Should You Choose a Fixed- or Variable-Rate Electric Plan?

Two very different plans: Which is right for you?

One of the great things about energy deregulation is that when it comes to your electricity supplier, you have many options. You have the freedom to choose the supplier and options to fit your needs, your budget and your values.

However, all those choices can be challenging—even downright confusing—to wade through. One decision that may leave you with several questions is that of choosing a rate plan. We’re here to explain rate plans and how to choose the one that best works for you.

Your rate plan options with Discount Power

At Discount Power, we believe in simplicity and transparency when it comes to helping you save on your electricity costs. We offer both fixed-rate and variable-rate plans. Here are the foundational basics of each option:

Fixed-rate. When you enroll in our fixed-rate plan, your rate remains the same and will not change for the length of the contract term.

Variable-rate. With our variable-rate plan, your electricity rate changes from month to month, based on market prices.

Why do electricity rates change?

Several factors can influence your electricity rates:

• Supply and demand, like all other energy sources, is a main driver of rate fluctuations.
• The weather is another big one. Extreme weather affects the demand for electricity, which impacts the supply. Weather can also cause damage to the electricity grid. All of those can drive up electricity rates at certain points of the year.
• Electricity is often generated by other fuels in combustion turbines. Since those fuels have to be purchased, the prices for those are factored into your electricity rates. Higher fuel costs lead to higher rates, which are then passed along to the consumer.

Factors to consider when you choose a rate plan

There is no one right electricity rate plan for everybody. Your needs are unique. So before you choose a rate plan, you have to decide what’s important to you.

With a fixed-rate plan, you get stability and security. You know what your rate for electricity will be each month. There are no surprises; you won’t endure any price spikes caused by weather, supply and demand, or other factors. This is perfect for folks who want to maintain consistency on budgeting.

There’s only one catch: this also means that your electricity rate will not go down—even if the market price drops.

However, no other plan gives you this kind of control! Want to give it a try and see how the market rates change over time? Enroll in a fixed-rate plan for a few months before committing to a longer-term contract. Or do you know for sure that you want the stability that comes with a fixed-rate plan? If that’s the case, you can enroll in our fixed-rate plan for a year or even longer.

Our variable-rate plan gives you the greatest opportunity to save money against market prices. If the electricity rates go down, you’ll pay less! This is a great option for people who don’t want to be locked into a long-term commitment. There are no cancellation fees—and you’ll have the freedom to switch providers or start a new plan whenever you want. If you frequently move residences and do not want to be locked into a plan, this is perfect for you.

Have questions about your rate options with Discount Power? Contact us today. We will be glad to help find the perfect options for your home or business whether electricity, or natural gas!