What an electricity supplier is and how it differs from a network operator

Find out what an electricity supplier is, what it does, how it differs from a distribution network operator and how to choose the best tariff.

An electricity supplier is the company you contract your electricity supply with. In other words, the company that sells you energy, offers you a tariff, issues your bill and manages your contract terms.

Put simply: the supplier buys electricity on the wholesale market and then sells it to households, sole traders, SMEs or businesses. That is why it is the company that appears on your electricity bill and the one you speak to when you want to change tariff, review prices, adjust contracted capacity or clear up questions about what you are paying.

One of the most important points is that you can freely choose your electricity supplier. If you find better terms, you can switch company. What you cannot freely choose is the distribution network operator, because it depends on the geographical area where your supply point is located.

And that is usually where the confusion lies: supplier and network operator are not the same thing.

What an electricity supplier is

An electricity supplier is the company that sells energy to the end consumer.

The clearest way to explain it is this: if you have an electricity contract, the supplier is the company you sign it with, the one that charges you the monthly bill, and the one that can offer you a better or worse tariff depending on your consumption habits.

A simple definition

An electricity supplier is the company responsible for selling you electricity and billing you for what you consume.

Its main functions are:

• buying energy;
• selling it to the end customer;
• offering tariffs;
• issuing bills;
• managing contracts;
• handling commercial queries;
• processing capacity or ownership changes;
• advising on supply terms.

It is not necessarily the company that owns the cables or the electricity network. That falls to the distribution network operator.

How it buys and sells energy

The supplier acquires electricity on the electricity market or through purchase agreements, and then offers it to its customers through different tariffs.

It can sell energy to:

• private individuals;
• residents' associations;
• sole traders;
• shops;
• SMEs;
• industry;
• large consumers.

The final price the customer pays depends on the contracted tariff, capacity, consumption, network tolls, charges, taxes and other items included on the bill.

Why it is the company that appears on your bill

Your electricity bill is issued by the supplier. It shows items such as:

• contracted capacity;
• energy consumed;
• price per kWh;
• time bands;
• meter rental;
• network tolls and charges;
• taxes;
• add-on services, where applicable;
• total amount payable.

So if you have questions about your bill, you normally need to contact your supplier.

What you can freely choose as a customer

You can choose:

• which supplier to contract with;
• which tariff to accept;
• whether you want the open or regulated market;
• what capacity to contract;
• whether you want a fixed, index-linked or time-band tariff;
• whether you accept add-on services;
• whether to switch company.

This freedom of choice is one of the cornerstones of the electricity market.

What an electricity supplier does

The supplier is the commercial side of your supply. It does not maintain the cables in the street, but it does manage your contract.

Selling you energy

Its basic function is to sell you electricity for your home, premises, office or industrial site.

In practice, you do not physically choose "the electricity", because it all travels through the same network. What you choose is the company that bills you and the commercial terms under which you pay for that energy.

Issuing and collecting the bill

The supplier calculates the amount payable based on:

• recorded consumption;
• contracted tariff;
• capacity;
• taxes;
• regulated costs;
• discounts or promotions;
• add-on services.

It then issues the bill and collects the corresponding amount.

Offering tariffs and terms

Each supplier can offer different types of tariff:

• fixed price;
• index-linked price;
• time-of-use pricing;
• business tariffs;
• self-consumption tariffs;
• bespoke contracts for large consumption.

That is why two customers with the same consumption can pay very different amounts if they are on different tariffs.

Managing contract changes

The supplier can process:

• change of contract holder;
• capacity changes;
• tariff changes;
• changes to bank details;
• new supply connections;
• contract termination;
• changes of arrangement.

For companies wanting to operate as market agents or structure their energy activity, it may be necessary to look at more complex processes, such as setting up as an electricity supplier.

Handling queries about prices, consumption and bills

If you do not understand why your bill has gone up, if you want to compare tariffs or if you need to review your contract, the supplier is your first point of contact.

The difference between supplier and network operator

This is the part that raises the most questions.

The supplier sells the energy. The distribution network operator transports it to your supply point via the electricity network.

What the supplier does

The supplier is responsible for:

• selling electricity;
• billing;
• offering tariffs;
• managing contracts;
• handling commercial queries;
• proposing changes;
• reviewing terms;
• processing amendments.

What the network operator does

The network operator is responsible for:

• maintaining the electricity network;
• physically delivering electricity to the supply point;
• handling network faults;
• taking meter readings;
• assigning the CUPS code;
• carrying out technical connections;
• guaranteeing supply quality in its area.

