Glossary of energy and supplier-switching terms
This glossary defines the terms residential electricity customers encounter in deregulated US markets, where the company that supplies your electricity can be separate from the utility that delivers it. It covers market structure, billing, the mechanics of switching suppliers, and the consumer-protection terms that surround them. Terminology varies by state, so each entry notes the relevant variations. Pylon serves residential electricity customers in 10 deregulated jurisdictions — the District of Columbia (DC), Delaware (DE), Illinois (IL), Massachusetts (MA), Maine (ME), New Hampshire (NH), New Jersey (NJ), New York (NY), Ohio (OH), and Pennsylvania (PA) — and the definitions below are written for that residential context.
On this page
- Deregulated electricity market
- Supplier vs utility
- Standard Service / Price to Compare
- Letter of Authorization (LOA)
- Early termination fee (ETF)
- Meter read date
- Supply rate vs delivery rate
- Variable rate / auto-renewal trap
- Aggregator / energy broker
- Switching window
- Kilowatt-hour (kWh)
- Fixed rate vs variable rate
- Municipal aggregation (community choice aggregation)
- Slamming and cramming
- Renewal notice
Deregulated electricity market
A deregulated (or “restructured”) electricity market is one in which the generation and procurement of electricity has been separated from its delivery, so customers can buy their electricity supply from a competitive third-party company instead of only from their local utility. According to the US Energy Information Administration (EIA), deregulated markets allow end-use customers to choose their electricity provider and no longer rely solely on the traditionally regulated utility for supply. Per EIA, the states that have restructured their retail electricity markets include the ones Pylon serves, along with several others.
Why it matters
In a deregulated market, the price you pay for the electricity itself is set either by a competitive supplier you choose or by your utility’s default rate — and those prices can differ significantly. The delivery portion of the bill stays regulated, but the supply portion is where competition, and the opportunity to overpay or save, lives.
How Pylon handles it
Pylon operates only in deregulated states where residential supplier choice exists. In the 11 jurisdictions Pylon serves, it monitors competitive supply rates and enrolls each user in the lowest-cost available supplier in their area. Pylon does not operate in regulated states, where no supplier choice is available, nor in deregulated states it has not launched in, such as Connecticut and Rhode Island.
Supplier vs utility
The supplier is the company that generates or procures your electricity; the utility is the company that owns the wires, delivers the electricity to your home, reads your meter, and sends your bill. In a deregulated market you can change your supplier, but you cannot change your utility — it is fixed by where you live. The Massachusetts Department of Public Utilities (DPU) describes this split plainly: the utility still delivers the power and responds to outages regardless of who supplies it, and only the supply portion of the bill changes when you switch suppliers.
Why it matters
This is the single most-confused distinction in the market. Many consumers believe switching suppliers means switching companies entirely, or worry their power will be interrupted. It will not. The New York Public Service Commission (PSC) notes that because suppliers buy electricity from the same wholesale sources as utilities, there is no physical difference in the electricity delivered — only a difference in price and contract terms.
How Pylon handles it
Pylon changes only the supplier. The user’s local utility continues to deliver electricity, read the meter, and issue the bill exactly as before. The supplier Pylon selects appears as a line item on that existing utility bill. Pylon never becomes the user’s biller and never touches delivery service.
Standard Service / Price to Compare
This is the default supply rate a utility charges customers who have not chosen a competitive supplier — and its name varies by state. Pennsylvania, Ohio, and Illinois generally use “Price to Compare” (PTC); per the PA Public Utility Commission (PUC), the PTC is the per-kWh generation rate charged to customers who have not selected a competitive supplier, updated periodically and printed on the bill as a benchmark. Ohio’s PUCO calls the underlying default rate the “Standard Service Offer” (SSO) and displays it on bills and its Apples to Apples comparison site as the Price to Compare. Massachusetts calls it “Basic Service” (per the MA DPU), Maine calls it “Standard Offer Service” (per the Maine PUC), and New York does not use a single brand name — the PSC refers to it simply as utility supply or default utility service, with third-party suppliers known as ESCOs.
Why it matters
The default rate is the number every competitive offer should be measured against. In Maine, the PUC reports that roughly 90% of residential and small-business customers take the standard offer rather than shop. A default rate set by periodic auction can swing sharply: Massachusetts Basic Service, for example, resets every six months per the DPU, so a customer who never shops can see their supply cost jump twice a year.
