Fixed rate residential electricity plans Fixed rate plans lock you into one rate for the length of your contract and will charge you the same amount per kilowatt hour of electricity each month until your contract expires, whether the price of electricity rises or falls. If you’re like a lot of people and think electric rates are only going to go up, then being able to sign a contract and lock in your rate for up to two years, depending on what your electric supplier offers, might be a smart move. After all, if electric prices go up, you’ll be protected from any rate increases until your contract expires. The Mixed Benefits of Fixed Rate Plans: You won’t have to pay for increases if electricity prices go up. If electric rates go down, however, you’ll be stuck paying your contract’s higher rate. Variable rate residential electricity plans Variable rate plans allow your electric rate to change from month to month, based on fluctuations in the market. Because the electricity market is pretty volatile, signing up for a variable rate means you’re probably destined to pay a different amount per kilowatt hour every month. If you think electricity prices might fall, or at least fluctuate enough on the low side to come out cheaper on average than a comparable fixed rate plan, then a variable rate plan might be best for you. With a variable rate plan, you could end up being surprised — either in a good way or a bad way — when you get your monthly bill. The Mixed Benefits of Variable Rate Plans: If electric rates go down, so does the amount you pay for electricity. If electric rates go up, however, you’ll have to pay more.
Posted on: Fri, 26 Dec 2014 12:25:53 +0000
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