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FAQ
Answers to your most common questions
What is an EGS or ESCO?
An EGS is an Electric Generation Supplier (EGS), and is also sometimes referred to as an ESCO (Energy Supply Company), or an alternate 3rd party supplier. The EGS provides generation (capacity and energy), and in most cases, transmission service to the EDC’s (electricity distribution company’s) system for delivery to your facility.
An EGS can be a broker, marketer, aggregator, or an electricity generator that physically converts a fossil fuel (coal, natural gas, nuclear, etc.) or a renewable source (wind, solar, hydro, etc.) into kilowatts for consumption.
In a deregulated or “free and open” market, EGS customer charges are not regulated and the customer has the right to choose any supplier. Each supplier (EGS) offers single or multiple rate terms, such as variable (month to month) rates and fixed rate terms, such as 12, 24, and 36 month fixed agreements.
Many EGS companies are actually unregulated subsidiaries of utility holding companies that also have EDC subsidiaries.
Although every EGS must be licensed by each state’s Public Utility Commission (PUC) to do business in that state, their prices and individual contracts with customers are not subject to regulatory approval as they traditionally would have been with an EDC.
The simplest summary is that electricity deregulation is very similar to deregulation of telecommunications in the 1980’s, where following deregulation you could then choose your long distance provider. - Now you can simply choose a lower cost supplier (EGS), or the company that actually makes the energy and kilowatts you use. Those kilowatts now are just “delivered” by your traditional power company (EDC).
