The price to compare is the per-unit rate your utility charges for the energy supply portion of your bill, and it’s the benchmark you use to judge whether a third-party supplier’s offer would actually save you money. If a supplier quotes a rate below it, you save on every kilowatt-hour or therm you use. If the quote sits above it, you pay more. Everything else on a supplier’s pitch, from contract length to green energy claims, is secondary to this one number.
What the Rate Covers
The price to compare bundles the costs of producing energy and moving it across high-voltage lines to your local utility’s infrastructure. For electricity, that means generation costs (what the power plant or wholesale market charges), transmission fees, capacity charges, ancillary grid services, and line losses during transport. For natural gas, it covers the wholesale purchase price plus the cost of moving the gas through interstate pipelines to the utility’s local distribution system.
It does not include the delivery or distribution charges on your bill. Those pay for the local poles, wires, transformers, meters, and gas mains that carry energy the final stretch into your home. Distribution fees stay the same no matter who supplies your energy, so they’re irrelevant to any supplier comparison. When you switch to a third-party supplier, the only line item that changes is the supply charge. The price to compare tells you exactly what that supply charge costs today under your utility’s default service.
Who Has a Price to Compare
This number only exists in states with deregulated energy markets, where lawmakers separated the generation side of the business from the delivery side. Roughly 18 states and Washington, D.C., allow residential customers to choose their electricity supplier. A smaller number of states offer natural gas choice. In the remaining states, your utility handles both supply and delivery as a single regulated monopoly, and there’s no alternative supplier to shop against.
If you’ve never seen a price to compare on your bill, you probably live in a fully regulated state. Check your utility’s website or your state public utility commission’s site to confirm whether energy choice is available before responding to any supplier marketing.
Where to Find It on Your Bill
Utility commissions in deregulated states generally require the rate to appear prominently on monthly statements. Look for a dedicated message box, often labeled something like “Message Center” or “Shopping Information,” near the supply charges section. The number is typically printed in small type but formatted to stand out from surrounding content.
For electricity, expect to see the rate in cents per kilowatt-hour, often carried out to four or five decimal places (for example, $0.1245 per kWh). Natural gas customers will find it in dollars per therm or per hundred cubic feet. The bill usually includes a sentence explaining that this is the rate to use when evaluating competing offers. If you can’t find it on your statement, your utility’s website almost always posts the current price to compare on a dedicated page, sometimes alongside historical rates so you can see the trend.
How Often the Rate Changes
The price to compare isn’t set arbitrarily. Utilities acquire default supply through a competitive procurement process, typically issuing requests for proposals to wholesale energy suppliers. The winning bids determine what gets passed through to customers. Because wholesale prices move with fuel costs, weather, and demand, the rate updates periodically to reflect those shifts.
For electricity, most utilities adjust the rate on a seasonal or semi-annual schedule, with common update dates falling around June 1 and October 1. Natural gas rates often reset annually, though utilities can file for mid-year adjustments if wholesale costs swing sharply. Some utilities update quarterly. Utilities do not profit on this supply charge. They function as a pass-through, charging you the wholesale price they paid during procurement plus the administrative cost of running the auction. If wholesale prices drop, the default rate must come down at the next adjustment. If prices spike, the rate goes up.
That creates an important planning point: the price to compare you see today may not be the price to compare six months from now. A supplier offer that beats the current default rate by a hair could end up more expensive if wholesale prices fall and the utility lowers its rate at the next reset.
Doing the Math
Take the supplier’s offered rate in cents per kWh (or dollars per therm for gas) and subtract the current price to compare. If the supplier’s number is lower, you save on every unit of energy you use. If it’s higher, you pay more.
To estimate the monthly impact, multiply the per-unit difference by your typical consumption. A household using 1,000 kWh of electricity per month that switches from a default rate of 14.5 cents per kWh to a supplier charging 12.5 cents per kWh saves roughly $20 per month on the supply portion alone. As of early 2026, the average U.S. residential electricity price sits around 17 to 19 cents per kWh, though your utility’s price to compare could run higher or lower depending on your region’s energy mix and procurement results.1U.S. Energy Information Administration. Electric Power Monthly – Table 5.03
Make sure you’re comparing the same unit of measurement. A supplier quoting in dollars per megawatt-hour while your bill shows cents per kilowatt-hour will produce nonsense math if you don’t convert first (divide dollars per MWh by 10 to get cents per kWh). Ignore distribution and delivery charges entirely when doing this comparison, since those stay identical regardless of your supplier.
Watch for Charges the Rate Doesn’t Show
The per-unit rate is only part of the equation. Some supplier contracts tack on monthly service fees, minimum usage charges, or other line items that don’t appear in the headline per-kWh number. A supplier advertising 12 cents per kWh plus a $9.95 monthly fee could cost more than a utility charging 13 cents per kWh with no added fees, depending on how much energy you use. Ask for the total cost of a plan, not just the advertised rate, and read the contract’s terms of service before signing.
Contract Terms That Can Erase the Savings
The biggest financial risk in energy shopping isn’t picking a supplier with a slightly higher rate. It’s signing a contract with terms that quietly eliminate whatever savings the rate seemed to promise.
Fixed Versus Variable Rates
A fixed-rate plan locks in your per-unit price for the full contract, typically 12 to 36 months. A variable-rate plan lets the supplier adjust your rate based on market conditions, sometimes monthly. Variable plans can look attractive when wholesale prices are low, but they expose you to sharp spikes during high-demand periods like extreme heat or cold. There’s no cap on how high a variable rate can climb, and you may not find out about an increase until the bill arrives. If you choose a variable plan, check your rate every month and be ready to switch quickly.
Early Termination Fees
Most fixed-rate contracts include an early termination fee if you cancel before the term expires. These commonly range from $150 for a 12-month plan to as much as $395 for longer contracts. Some suppliers charge a flat fee per month remaining on the contract instead, which can add up fast. Before signing, work out whether your projected savings over the full term exceed the termination fee. If they don’t, you’re effectively locked in even if the deal turns sour.
Introductory Teaser Rates
Some suppliers advertise a low introductory rate for the first few months, then shift to a higher standard rate for the remainder of the contract. The teaser rate may beat the price to compare by a wide margin while the post-introductory rate exceeds it. Read the full contract to see what happens after the promotional period ends, and calculate your costs across the entire term rather than just the opening months.
Automatic Renewal Clauses
Many energy contracts automatically renew when the initial term expires, often switching you to a variable-rate plan or a new fixed rate higher than what you originally signed. In most deregulated states, suppliers must notify you 30 to 60 days before an auto-renewal takes effect, but these notices are easy to miss if they arrive as a single page tucked into an envelope or buried in an email. Mark your contract expiration date on a calendar and review your options before it rolls over.
Going Back to the Default Rate
If a supplier contract isn’t working out, you can return to your utility’s default service at any time. The switch typically takes one to two billing cycles (roughly 30 to 60 days) and happens automatically with no interruption to your service. Your utility is required to take you back. There’s no application process or approval step on the utility side, though you may still owe an early termination fee to the supplier you’re leaving.
Once you’re back on default service, your supply charges revert to the current price to compare. That rate may have changed since you originally left, so don’t assume you’re returning to the same price you had before. Check the current number on your utility’s website before making the switch so you know what to expect on your next bill.