Which company you can choose and which you cannot

You can choose your supplier.

You cannot choose your network operator.

The network operator is assigned according to where the home, premises or business is located. Even if you switch supplier, the network operator stays the same as long as you do not move.

A simple example

Imagine you change tariff because another company offers you better terms.

What will change:

• who bills you;
• the contracted price;
• customer service;
• the contract terms.

What will not change:

• the meter;
• the cables;
• the network;
• the network operator in your area;
• the physical quality of supply.

Who to call for each problem

Knowing who to call saves time.

If you have questions about your bill

Call the supplier.

For example:

• you do not understand an item;
• the amount has gone up;
• you want to review the price per kWh;
• there are add-on services;
• you need to change tariff;
• you want to update payment details.

If you want to change tariff

You also need to speak to the supplier.

You can compare options and choose another tariff within the same company, or move to a different supplier.

If you need to change your contracted capacity

The request is made through the supplier, even though the network operator is technically involved in validating or carrying out the change.

If there is a network fault

If the problem affects the network, the network operator is responsible.

For example:

• a general outage in the area;
• problems with the service connection;
• an external fault;
• network incidents;
• technical problems with the meter.

If you want to set up a new supply

New connections are usually processed through a supplier, which coordinates the process with the network operator.

If you need your CUPS code

The CUPS code identifies your supply point. It is managed by the network operator, but you will find it on the bill issued by your supplier.

Types of electricity supplier

There are two broad types: open-market suppliers and reference suppliers.

Open-market suppliers

These are companies that offer tariffs on their own terms.

They can offer:

• fixed prices;
• time-band pricing;
• index-linked tariffs;
• discounts;
• add-on services;
• bespoke contracts;
• special terms for businesses.

Here the customer can compare and choose.

Reference suppliers

These are the companies authorised to offer the regulated tariff, known in Spain as PVPC.

They also handle certain specific situations linked to the regulated market.

Fixed, index-linked and regulated tariffs

A fixed tariff maintains an agreed price for a set period.

An index-linked tariff is tied to the market price, normally adding costs and a management margin.

A regulated tariff follows the terms set for the PVPC.

How this differs for households, SMEs and businesses

A household usually wants simplicity, stability and a good price.

An SME also needs to review:

• contracted capacity;
• consumption patterns;
• penalties;
• tariff periods;
• add-on services;
• spending forecasts.

An industrial site or large consumer requires a more complex energy strategy, because small differences in price can have a significant impact by the end of the year.

What changes when you switch supplier

Switching supplier does not mean someone comes to change the cables.

The tariff changes

The following may change:

• price per kWh;
• capacity price;
• time-band structure;
• lock-in terms;
• discounts;
• how you are billed;
• included services.

The contract terms change

Before signing, review:

• duration;
• penalties;
• lock-in period;
• fixed or variable price;
• add-on services;
• renewal terms;
• how prices are updated.

Service and support may change

The company looking after you also changes.

That can affect:

• response times;
• how clear your bills are;
• advice;
• incident handling;
• optimisation proposals.

The cables and network operator do not change

The network operator stays the same, because it depends on the area.

Supply should not be cut off

Switching supplier is an administrative process. It should not involve any interruption to your electricity.

How to choose an electricity supplier

Choosing a supplier should not come down to a promotion alone.

Review the price of energy

The price per kWh matters, but it is not everything.

You also need to review:

• capacity;
• fixed costs;
• services;
• terms;
• penalties;
• contract duration.

Analyse contracted capacity

Many bills are oversized. If you have more capacity than you need, you overpay every month.

For businesses, this can be decisive.

Compare lock-in periods and add-on services

An apparently cheap tariff may include a lock-in period, maintenance or services that push up the total.

Understand whether the tariff is fixed or index-linked

A fixed tariff gives predictability. An index-linked one can be attractive in some contexts, but it demands a better understanding of the market.

Weigh up service, transparency and advice

Price is not everything. A supplier or energy adviser who explains your bill clearly can help you make better decisions.

Review your real consumption needs

Consumption is not the same for:

• a main home;
• a second home;
• a restaurant;
• an industrial unit;
• an office;
• a factory;
• a shop with refrigeration units.

The tariff therefore has to match the real profile.

Electricity suppliers for businesses and SMEs

For a business, choosing a supplier has more impact than for a household.

Looking at the price per kWh is not enough. You need to understand how, when and how much is consumed.

