Direct access service providers… FAQ’s on what you need to know.
Direct access energy service providers... DIRECT advice on your most frequently asked questions.

Direct access service providers… FAQ’s on what you need to know.

Learning about choices in alternative energy service providers, also known as, a direct access service provider, doesn’t have to be painful or mysterious.   However, knowing to ask the right questions will make all the difference in what type of product and service you will receive.

If you’re considering making a change from your local utility provider to an alternative energy service provider, especially if you’re  a business operator, then I highly recommend that you have your energy contract looked over by your attorney BEFORE you enter in an agreement.  I’m not saying that ESP’s are unethical, however, for the price of a one hour contractual “look-see” by your legal counsel, you could save potential costly misunderstandings in what the ESP is selling, and what you think you are purchasing.

Alternatively, you can have your contract reviewed by an energy consultant who specializes in rate tariff analysis and reduction, as they have experience in negotiating rates and contracts with local and alternative energy suppliers.  Simply type in a web-search for “Rate Tariff Analysis Energy Consulting and Associations”, and see what pops up.

Steps to Choosing an Energy Supplier

Before you choose an alternative energy service provider, decide what is important to your home or business utility needs. Many people look for the lowest price first. But others may be looking for extra services, flexible payment terms, a known brand name, or an energy source.

Contact the competitive suppliers to ask questions and compare offers.  You can do this by performing a web-search to your state “Public Utilities Commission”, aka,  PUC to access a list of their ESP providers.  While you’re there, check for complaints filed by other consumers against any particular ESP.

Make sure you know all the details before you agree to change energy providers. Carefully read and understand all terms and conditions of the contract. This is where your attorney comes into the picture.

Contact the competitive service provider directly to get ALL the details of what their service can provide and compare that list to what your current local utility provider is furnishing you.

Learn what the contract rescission period is set at. This is the amount of time you have to rescind or get out if the contract if your change your mind.

Questions to Ask a Supplier

  • Do you have a license from the SCC, aka “State Corporation Commission”?
  • What is the offer price (per kilowatt-hour or per Ccf/therm)?
  • Is the price fixed or does it change? If so, how?
  • What other fees do you charge? How about if I cancel?
  • What is the term of the contract? What about renewal?
  • How am I going to be billed?
  • Is there an incentive or special offer for signing up?
  • Is a budget plan available?
  • What sources are used to produce the energy?
  • What other services do you offer?
  • When can I expect service to begin?

Here’s what Direct Access means in my home state of California.  You may find many similarities in your state.

Are Direct Access suppliers affiliated with any local utility located within a municipality?
No.  Each ESP, aka Energy Service Provider is independent of the utility.  As for your municipality; if your city generates and delivers its own electricity within its transmission and distribution system, then there is no direct access emancipation from your municipal electric service provider to an ESP provider.  Within California, ESP’s are permitted ONLY within the PG&E, SCE or SDG&E territories, and NOT within municipalities creating t heir own electricity.

What is Direct Access? Direct Access is a private electric service provider from whom you agree to purchase your electricity.  However, the distribution of that electricity is still carried over your local utilities power transmission lines and distribution system.

If I switch to another provider, how will I be billed? That depends on the ESP. You could receive one bill that includes charges for the electric supply, transmission and distribution, or you could receive two bills; one from your ESP for the electric supply and one from your local utility company for transmission and distribution.

What are my ESP’s responsibilities? Your ESP is responsible to supply you with adequate amounts of electricity supply as scheduled.  Should they fail to meet this supply, then this is where your local utility steps in to pick up where the ESP falls off.  That’s why you continue to pay for the usage of your utilities transmission and distribution sources as your default provider.  It’s here that your utility company is authorized through the CPUC to recover costs from your ESP

What if my power goes out? Who do I call?  Because you will continue to receive the transmission and distribution of your electricity via your local utility, you will still need to call them in the event you have an outage or an emergency.

Is Direct Access or ESP available only to large industrial users? No.  Direct Access can be access by small and medium sized businesses, as well as, residential homeowners.  However, check with your local utility to make sure you have the ability to change to an ESP for electricity and gas, OR, gas ONLY delivery.  Some local utility companies, depending on region, will only allow customers to switch to an ESP gas provider, and NOT electrical.

Will my local utility provider treat my account or business differently if I decide to sign with an ESP? No. The law stipulates that your utility company may not discriminate against you if you choose to select an ESP.  This means that you are entitled to the same treatment and rights to customer service and quality of electrical supply delivery as if you were purchasing  directly from you local utility.

Can I choose the type of renewable power I will receive? Yes.  But this does not mean you will know for certain whether or not that type of renewable energy is being delivered directly to you. In most cases, you will receive your energy served to you as a “blended” mix of these different energies via your local utilities transmission and distribution lines.  For example, a wind, solar, and geothermal mix.

Who is eligible to participate in the Direct Access program? Subject to the rules established for the limited re-opening of Direct Access, all residential and non-residential customers are eligible to participate in the Direct Access program. This said; customers must follow the applications procedures of the program before they can participate.

How do customers sign up for the Direct Access program? Subject to the rules established for the limited re-opening of Direct Access, you’ll need to give your utility 6 months advance notice in order to transfer to Direct Access service by completing and submitting a 6-Month Advance Notice to Transfer to Direct Access form. Upon expiration of the 6-month notice period, your ESP can submit a Direct Access Service Request (DASR) on your behalf to transfer from your utility supplied power to your newly chosen ESP.

Are there any fees incurred when switching service to and ESP? This is subjective to you new ESP, so check with them first.  Some utilities may charge a fee or do a true-up when a business switches from utility service.

Will my ESP need to replace any existing electrical service components at my location? Usually, physical modifications are not required because the ESP will deliver electricity through the same transmission and distribution system owned and operated by your current utility. Occasionally (for medium and large customers) a meter change will be required.

Will I notice any changes to my service? When you make the switch to your new ESP, there will not be any disruptions to your electrical service. You will only notice a change in your bill. You will still have access to your usage and billing history appearing on your delivery bill from the utility.

If I am on Direct Access, how do I return to the utility’s bundled service? Direct Access customers that wish to return to their utility bundled service must provide a 6-Month Notice to return to Bundled Portfolio Service (BPS).  Customers can stay on Direct Access during the advance notice period or they can choose to return immediately. If they choose to return to service provided by their utility prior to the expiration of the 6-month advance notice period, they will be placed on transitional bundled service until the 6-month advance notice period has been completed. Customers returning to bundled service make a three-year commitment to the utility and will not be eligible to return to Direct Access service until their three year period has completed, subject to the rules established for the limited re-opening of Direct Access.

Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar broker and energy consulting shopping services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties.

Jennifer -

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