When customers in deregulated electricity markets start shopping for new plans, the process of choosing a new provider and plan can be quite overwhelming. Today?s electricity providers — Green Mountain, Brilliant, Entrust, etc — have many different choices and options when it comes to signing up for a new plan.
When shopping for new electricity rates, chances are you will be allowed to choose between a ?fixed? or ?variable? rate energy plan. For many, the choice is simple, and a fixed rate plan is the smart choice. However, before you choose one of these plans, it is important to keep a few tips in mind to make certain you are making a smart investment.
Be cautious of “introductory” fixed-rate plans.
The word introductory can often be misleading. Many companies will try to lure you in with special introductory fixed rates that only last a few months. Make sure to read the fine print and be certain that the fixed rate you are locking into is one that you will be able to keep for a while.
If you can, shop for rates and plans at the right time.
Typically, the best time of the year to lock in low fixed electricity rates is around summertime. In the spring, mid-March is the best time to lock in low rates, while mid-October to late November typically have the highest rates. While these months may not always line up with the end of your previous contract, keep these things in mind when you shop for electricity rates.
Ultimately, if you find a new electric rate that’s lower than your current one — it makes sense to switch, regardless of the time of year.
Moving soon? Shop around for shorter plans.
If you are not sure that you will be staying in your current location for long, look into short-term fixed rate plans. These are a great way to lock in low prices for 6-months at a time, while still giving you some flexibility. Many times some short-term plans come with higher prices, but if you shop around, there are several retailers that will offer low-cost fixed rates for their consumers.
For convenience, longer plans are probably more ideal.
Not every retailer will offer long-term fixed rate plans, but there are some that will let you lock in low rates for up to two years at a time. This is a great solution if you don?t plan on moving and if you don?t want to worry yourself with the hassle of switching plans or providers.
Biggest savings are usually found in longer plans.
Typically the best savings with fixed-rate plans come with 12-month term plans. As you compare different rates, chances are you will see a difference in fixed-rate prices between 6, 12 and 24 month plans, even within the same company. If you are most interested in savings, then 12 month plans are the right choice.
Know what happens when your plan ends.
Before you sign on the dotted line of any new fixed-rate energy contract, it is important to know what happens to your account when your contract expires. Many retailers will automatically roll you over to a variable rate plan if you don?t switch plans or terminate your service. Be aware of what will happen to your plan, so you can be prepared to take action when it expires.
With a fixed rate plan, consumers can enjoy knowing that their energy bill will remain reasonable month after month and they do not have to spend extra time focusing in on the market to look for any changes in rates. There is less stress associated with one of these plans, and less worry about what the monthly bill will look like.
For many consumers, choosing a fixed rate energy plan is a smart choice, particularly if you take the time to keep these tips in mind as you shop for a new contract.