The short version
Two different companies can charge for one building. One moves the energy. The other sells it. They do not always bill together.
The four parties
The utility. Owns the poles, wires, pipes and meters. Delivers to the building and reads the meter. There is exactly one for any address, and the customer cannot shop for it. Also called the distribution company or the delivery company.
The supplier. Sells the commodity itself — the electricity or the gas. It owns nothing at the building. In some states the customer can choose one, the way you choose a phone plan while the copper in the ground stays the same. Also called an ESCO, an REP, a CRES, or just a third-party supplier.
Default service. If the customer never chose a supplier, the utility buys the energy on their behalf and passes the price through. You will see it called default service, standard offer, basic service, or price to compare.
The regulator. The state Public Utility Commission or Public Service Commission approves what the utility may charge. That is why the tariff is a public document, and why you can read it without asking anyone’s permission.
Regulated against deregulated — read this twice
In a regulated state there is one company and one bill. Delivery and energy come from the same place, at prices the state approved. Nothing is hiding.
In a deregulated state, delivery and supply are separate businesses. That splits the cost in two, and it can split the paperwork in two as well.
Step 1
One company delivers the energy to the building.
Step 2
A different company can sell the energy itself.
Step 3
Sometimes both halves sit on one bill.
Step 4
Sometimes the supplier bills separately.
Step 5
So ask for it before you compare anything.
How to tell a second bill exists
- The utility bill names a supplier: “Your supplier is Acme Energy”.
- It says something like “you have chosen an alternative supplier” or “supply charges are billed by your supplier”.
- The supply section is missing, or present but showing $0.00.
- The cost per kWh looks impossibly low when you divide the total by the usage.
When you see any of those, ask the customer for the supplier invoice and the supply contract. Both. The invoice tells you what they pay. The contract tells you what happens if they change anything.
Two more parties worth knowing
Municipal utilities and cooperatives. Some towns own their utility, and some rural areas are served by a member-owned co-op. They often sit outside the state commission, so their “tariff” may be a two-page PDF or a rate sheet on a council agenda. The logic is identical, the document is just thinner.
Water and sewer. Almost always the city or a regional authority, not a private company. Sewer is usually billed from the water meter reading — you pay to send out what you took in. That single fact is behind several of the plays you will see in lesson 8.
The one thing to remember
In a deregulated state, one bill is not the whole cost until you have checked. Always ask: am I holding all of it?
Check yourself
What does the utility do that the supplier does not?
The utility owns the wires or pipes and the meter, and physically delivers to the building. The supplier only sells the commodity. The customer can change supplier; they can never change utility.
A bill shows delivery charges and no supply section at all. What do you do?
Assume a second bill exists and ask for it, along with the supply contract. Do not build any comparison until you have it.
Why does a supply contract matter to a rate change?
It runs on its own terms. It can block a switch, or charge a fee to leave, even when the utility side of the change is fine.