Top 5 Fixed Rate Electric Plans to Consider For Long-Term Savings
Shopping for an electricity plan can feel like a full-time job. With hundreds of plans to compare, understanding energy contracts and the fine print can make things even more confusing.
Fixed-rate plans offer customers price stability and the ability to estimate their bills by monitoring their energy usage. With various plan lengths available, finding the right fixed rate can help customers save money in the long run.
Long-Term Fixed Rate Plans
Long-term fixed-rate energy plans allow customers to lock in a low rate for a longer duration of time. This can help protect against rising electricity prices in the future. This plan best suits homeowners looking to avoid fluctuating prices while still receiving price protection.
These plans typically have a contract length of 12 or 24 months. Depending on the Waco electric company, they may also offer shorter contracts. The most savings are found in the longer-term plans as providers have more time to purchase cheaper electricity and pass it on to their customers.
Green Energy Plans
Many factors go into traditional energy pricing for suppliers and utilities, including market fluctuations, dramatic weather, and highs or lows in supply and demand. Some customers are also concerned enough about climate change to purchase extra clean energy in their monthly bills, which is often called a green plan or renewable energy plan.
In deregulated markets, customers can choose a plan from an energy supplier that offers 100% renewable or renewable plus electricity plans. These are usually backed with Renewable Energy Certificates (RECs), which are tracked and verified to ensure the energy delivered is immaculate, green, and carbon-free.
RECs are the industry’s token for renewable electricity; they represent property rights to 1 megawatt-hour of power produced from renewable sources and then delivered to the grid. By offering a green plan, an energy supplier can satisfy the state’s mandate to buy a certain percentage of its electricity from renewable sources yearly and incentivize developers to build new wind and solar farms.
Members can select a green plan during sign-up when choosing their rate and contract length. When selected, a member’s Electricity Facts Label will reflect the percentage of their plan sourced from renewables and any transmission charges and term lengths.
Some electricity companies offer fixed rate plans that lock in your per kWh rate for the short or long term. These plans are good for consumers who want the security of knowing what their bill will be every month. However, these plan types can be risky because if electricity prices dip, you might pay more than the price you locked in. Plus, breaking a contract on these long-term fixed rates can cost you hefty fees.
Variable-rate energy plans fluctuate based on demand and market conditions. They are ideal if you are willing to keep track of the energy market and can shift your usage when demand is low. These plans also often don’t have cancellation fees and can be a great option if you are not ready to commit to a long-term fixed rate.
The key to finding the right electricity plan is to do your research. This can take weeks if you try to do it manually.
Short-Term Fixed Rate Plans
A short-term fixed-rate electricity plan is a contract that can last less than a year. This is a great option to protect against wild price swings and save money. These plans work best for savvy consumers who shop regularly and can keep up with energy prices. However, time flies, and it can be easy to overlook your contract renewal date. If you miss your deadline, your provider will move you to a default month-to-month variable rate electricity plan known as the Holdover Rate, which can cost you hundreds of dollars.
Short-term fixed rates come in lengths ranging from six months to three years. For the best savings, look for a plan with a term that aligns with your expected duration of residence. For example, a short-term plan may be the right choice if you move or sell your home. Choosing the right length of a fixed-rate contract will help you avoid unexpected energy charges and budget your energy expenses for the long term.
Variable Rate Plans
Often these plans are prepaid but can also be month-to-month. They are a good option if you have a flexible energy usage schedule and can absorb the rate fluctuation risk from bill to bill. Some electricity providers also offer free usage during certain times and weekends with these plans.
Indexed electricity plans are on a monthly or term basis and link your supply rate to an index, like the cost of natural gas. This could be advantageous if you are a savvy consumer who keeps up with energy market trends.
If you want to switch electricity suppliers, it’s best to shop around when rates are low, typically in the summer or winter. Remember that if you’re on a fixed-rate plan, you won’t be able to switch without waiting until your contract ends or paying an early termination fee. This is why many shoppers opt for a short-term or variable-rate plan when shopping for their next electricity supplier. This will give them more flexibility to change providers if they are unsatisfied with their service.