Why the price per kWh is not enough

A business can overpay because of:

• badly contracted capacity;
• excess demand;
• reactive energy;
• inefficient consumption patterns;
• billing errors;
• unnecessary services;
• unsuitable contracts.

Managing capacity, consumption and penalties

For an SME, reviewing the bill can uncover savings opportunities.

For example:

• reducing or adjusting capacity;
• changing time bands;
• reviewing penalties;
• spotting errors;
• optimising consumption habits;
• renegotiating terms.

An energy bill control service can help analyse whether the business is paying what it should and whether there are correctable discrepancies.

Reviewing energy bills

A commercial electricity bill can be hard to interpret.

It is worth reviewing:

• active energy;
• reactive energy;
• contracted capacity;
• excess demand;
• network tolls;
• charges;
• taxes;
• time bands;
• average price;
• included services.

Contracts matched to hours and activity

A bakery, a hotel, a factory and an office do not need the same tariff.

The key is matching the contract to the consumption pattern.

Large consumers and tax optimisation

Large energy consumers should review not only the price of energy but also any applicable tax benefits or exemptions.

Here it may be worth looking at the electricity tax exemption for companies, provided the activity and consumption meet the relevant requirements.

What to check on your electricity bill

The bill is the document that shows whether the contract is properly set up.

Contracted capacity

This is the fixed cost you pay for having a given level of capacity available.

If it is too high, you overpay. If it is too low, you may suffer cut-outs or limitations.

Energy consumed

This is the electricity you have actually used.

It is measured in kWh.

Time bands

Many tariffs have different prices depending on the hour or period.

For businesses, shifting consumption can mean savings.

Network tolls and charges

These are regulated costs included in the bill.

They do not depend directly on the supplier, even though they appear on the invoice.

Add-on services

Check whether you have contracted maintenance services, insurance or extras.

They sometimes go unnoticed.

Electricity taxes

The bill includes taxes that can carry significant weight, particularly for businesses with high consumption.

Possible errors or discrepancies

It is worth checking:

• estimated readings;
• duplicate items;
• unrequested services;
• tariff changes you did not understand;
• unoptimised capacity;
• penalties.

Common mistakes when choosing a supplier

Looking only at the promotional price

An introductory offer can change after a few months.

Look at the final price and the renewal terms.

Not checking the lock-in period

Some tariffs carry a penalty for early cancellation.

Contracting more capacity than you need

This is one of the most common mistakes in businesses and commercial premises.

Not understanding index-linked tariffs

An index-linked tariff can be useful, but it is not suitable for everyone.

Not reviewing add-on services

A discount can be cancelled out by extras you do not need.

Not auditing bills in business settings

An SME can be overpaying for months without noticing.

How to switch electricity supplier

Switching supplier is usually straightforward.

What details you need

You will normally be asked for:

• holder's details;
• ID or company tax number;
• supply address;
• CUPS code;
• contracted capacity;
• bank account;
• current bill;
• contact details.

How long the switch usually takes

The timescale can vary depending on the case and the meter reading cycle, but it normally requires no physical work at the home or business.

Whether supply is cut off

There should be no interruption. Supply keeps working because the network is maintained by the network operator.

Who handles the process

The new supplier usually takes care of managing the switch.

What to check before signing

Before accepting, review:

• price;
• duration;
• lock-in period;
• add-on services;
• penalties;
• update terms;
• type of tariff;
• included support;
• possible costs.

When it is worth reviewing your supplier

If your bill has gone up

An increase may be down to price, consumption, capacity, taxes or contractual changes.

If your consumption has changed

For example:

• more machinery;
• new operating hours;
• home working;
• business expansion;
• refrigeration units;
• air conditioning;
• new shifts.

If you run an SME or business

SMEs usually have room to optimise if they have never reviewed their contract.

If there are penalties or excess demand

Excess capacity demand or reactive energy can push up the bill.

If you want to improve your terms

Comparing suppliers can help you find a tariff better suited to your profile.

Conclusion

An electricity supplier is the company you contract your electricity with — the one that sells you energy and charges you the bill.

The distribution network operator, by contrast, is responsible for the electricity network, the meter, the CUPS code and infrastructure faults. You can choose your supplier, but not your network operator.

That distinction is key to knowing who to call, what you can change and how to check whether you are overpaying.

In households, choosing the right supplier helps you find a more suitable tariff. In SMEs and businesses, the choice can have far greater impact, because capacity, operating hours, taxes, excess demand, reactive energy and contract structure all come into play.

The best decision is not always the tariff that looks cheapest at first glance, but the one that best matches your real consumption.