How Pylon handles it
Pylon uses the user’s state default rate — Basic Service in MA, Price to Compare in PA / OH / IL, Standard Offer Service in ME, default utility supply in NY, and so on — as the comparison benchmark for switch decisions in the 10 states where supplier contracts can carry early- termination fees. In Illinois, where residential ETFs are banned by regulation, Pylon first compares available rates against the user’s current supplier rate to look for an immediate-switch opportunity; if no available rate beats the current one, the same utility-default comparison applies. Pylon accounts for each state’s specific default-rate label rather than assuming a single national term.
Early termination fee (ETF)
An early termination fee is a charge a supplier imposes when a customer cancels a fixed-term supply contract before it expires. ETFs are common on fixed-rate plans and are meant to recover the supplier’s costs of acquiring and serving the customer.
Why it matters
An ETF can erase the savings from switching to a cheaper supplier, because leaving the old contract early triggers the fee. Rules vary by state. In Illinois, residential ETFs are effectively banned: under a 2019 state law effective January 1, 2020, suppliers are prohibited from charging early termination fees or penalties to residential and small-commercial customers who switch suppliers or return to utility service (per Illinois Commerce Commission consumer guidance). Most other states permit ETFs, though some states cap them.
How Pylon handles it
Pylon structurally avoids ETF exposure by timing each enrollment so the new supplier activates on the user’s next utility meter-read date. In Illinois, where residential ETFs are prohibited by regulation, Pylon can switch a user mid-contract without penalty whenever a lower rate appears. In the other 10 states Pylon serves, Pylon submits the new enrollment during the calendar month before the existing contract expires, so the new contract activates on the meter read date around expiry — landing the switch inside the no-ETF window.
Meter read date
The meter read date is the day each billing cycle when the utility records how much electricity a home has used. It marks the boundary between one billing period and the next, and it is the date on which a supplier change typically takes effect.
Why it matters
Because a switch takes effect on a meter read date, the timing of an enrollment determines when a new supply rate actually starts — and whether it lines up cleanly with the end of an old contract. A switch submitted at the wrong time can either leave a customer on an expensive rate longer than necessary or, if it lands before a contract expires, expose them to an early termination fee.
How Pylon handles it
Pylon times every switch to the user’s next utility meter-read date. By submitting enrollment during the calendar month before contract expiry, Pylon ensures the new supplier activates on the meter read date around expiry — with no gap and no overlap that would create ETF exposure. In Illinois, where residential ETFs are banned, the meter-read-date timing still applies but Pylon does not have to wait for contract expiry.
Supply rate vs delivery rate
Every kWh charge on a deregulated-state bill has two halves: the supply rate (also called the generation rate), which is the cost of the electricity itself, and the delivery rate (also called distribution or transmission), which is the cost of moving that electricity to your home over the utility’s wires. The PA PUC describes the generation/supply charge as set either by a competitive supplier or by the utility’s Price to Compare, while the delivery charge covers poles, wires, and infrastructure and is set by the regulator through utility rate cases.
Why it matters
Only the supply half is shoppable. The delivery rate is regulated and stays the same no matter which supplier you choose, as the MA DPU and PA PUC both make clear. This means switching suppliers changes only one portion of the bill — but it is the portion where competitive savings are possible. Confusing the two leads customers to either overestimate potential savings or dismiss switching entirely.
How Pylon handles it
Pylon acts only on the supply half of the bill. It never alters delivery charges, which remain set by the regulated utility. When Pylon enrolls a user with a lower-cost supplier, the change shows up only in the supply line item; the delivery charges continue exactly as before.
Variable rate / auto-renewal trap
A variable rate is a supply rate that changes period to period based on market conditions or at the supplier’s discretion, as opposed to a fixed rate locked in for the contract term. The auto-renewal trap is the common consumer-harm pattern in which a customer is signed up at an attractive low introductory rate that then rolls over — often automatically at contract end — into a much higher variable rate.
Why it matters
This pattern is well documented by regulators and enforcers. The New York Attorney General’s office has described how some suppliers lure customers with a low introductory “teaser” rate that lasts a short period, then move them onto a market-based variable rate substantially higher than the utility’s rate. The New York Assembly’s consumer guidance similarly warns that bills may rise sharply after a teaser rate expires. The NY AG has recovered millions of dollars in restitution from suppliers over deceptive savings claims and variable-rate practices. A customer who does not actively monitor renewal notices can end up paying far more than the default utility rate.
