How Does Switching Electricity Suppliers Work?

Switching electricity suppliers means replacing the company that generates and sells your electricity, without changing your utility or your power lines. You enroll with a new supplier, they notify your utility, and within one to two billing cycles your new rate appears on the same bill you already receive. Your lights stay on. No one visits your home. The utility continues delivering your power exactly as before.

Most people in deregulated states have never switched, not because the process is complicated, but because it is poorly explained. This post covers how it works, what to expect, and what to watch out for.

Your Bill Has Two Parts. You Can Only Change One.

Understanding the process starts here. Your electricity bill is split into two components: delivery and supply.

Delivery is controlled by your local utility, which owns the poles, wires, and meters in your area. This portion of your bill covers the physical infrastructure that brings electricity to your home. You cannot choose a different delivery company. It is fixed to your address.

Supply is the generation and commodity portion of your bill. This is the electricity itself, purchased on your behalf at wholesale and resold to you at a retail rate. In deregulated states, you can choose who provides this. If you have never switched, your utility is currently acting as your default supplier. Competitive suppliers can often offer rates below that utility default.

When you switch electricity suppliers, only the supply portion changes. The delivery portion stays with your utility, and the utility continues to send you a single bill reflecting both.

Which States Allow It

Not every state allows residential supplier choice. The US divides electricity markets into regulated and deregulated. In regulated states, your utility handles both delivery and supply, and you have no option to switch.

Deregulated states separated those two functions. The utility retained the delivery infrastructure, and supply was opened to competition. Pylon operates in 11 deregulated markets where residential supplier choice is available: Washington, D.C., Delaware, Illinois, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Texas. If you live in one of those states, your address is likely eligible.

One nuance worth knowing: even within deregulated states, some customers fall outside the system. Municipal utilities and electric cooperatives are often exempt from deregulation, meaning their customers may not have supplier choice even if the surrounding market does. The eligibility check at signup confirms this automatically.

The Enrollment Process

Once you decide to switch, the mechanics are straightforward. The steps below reflect how a standard residential enrollment works.

1. Confirm eligibility. You need an active utility account in your name at a residential address in a deregulated service territory. Renters qualify if the account is in their name. Renters whose electricity is bundled into rent typically do not, because they do not hold the account.

2. Check your current contract. If you are already on a third-party supplier (not your utility's default), review whether you have an early termination fee. Most fixed-rate supplier contracts carry ETFs, typically in the $50 to $200 range depending on plan length and state. Depending on the rate difference, paying the fee can still produce net savings, but it is worth knowing before you commit.

3. Authorize the enrollment. You sign a Letter of Authorization (LOA) allowing the new supplier to enroll you. This is the primary consent document. Read it before signing. It specifies the rate, contract term, and any fees.

4. The supplier submits to your utility. Once you authorize, the supplier handles everything. They file the enrollment request directly with your utility. You do not need to contact your current supplier or your utility.

5. The switch processes. Your utility schedules the change to coincide with a meter read date. The timeline from enrollment to effective rate change is typically one to two billing cycles, or 30 to 60 days, depending on where you are in your current billing cycle when you enroll.

6. New rate appears on your bill. From that point forward, the supply line on your utility bill reflects your new supplier's rate. Your bill format does not change. Your utility still sends it.

What Changes, and What Does Not

This trips people up more than anything else.

What changes: The supply rate on your bill. The name of the company providing your electricity commodity. Potentially, your monthly cost.

What does not change: Your utility. Your power lines. Your meter. How outages are handled. Who you call if the lights go out. The format of your bill. Your payment process.

Your local utility is still responsible for delivering electricity and responding to outages regardless of who supplies it. Switching suppliers has no effect on service reliability.

Fixed Rate vs. Variable Rate

Competitive suppliers typically offer two contract types.

A fixed-rate plan locks in your supply rate per kilowatt-hour for a set term, commonly 12 to 24 months. Your rate does not change with market conditions during that period. Fixed-rate plans usually carry early termination fees if you leave before the contract ends.

A variable-rate plan adjusts monthly based on wholesale market conditions. There is no locked-in rate and typically no early termination fee. Variable rates can be lower than fixed rates when markets are calm, but they can spike during periods of high demand. Variable plans offer flexibility; fixed plans offer predictability.

Most competitive suppliers targeting residential customers offer fixed-rate plans. They are generally the better fit for households that want a predictable bill.

When Does Switching Make Sense

The clearest case for switching is when a competitive supplier offers a fixed rate below your utility's default supply rate. That default rate goes by different names depending on the state. Pennsylvania calls it the Price to Compare. Massachusetts calls it Basic Service. Ohio uses Standard Service Offer. New York uses the term Utility Default Service. The concept is the same in all of them: the rate your utility charges if you have not chosen a competitive supplier.

Several things make the math more favorable:

Your utility's default rate has gone up. This happens regularly. Ohio's FirstEnergy service territory, for example, saw the Price to Compare increase more than 30% in April 2026 compared to the prior year. When the default rate rises, the gap between it and available competitive rates tends to widen.

Your current supplier contract is expiring. When a fixed-rate contract ends and you do not act, most suppliers roll you to a variable rate or auto-renew at a less favorable rate. That is a good time to shop.

You are currently on your utility's default rate. Many eligible households have never switched and are paying the utility default. Competitive suppliers routinely offer rates below that default, and the savings compound monthly.

What Pylon Does Differently

Most people do not switch because the process requires ongoing attention. You have to monitor rates, know when your contract is expiring, compare options, and enroll again. That friction keeps most eligible households on their utility's default rate indefinitely.

Pylon automates the entire cycle. You sign up once, authorize Pylon to act as your energy agent, and Pylon monitors competitive rates in your area daily. When a better rate is available at the right time, Pylon enrolls you automatically. When your contract approaches expiration, Pylon evaluates the market again and switches you if a better option exists. You do not have to track rates, watch your contract end date, or initiate anything.

Pylon is free to you. It earns a commission from the supplier when it enrolls you, the same commission structure that traditional energy brokers use. You pay nothing.

Pylon is available to residential customers in DC, Delaware, Illinois, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Texas. The next step is to enter your ZIP code at yourpylon.com to see what suppliers are available at your address.

Frequently Asked Questions

Can I choose my electricity supplier? If you live in a deregulated state and hold a residential utility account in your name, yes. Pylon operates in DC, Delaware, Illinois, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Texas.

Which states are eligible for Pylon? Pylon currently operates in DC, Delaware, Illinois, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Texas.

Will switching affect my electricity service? No. Your utility continues to deliver power regardless of who supplies it. Outage response, meter reading, and billing format all stay the same.

How long does a supplier switch take? Typically one to two billing cycles, or 30 to 60 days from enrollment to effective rate change.

Will I get a new bill or have to pay a different company? No. Your utility still sends one consolidated bill. The supply portion reflects your new supplier's rate.

What is an early termination fee? An ETF is a charge some suppliers apply if you leave a fixed-rate contract before it expires. ETFs typically range from $50 to $200. Variable-rate plans and your utility's default rate do not carry ETFs.

Can a renter switch electricity suppliers? Yes, if the utility account is in your name. If electricity is included in rent, you do not hold the account and cannot switch.

What happens when my supplier contract expires? Most suppliers roll you to a variable rate or auto-renew at a different fixed rate when your contract ends. Shopping at contract expiry is usually the highest-value time to switch.

Is Pylon free? Yes. Pylon earns a commission from the supplier on enrollment. You pay nothing.