Cost, contract terms, and mode of generation are three factors consumers can consider when choosing an electricity supplier. These factors, or a combination thereof, can be compared to the default offerings made for the supply of electricity by the consumer's utility company.
If a consumer is interested primarily in cost savings, he should compare the price per kilowatt hour charged by the utility company to that of alternate suppliers. Some electricity suppliers offer incentives such as a signing bonus, which can also be factored into the overall cost.
The terms and conditions of an electricity supply contract also vary by supplier. Considerations for consumers in selecting a contract include variable versus fixed rate pricing, the length of the contract and cancellation fees. Consumers can also ascertain if there is a ceiling on price per kilowatt hour built into the contract. If there is no ceiling, customers on a variable rate plan may see a sudden, sharp rise in price.
Most utilities supply electricity that is generated through the use of coal, natural gas and nuclear energy. Consumers who wish to lessen the amount of fossil fuels burned to produce electricity can choose an alternate supplier who procures some or all of its electricity supply through generation methods such as wind, hydro or solar.