How Pylon handles it
Pylon’s daily rate review evaluates each user as their contract approaches expiry. In the 10 states where residential supplier ETFs are permitted, Pylon submits a new enrollment during the calendar month before expiry — comparing available supplier rates to the utility default rate — so the user lands on the lowest-cost option at the next meter read date rather than auto-renewing onto a higher variable rate. In Illinois, where ETFs are banned, Pylon can switch the user mid-contract whenever a better rate becomes available, so a teaser rate set to roll over does not have to be tolerated until expiry.
Aggregator / energy broker
An aggregator or energy broker is an intermediary that arranges electricity supply between customers and suppliers — for example, by pooling customers to negotiate rates or by helping a customer select an offer. Brokers and aggregators are licensed or registered in many states; Maine, for instance, requires retail suppliers, brokers, and aggregators to be licensed by its PUC.
Why it matters
The category covers a wide range of models, and a customer’s protections depend on which one they are dealing with. A pure broker that sits between the customer and the supplier may be compensated in ways that do not always align with the customer’s interest in the lowest rate, and comparison sites that simply list offers leave the work of choosing — and of re-shopping when a rate expires — entirely to the consumer.
How Pylon handles it
Pylon is not a comparison site and does not ask users to browse and pick rates. It monitors rates across licensed retail electricity suppliers and acts as the energy agent enrolling the user in the lowest-cost available supplier, rather than operating as a pure broker passing a customer through to a supplier. Pylon is free to the user; its revenue comes from supplier commissions, and switches are driven by which supplier is cheapest for the user at each eligible switching point.
Switching window
The switching window is the period during which a supplier change can actually be put into effect without exposing the customer to an early termination fee. In practice it is defined by two things: the customer’s contract expiry and their utility meter-read dates.
Why it matters
Switch too early — before a fixed contract expires — and an ETF may apply in most states. Switch too late, and the customer lingers on an expiring or rolled-over rate that may have jumped to a higher variable price. The window is the narrow, correctly-timed opening where a switch both takes effect cleanly on a meter-read date and avoids penalty. In Illinois, where residential ETFs are prohibited per the Illinois Commerce Commission, that window is effectively always open.
How Pylon handles it
Pylon submits enrollment during the calendar month before contract expiry, so the new supplier activates on the user’s next meter read date around expiry — landing the switch cleanly inside the penalty-free window. In Illinois, because no residential ETF applies, Pylon can switch mid-contract whenever a lower rate is available. In the other 10 states, Pylon confines new enrollments to the pre-expiry window, structurally keeping every switch within the safe interval.
Kilowatt-hour (kWh)
A kilowatt-hour is the standard unit of electricity consumption: the energy used by a 1,000-watt appliance running for one hour. It is the unit your usage is metered in and the unit nearly every electricity rate is priced against — both supply and delivery charges are expressed in cents or dollars per kWh.
Why it matters
Because rates are quoted per kWh, the kWh is the figure that lets you compare offers at all. A supply rate of $0.12 / kWh against a default rate of $0.14 / kWh tells you the per-unit difference, but the dollar impact depends on how many kWh you use: a household consuming 1,000 kWh a month sees a far larger swing from a rate change than one using 400 kWh. EIA tracks average US residential consumption and price per kWh, and a customer’s own monthly kWh total appears on every utility bill.
How Pylon handles it
Pylon compares supplier offers on a per-kWh basis against the user’s applicable utility default rate, so the comparison reflects the unit every rate is actually priced in. Users should still check supplier-imposed monthly fees and contract terms on their bill, since fee structures vary by supplier and a low headline per-kWh rate can occasionally be offset by a fixed monthly charge.
Fixed rate vs variable rate
A fixed rate is a supply price locked in per kWh for the length of the contract term, regardless of what happens in the wholesale market. A variable rate changes from period to period — typically monthly — based on market conditions or at the supplier’s discretion, with no cap unless a state imposes one. Default utility rates sit somewhere in between: they are effectively fixed for a set period (six months in Massachusetts, a year in Maine) and then reset by auction.
Why it matters
The two rate types carry opposite risks. A fixed rate gives budget certainty but can leave you above market if wholesale prices fall. A variable rate can start low but rise sharply, which is the mechanism behind the auto- renewal trap. Consumer advocates in several states, including Pennsylvania, commonly advise residential customers — especially first-time shoppers — to favor fixed-rate plans and to read whether a rate is fixed or variable before enrolling. New York’s PSC went further: effective April 2021, a variable-rate product sold to residential customers must guarantee annual savings against the utility or refund the difference.
