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Electricity Cost Cutbacks Start with Payment Plans

By Nia Lawrence

You really can’t figure out electricity costs these days. The base rate changes more often than the seasons; these are also as unpredictable as the weather. The least you can do is base your dues on the current month’s applicable base rate, and that’s as far as you can get. You’ll obtain the same benefits of paying for cheap electricity, though, if you take advantage of the dual payment plans offered by your local energy providers. Fixed and variable payment plans offer two of the most beneficial results of energy deregulation. The intense competition forces energy providers to put consumer-friendly measures on the bargaining table. Deregulation benefits consumers because they’re given the freedom to choose providers, and the latter often have no other choice but to adjust accordingly to consumer demands.

Most consumers prefer fixed payment plans over the other alternative because it insures them from absurd energy price increases. You won’t have to worry if the market price peaks during your current billable month; you’re actually paying for cheap electricity with the guaranteed fix rate. This offer comes with extended lock-in periods, though, which drag on for a minimum of six months to a lengthy two-year contract. This shouldn’t matter much if you’re used to subscriptions, especially if you’re coming out of a contract-bound utilities service that doesn’t come with base rate guarantees.

In contrast, variable payment plans aren’t cushioned against fluctuating energy prices, so your monthly dues will always depend on current market prices. The absence of a compulsory lock-in contract is its main selling point, especially to consumers who are uncomfortable with extended utilities commitments. Lock-in contracts are beneficial in the long run, but you’ll be slapped with penalty charges if you ever choose to terminate the service or switch to other suppliers halfway through your ongoing contract. Variable payment plans are open-ended, and you’ll even pay for cheap electricity if a price rollback is implemented on your current billable month.

Fixed payment plans are ideal for permanent residences, especially for homes that are currently on mortgage plans. But, your provider won’t charge you for penalties if your reason for termination is a change of residence. This also applies if you’re forced to switch providers because you’ll be moving to a state which isn’t covered by your current electricity supplier. You’ll benefit more from variable payment plans if you’re a transient resident who don’t want to be burdened with lock-in commitments. You’ll risk the chances of paying for peaked electricity rates on your succeeding billable months, though.

You’ll have the opportunity to pay for cheap electricity with either payment plan option, but you’ll have to determine their advantages in relation to your needs and current consumption. You’ll only assess their core benefits if you try both of these in succession. Subscribe to the six-month minimum period for lock-in contracts and see how you fare with this alternative plan. Once the contract expires, shift to a variable plan for the next couple of months. You can always turn down the renewal option and shift to other plans or providers afterwards.

You can’t determine a reference point for cheap electricity rates if you don’t base it on the charge quotes offered by energy companies. You can easily compare energy prices through online switching sites; let comparison sites do all the legwork for you.

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Article Citation
MLA Style Citation:
Lawrence, Nia "Electricity Cost Cutbacks Start with Payment Plans." Electricity Cost Cutbacks Start with Payment Plans. 26 Nov. 2011. 23 Aug 2014 <>.

APA Style Citation:
Lawrence, N (2011, November 26). Electricity Cost Cutbacks Start with Payment Plans. Retrieved August 23, 2014, from

Chicago Style Citation:
Lawrence, Nia "Electricity Cost Cutbacks Start with Payment Plans"

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