Wholesale electricity prices are projected to reach $51 per megawatt-hour in 2026, an 8.5% jump from 2025 levels, according to Utility Dive’s reporting on the latest EIA outlook. Residential rates are following, with the EIA forecasting an average of 18.02¢/kWh nationally. For homeowners in deregulated electricity markets, these projections create urgency: locking in a competitive fixed supply rate before wholesale increases filter into retail pricing protects household budgets for the duration of the contract. Here is how the shopping process works, step by step.
Step 1: Confirm you can shop for electricity
Electricity shopping exists only in deregulated markets, where state law separates power generation from power delivery. Your utility still owns the grid, maintains the lines, and responds to outages. A separate company, your retail energy provider, generates or procures the electricity itself. You can choose among competing providers for the supply portion of your bill while your utility handles everything else.
13 states plus the District of Columbia allow residential customers to choose their electricity supplier. Arbor, an energy-switching platform, currently operates in 12 of these: Pennsylvania, Ohio, Illinois, Massachusetts, Rhode Island, Delaware, Maine, New Hampshire, Connecticut, District of Columbia, Maryland, and New Jersey. State-issued broker licenses authorise Arbor in each jurisdiction, including Pennsylvania license A-2023-3043382 and Massachusetts license EB-571. Homeowners served by municipal utilities or electric cooperatives may not have access, even within deregulated states.
Step 2: Identify what you are currently paying
Most homeowners have never examined the supply rate on their electricity bill. That line item, often labeled “generation charge,” “energy charge,” or “price to compare,” is the number that changes when you switch suppliers. Delivery charges remain constant regardless of provider.
Supply typically accounts for around half of a residential bill. Homeowners who established utility service without selecting a competitive supplier are on the default rate, sometimes called “basic service” or “standard offer.” Utilities set this rate through regulated wholesale procurement cycles designed for supply reliability, not price optimisation. A review of current pricing on state comparison tools like PA Power Switch and Energy Choice Ohio shows competitive fixed-rate plans priced 10-30% below these defaults. ConsumerAffairs reporting on 2026 EIA projections notes that grid investment and rising fuel costs are pushing default rates higher still, and households on unmanaged plans absorb every increase with no buffer.
Step 3: Understand why timing matters right now
Two market forces make early 2026 a particularly consequential window for rate shopping.
Natural gas remains the dominant fuel for electricity generation in most U.S. regions. Utility Dive reports the EIA forecasts gas prices to average $4.00/MMBtu in 2026, driven by expanding LNG exports and flat domestic production. Because gas-fired plants frequently set the marginal wholesale electricity price, higher gas costs translate directly into higher retail supply rates for customers without fixed contracts.
Simultaneously, electricity demand is accelerating. Data centers and cryptocurrency mining concentrated in Texas and the mid-Atlantic are tightening regional grids. EIA data shows the West South Central region alone will account for 66% of the growth in U.S. electricity sales in 2026. These regional demand spikes create wholesale price pressure that spreads across interconnected markets.
Fixed-rate supply contracts lock pricing for 6 to 24 months. Homeowners who secure a rate before wholesale increases reach retail pricing carry that lower rate through the duration of their contract, regardless of what happens in the wholesale market afterward.
Step 4: Compare available plans on more than headline price
Rate shopping is straightforward once you know what to look for, but the advertised cents-per-kWh number tells only part of the story.
Monthly service fees of $5 to $15 raise the effective per-kWh cost, especially for lower-usage households. A plan at $0.075/kWh with a $9.95 monthly fee costs more than a $0.085/kWh plan with no fee for any home using fewer than 1,000 kWh per month. Minimum usage requirements penalise efficient homes by charging for a consumption floor regardless of actual use. Early termination fees, typically $50 to $200, affect flexibility if circumstances change.
Calculating total monthly cost, (rate x expected usage) + monthly fees, for each plan creates an accurate comparison. Arbor’s rate comparison methodology automates this calculation using actual household usage data rather than requiring homeowners to estimate.
Step 5: Choose a shopping method that fits your situation
Three categories of tools exist for finding lower electricity rates, each with different tradeoffs between effort and ongoing value.
State-run comparison websites such as PA PowerSwitch and Illinois Power2Switch list available supplier offers by utility territory. These are free and transparent, but they display plans without personalising to your usage, require manual calculation of total costs, and offer no monitoring after enrollment.
Third-party rate aggregators compile offers across multiple states and sometimes facilitate enrollment. Sponsored placements may influence which plans appear first, and re-shopping remains the homeowner’s responsibility.
Automated comparison and switching platforms pull actual usage data from your utility account, calculate personalised savings for each available plan, and execute the switch. Arbor operates this way across 12 deregulated states, earning revenue from supplier referral commissions rather than customer fees. Ongoing monitoring tracks contract terms and market conditions, processing renewals before expiration.
Each method can surface lower rates than a utility default. Where they differ is in what happens six, twelve, or eighteen months later when the initial contract expires.
Step 6: Protect your rate over time
Shopping once and forgetting is the most common and most costly mistake homeowners make in deregulated markets. Supplier contracts last 6 to 24 months. When they expire, providers roll customers onto month-to-month variable pricing that tracks wholesale markets. Research on consumer behavior in electricity markets shows 40-60% of customers who initially secure competitive rates revert to above-market pricing at contract expiration.
Variable rates can spike sharply during peak demand periods. ConsumerAffairs notes that 2026 wholesale forecasts include projected summer price spikes in ERCOT driven by high demand meeting limited supply, exactly the conditions that punish variable-rate customers hardest. Homeowners on fixed contracts during these periods pay the same rate they locked in at enrollment.
Platforms like Arbor that monitor expiration dates and re-enroll customers before variable pricing activates solve this structurally rather than relying on homeowner attention.
For Homeowners
Wholesale electricity prices are forecast to climb through 2026, and every structural driver behind that increase, from natural gas costs to data center demand, points in the same direction for the foreseeable future. Homeowners in deregulated markets have a lever that most never pull: the ability to replace an unexamined default supply rate with a competitive fixed-rate contract that holds pricing steady for 6 to 24 months.
The six steps above take less time than most households spend reviewing a single monthly bill. Confirm your market is deregulated. Find the supply rate on your bill. Compare that number against available fixed-rate plans using total cost, not just the advertised per-kWh price. Then choose a shopping method that accounts for what happens when the contract expires, not just what happens at enrollment.
Households that secured competitive fixed rates in early 2025 carried those prices through every wholesale increase that followed. Homeowners who act now, before 2026 wholesale projections reach retail bills, stand to do the same. The cost of waiting is not dramatic. It is simply one more month at a rate that was never the best available option.