How Pylon handles it
Pylon’s model is built around moving users to the lowest available fixed-rate supplier at each eligible switching point rather than leaving them exposed to an open-ended variable rate. When a fixed-rate term ends, Pylon evaluates available fixed-rate offers against the utility default rate (or, in Illinois, against the user’s current rate as the immediate-switch attempt) and submits a new enrollment rather than allowing a rollover to an uncapped variable rate to take effect by default.
Municipal aggregation (community choice aggregation)
Municipal aggregation — also called governmental aggregation or community choice aggregation (CCA) — is a program in which a local government negotiates a single electricity-supply contract on behalf of its residents, using their combined buying power to seek a better rate. Programs are either opt-out, where residents are enrolled automatically unless they decline, or opt-in, where residents must actively join. The term and structure are most prominent in Ohio and Illinois; per Ohio’s PUCO, governmental aggregators must be certified by the commission, and opt-out programs must be approved by local ballot vote.
Why it matters
Aggregation is one of the biggest reasons residential customers in some states are already on a non-utility supplier without having actively shopped — in Ohio, opt-out aggregation has driven a large share of residential switching. It can deliver savings, but an aggregation rate is not guaranteed to be the lowest available, and customers automatically enrolled in an opt-out program may not realize they can leave. Per PUCO guidance, residents reviewing an opt-out notice must decide whether to stay with the default utility rate or join the aggregation, and those on the state’s Do Not Aggregate list are excluded.
How Pylon handles it
A user already enrolled in a municipal aggregation is on a supplier rate that may or may not be the lowest available to them. Pylon treats an aggregation enrollment the same as any other supplier contract: in the 10 ETF-permitting states, Pylon submits a new enrollment during the calendar month before the aggregation contract expires, comparing available supplier rates against the utility default rate. In Illinois, where ETFs are banned, Pylon can move the user off an aggregation rate mid-contract whenever a lower rate is available.
Slamming and cramming
Slamming is the unauthorized switching of a customer’s electricity supplier without their knowledge or consent. Cramming is the placement of unauthorized charges or fees on a customer’s bill. Both terms migrated from the deregulated telephone industry, and the Federal Trade Commission has flagged both as risks in competitive electricity markets. There is no single federal statute banning energy slamming; it is regulated mainly at the state level through each public utility commission’s rules on how a switch must be authorized.
Why it matters
Slamming can move a customer onto a higher rate they never agreed to, and unwinding it requires contacting both the utility and the supplier. The harm is significant enough that regulators maintain complaint channels specifically for it — the New York PSC, for instance, directs customers who see an unauthorized switch to contact the utility and supplier immediately to halt it, and Pennsylvania directs slamming complaints to the PA PUC. A valid authorization on file is the safeguard that separates a legitimate switch from slamming.
How Pylon handles it
Every switch Pylon makes is backed by the electronic Letter of Authorization the user signs at signup, which is the consent record that authorizes Pylon to act on the user’s behalf. Pylon does not add its own charges to the user’s bill — it is free to the user and earns supplier commissions — so the user’s bill reflects only the utility’s delivery charges and the selected supplier’s supply charge.
Renewal notice
A renewal notice is the communication a supplier is required to send before a fixed-term contract ends, telling the customer what will happen when the term expires — typically that the plan will roll over to a new rate, often a month-to-month variable rate, unless the customer acts. Several states mandate the notice and its contents; New York’s PSC, for example, requires a Standard Renewal Notice for all residential customers.
Why it matters
The renewal notice is the single document standing between a customer and the auto-renewal trap. Pennsylvania’s PUC advises customers to watch for renewal notices and to track their contract expiration date, because a plan that lapses can shift to a variable rate that fluctuates significantly. Maine’s Office of the Public Advocate warns that a customer who does not contact their supplier before the contract end date may be automatically extended onto a higher or variable rate. In practice, these notices are easy to miss in the mail, which is exactly how teaser rates convert into expensive variable ones.
How Pylon handles it
Pylon’s daily rate review is designed to act on contract expiry rather than depend on the user catching a renewal notice themselves. As a contract approaches expiry, Pylon evaluates available supplier rates against the utility default rate (or, in Illinois, also against the user’s current rate as the immediate-switch attempt) and submits a new enrollment so the user lands on the lowest-cost ETF-safe option at the next meter read date, rather than letting a rollover to a higher rate take effect by default.