting quotes from energy suppliers, and then compare the top options for your business. Below are the key parameters to compare when looking at providers.
- Business energy prices: A low electricity rate per kWh means lower monthly energy bills. Look for providers with low pricing, but make sure to read the electricity facts label (EFL) to spot hidden pricing and marketing gimmicks.
- Renewable energy content: Using renewable energy can help reach your business’ sustainability goals. Most providers today offer one or more plans with a higher percentage of green energy. Some companies, like Gexa Energy, Rhythm Energy, Chariot Energy or Green Mountain Energy, offer only 100% renewable energy plans.
- Customer ratings and complaints: Reliable service and good customer support are important features of any good electricity provider. Read the reviews and complaints of existing customers before choosing a provider.
One thing to note about business energy plans is that they’re generally straightforward, fixed-rate plans with a set rate for your entire load of usage. Having more straightforward options makes it easier for business owners like you to compare plans based on rate and provider, rather than any potentially confusing discounts.
3. Make the Switch
Once you have researched and compared providers, it’s time to make the switch. Simply sign up for the new plan by providing your business information outlined in the previous section. Your providers will switch on the chosen date without any interruption to your electricity service. You don’t even need to let your current light company know that you’re canceling your plan.
Before switching, check your current plan’s terms of service to see if you’ll be accountable for any cancellation fees. Finally, be sure your new contract starts before your current one expires to avoid paying expensive out-of-contract rates.
Understanding Your Current Energy Contract
Understanding your existing energy plan can help you compare plans more effectively and choose a better plan for your commercial energy needs. Before browsing new plans, be sure to understand your existing plan’s energy rate and terms and conditions. To do this, we recommend reading your plan’s EFL, noting the energy charges, penalties and other fees associated with it.
A proper analysis of your existing plan and energy bill history can help you determine your average energy usage levels. Once you know your business’s typical energy usage per month, you can choose a plan that offers a low electricity rate for your business’s needs.
Key Contract Elements To Review
Before signing up for a new contract, we recommend reviewing the following elements of your current contract carefully:
| Contract Element | What to Look For | Why It Matters |
| Contract Length | A term ength that suites your business needs | Commercial energy plan contracts range from a few months to several years. Compare energy rates and plans to see which contract length best matches your business plans. |
| Early Termination Fees (ETF) | Low or no ETF | Market rates change multiple times throughout the year. If you like to shop around for better rates more frequently, you may want a plan with a low ETF. |
| Current Rates | Low rates | Low energy rates mean low energy bills, which results in a better bottom line. Look for the best rates with contract length that meets your goals. |
Why Switch Energy Providers?
Switching electricity suppliers can bring several benefits, including but not limited to cost savings and improved customer service. Below is an overview of other potential benefits you may experience when you switch energy suppliers.
Reducing Operational Costs
Most businesses switch their electricity providers to reduce their energy rates. A lower electric rate per kilowatt-hour means lower monthly energy bills, which means lower operational costs and higher profits.
When it comes to energy rates, even a small difference of a few cents per kilowatt-hour can make a noteworthy difference in your annual electricity expenses. Large businesses with energy-intensive machinery or appliances may see even more significant savings due to the amount of energy consumed.
Improving Service Quality and Reliability
Even with the cheapest business energy rates, poor service quality can be a deal breaker. Poor service can mean incorrect billing, unresponsive customer support and other issues. Businesses sometimes switch providers to improve their service quality and overall reliability.
Start by checking a provider’s online reviews and ratings. Other factors to consider include the number of complaints and speed of resolution. We highly recommend checking out a provider’s score with the Public Utility Commission of Texas (PUCT) as well. We’ve also reviewed dozens of Texas energy companies, evaluating them on several key categories, including customer satisfaction.
Supporting Sustainability Goals
Sustainability is rapidly gaining importance among businesses. In some areas, companies have to comply with the requirements of specific sustainability goals, while many businesses also set their own sustainability goals.
Using 100% renewable energy and other green initiatives can often build a business’s reputation. Multiple providers now offer green energy plans with rates and terms comparable to traditional plans.
Facilitating Business Growth
One of the best indirect benefits of reduced business energy costs is increased net profit. You can then reinvest any additional profit into business growth, supporting any expansion plans or operational improvements, such as upgrading infrastructure or adding new machinery. However, the impact of these savings will depend on how much energy your business uses and how much you’re able to save per kilowatt-hour by switching providers.
Frequently Asked Questions
How long does it take to switch business energy providers?
Generally, switching business energy providers can take up to a week. However, it may take longer in some cases. We recommend starting your search for your new business energy supplier about a month before your current contract expires to make sure you have time to do your research before signing up with a new provider.
What happens if I’m still under contract with my current supplier?
If you have an existing contract, you may have to pay an early termination fee (ETF) when you switch providers. If your existing contract ends in 14 days or less, you will be exempt from the ETF.
Will my business experience any power interruptions during the switch?
No, you will not experience any interruption in your electric service during the switch. Thanks to smart meters, your utility company will continue supplying power to your business while the provider changes.
What makes a business eligible to switch energy providers?
All electricity customers in deregulated energy areas are eligible to switch their energy providers — whether residential or commercial. If your business operates in an area of the deregulated energy market, you can switch energy providers whenever desired. Just pay attention to any potential cancellation fees before terminating your current contract.
