Source: Photo by Sharon McCutcheon via Unsplash
In case you missed our latest articles, let’s do a little recap about deregulated energy and how having a fixed-rate electricity plan may benefit your wallet – or not. If you live in states like Connecticut, Delaware, DC, Illinois, Maryland, Massachusetts, New Jersey, Ohio, or Pennsylvania, chances are you have the power to choose. But what does this mean? It means you can choose the supply portion of your energy bill & ultimately start saving on your monthly costs.
Well now that you freshened up your mind, we will help you understand 2 facts about fixed-rate electricity plans so you can make an informed decision about it. Just remember, you don’t have to go through this tedious process alone. We’ve been doing this for so long that you can leave that research on our hands. We will help you find the best fixed-rate electricity rates out there, with great terms and outstanding customer service. Well, without further ado, let’s start with the facts:
1. Understand Variable and Fixed-Rate Electricity Plans
If you live in a state where the electricity market is deregulated and you have not changed your energy provider, you might be at a variable rate. This is what, generally speaking, most people are paying right now. How can you check this? Talk to your utility company, they will be able to guide you through the details of it. If you’re not much into calling check out your energy bill, all details must be there. So now that we’ve set up the basis to start energy-saving, it’s important to understand electricity use and costs.
Variable-rate and fixed-rate plans might both be available from your electricity provider. But, how do these rates work? And which will help you save the most money on your electric bill? Understanding variable vs. fixed-rate electricity plans and the benefits they provide is the first step in determining which is best for you.
Variable Electricity Plans
In brief, this is a plan where the kWh price of your plan adjusts itself to peak season, seasonality, or daytime. These plans are usually controlled by demand response and time differences. This means that when the demand is higher, the cost per kilowatt-hour is usually higher. You will get per kWh prices that vary by hour, day, month, season, etc.
In general, they’re plans that are based on market fluctuations. So, the higher the demand, the more resources are needed to produce your electricity and the higher the final costs for you. We have an article on baseload and peak-load pricing for you to better understand it.
These rates also have benefits – despite what most people think:
- You can adjust your routines to use appliances when the price is cheaper. Follow market prices and adjust your usage for peak and off-peak hours.
- No commitment is required. They run every month, so you are likely to have no contract period, termination fee, etc
What is the main downside? In the long run, variable rates can make it difficult to budget for expenses and forecast monthly costs.
Fixed-Rate Electricity Plans
On the other hand, with fixed-rate electricity plans you can be sure that whatever happens in the market (extreme temperatures, oil prices, etc.), the price of electricity you pay will remain the same. This can help you control your budget because there will be no difference in the rate you pay throughout the entire contract. However, in the unlikely event of a market price drop, you may end up paying a higher-than-average cost for energy.
So, what’s in it for you?
- Well, As we mentioned before, you have the power to choose, you’re entitled to select a kWh rate and fix it for the entire contract period. No need to deal with different monthly fees and seasonality. Knowing exactly what you pay per kWh will give you full control over your monthly payments.
- It’s more than just the rate type. When you open the door to new actors. The new providers will find ways to attract your attention and therefore provide you with lower energy rates. Give it a try. Go on our marketplace and compare the rates, you will find a quick chart that compares market quotations and perks of each. You will end up with an affordable quotation that suits your needs.
- Use your energy when you want it, not when the load is lower.
Sounds good right? You might be asking what’s the catch!
Well, we have great news for you, there is no catch! Just bear in mind that one of the defining factors in defining between variable or fixed-rate electricity rates are contract terms. Generally speaking, the longer the contract period, the cheaper the fee. If you want to maintain an affordable rate for the long-term and stay the same regardless of market conditions, then fixed-rate electricity plans are your ideal choice.
2. What’s the best time to get a Fixed-Rate Electricity Rate?
This seems like a basic answer but well… of course, the best time to lock in your electricity rates is when electricity is cheaper. This could be either autumn or spring. Summer and winter electricity market rates are higher due to people’s increased use of air conditioning and heating. But does this mean summer is a bad time? Absolutely not!
Even if it’s summer, you should still lock in your rate. In fact, locking in your rate can provide significant benefits in the short term, such as price stability throughout the year. Fixed-Rate Electricity Plans can mean not having to worry about using your air conditioner on a hot day. Sounds cool, huh?
At Click2Power.com we can help you with this. We do all the research for you, to make sure you end up with the best offer:
- The best rates
- Easy enrollment
- Full control of your costs with fixed rates
- No Hidden fees
- Exceptional customer service!
Do you want to learn more about how you can benefit from Energy Deregulation? Feel free to call us now at (833) 680-2025 or fill-up the form on our website—one of our energy experts will be willing to help you with all the information you may need!
4 Responses