Best Utility Companies

Laws and regulations

When it comes to choosing a utility provider, you’ll need to understand how the market works in your area. This will determine whether you have a choice in the companies that provide your utilities and whether you are eligible for services.

• Regulated markets: Some states and municipalities require consumers to receive services from one, authorized provider-- often the municipality itself. These markets are called “regulated.” Consumers living in regulated markets have no control over the rates they are charged for the services they receive, because the fees are standardized.
• Deregulated markets: Beginning around 1992, some areas of the U.S. switched to a deregulated system, allowing consumers choice when it comes to their service providers for one or more of their utilities. Private companies operate the utilities options in these areas, which leads to market competition and, often, lower prices for consumers. It also means you have to shop around and find the best companies and best prices.
• Eligibility for service: In the United States, unless your services are paid for by a landlord, when you move into a home or apartment you have to apply for utilities services. According to the Federal Trade Commission, this process is also considered a credit application. That means utilities companies are legally authorized to conduct a background check on you, including a full credit history, and they can deny services if you have a poor credit history. Most utility companies will allow customers with bad credit to pay a large deposit or ask someone else to serve as a guarantor on their account. If you fail to pay your bill, your guarantor is legally obligated to pay your bill for you.

Cost considerations

Utilities companies calculate fees in a variety of ways. Be sure you understand how each company calculates bills, including standard fees, additional fees and late fees as well as any potential discounts or rebates you might take advantage of.

• Minimum usage fees: Some utilities companies, like those who provide electricity, natural gas or water, require customers to use a certain amount of the service each month and charge a “minimum usage fee” if you don’t use that amount. If you conserve a lot of energy or water at your home, or are away from home frequently for work or travel, these companies might not be the best choice for you.
• Late fees: Many utilities companies have a standard due date for your monthly bill. Many companies charge late fees for any bills paid after this date, with a specified grace period before cutting of your utility service altogether. For example, your water bill may be due on the first of every month. You may have an additional week to pay your bill before accruing late fees, and after 20 days of nonpayment the water to your home or business may be turned off.
• Energy savings or rebates: Many companies offer a rebate or discount for switching to more energy-efficient utilities, such as switching from electricity to natural gas. This discount or rebate is intended to offset the cost of converting your home. You can also find state or federal rebates for some conversions, including tax credits.
• Discounts for those who qualify: Many utilities companies offer a spectrum of discounts for customers who might struggle with their monthly bills. Check to see if your service provider offers a discount for low-income customers, the elderly or veterans. Some energy companies also offer a medical waiver for customers who need more heat or cooling because of a medical condition, allowing them to access the needed services without additional charges. You will be asked to provide proof of your income, age, veteran status or medical condition to qualify for discounts.

Bill pay options

Paying your monthly utilities bills can be a hassle, especially when you have several separate service providers who each have their own billing policies. Look for a company that simplifies the process as much as possible.

• Payment formats: Many utility companies still require customers to pay their monthly service bills by check sent through postal mail. Some also accept payment in person or online. In several states, major utility providers also allow customers to pay bills at certain banks or grocery stores that are authorized to accept payment.
• Online bill pay: Many utility providers allow customers to pay their bills online by creating an account on the company’s website, logging in using a user ID and password and entering credit card information to authorize bill payment. But clunky, out of date websites can complicate this process or even compromise your financial information. Be sure the website is secure for payment by looking for a padlock symbol in your browser window and the letters “https” instead of just “http” at the beginning of the website URL.
• Prepay or autopay options: Some utilities companies allow customers to prepay for services or set up their bank accounts to automatically draft a payment each month or pay period. This can simplify the process for you by giving you one less bill to remember each month.
• Budget billing plan: Many companies offer a flat monthly fee for utilities, which can help you plan in advance for your payments. Of course, you’ll eventually have to pay any overages or late fees you’ve incurred on your account, and the payment deadline for these will vary. A budget billing plan can be a great option if you are typically able to keep your utility use to a minimum, for example by conserving electricity or water.
• Settling overdue bills: Utility companies have different policies when it comes to how to settle your account if you are overdue on payment. Many companies will work with you to arrange a payment plan without canceling your services. For example, they may allow you to pay an additional amount of money on each monthly bill for a set amount of time until you are caught up on payments, provided that you are not late on any more payments.

Customer service

Most utilities companies offer the same product as their competitors; electricity is electricity no matter who is providing it. But the lower prices at one company might actually cost you in the long run, if the more affordable company is unable to afford maintenance of its grid or other equipment and responsive customer service.

• Contact methods: Your utility provider should be easy to reach in case of an emergency or questions about your service or bill. Your provider should offer several methods to stay in touch with consumers. Many utility companies offer a question or comment submission form on their website in addition to an 800 number. If services are down, you can often report the issue on the website as well.
• Online chat service: One of the most frustrating aspects of dealing with a utility provider can be dialing an 800 number and waiting for an available representative. Some utility companies help customers bypass this frustration with a chat service on their website. You can type your question and chat with a representative; if no one is available to chat, you can come back later or wait while surfing the web instead of holding a phone.
• Outages and service disruptions: Large companies often respond quicker in emergency situations, because they have a larger workforce, more equipment and often more experience than smaller companies. But these larger companies often charge more for their services to be able to afford this responsive service. Consider whether outages and disruptions are common in your area. For instance, if you live in an area that rarely receives snow or ice, you are less likely to experience a disruption in electric service in the winter.

Electric companies

These companies provide electricity services directly to homes and businesses and maintain the power grid throughout the area. Generally, electric companies charge by the amount of electricity you use (measured in kilowatts per hour).

Water and wastewater companies

Water and sewer services are almost always provided by the city where you live or do business. These companies provide and treat drinking water and wastewater and maintain the sewage and plumbing system in the city, and bill customers based on water usage, typically determined by reading a water meter.

Natural gas companies

Natural gas is available in many areas as an alternative way to heat your home or business, operate appliances like a stove or hot water heater and even generate electricity. Natural gas companies distribute the gas to your home or business and bill you for the amount you use.

Propane companies

Propane companies manufacture and distribute propane to residential and business customers. They often provide propane conversion services, maintenance and offer delivery services since propane is not distributed through a pipeline system like natural gas.

Waste removal and recycling companies

Companies that pick up curbside, non-hazardous garbage and recycling for residential and business customers are also considered utility companies. Some cities provide these services free of charge, while others do not.

Not-for-profit utilities services

Some utilities services are offered by not-for-profit organizations such as cooperatives, municipal services and other publicly-owned companies. Public utilities often have a monopoly over their service area.

For-profit utilities services

Some utilities companies are privately held, investor owned, for-profit firms. These companies can compete in pricing in areas where there are more than one.

Residential customers

Homeowners and renters need to use utilities companies like electric, gas and water service providers. In some service areas, residential customers don’t have a choice about what service provider to use. In other areas, called “deregulated markets,” they can choose between competitors.

Business owners

Businesses of all sizes need utilities like electricity, gas and water. Even e-businesses need electric services to operate.

Industrial customers

Industrial companies like large factories and agribusinesses need utilities providers like electric, natural gas and water to operate their facilities.

Vehicle drivers

Some utility companies provide vehicle services like toll payment systems or fueling systems.