What Is The Downside To Energy Deregulation?

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The first thing to mention is that the incumbent utility is the default utility. Whatever happens, the incumbent utility will always be available. They also cannot turn down a customer: another reason why the default utility has to charge more.

Bad supplier: you were promised one thing and got something else. If the customer is with an alternative supplier and is unhappy they can: 1. switch suppliers or 2. go back to the incumbent utility.

Contract is too long or confusing: contracts protect you by locking in a fixed price for a set period of time. And any contract you break before it runs out may have a penalty.

There have been some cases where a supplier has gone out of business, maybe because of a financial reason or maybe the service is not acceptable. If this happens, customers can choose to find another supplier or go back to the incumbent without a break in their service!

Extra paperwork and dual statements: depending on the supplier, some will bill for delivery and supply. Some suppliers bill only for the supply and the delivery stays on the incumbent statement. A recent development is for the supplier to list the alternative supplier right on the statement. So when the customer looks at their power bill, the new supplier is listed on the bill.