Selecting a home electricity plan seems like it should be easy, but the different plan options make it more complicated. Depending on your area, there are likely three to five different types of energy plans available. Each plan has associated pros and cons. Understanding the various plan options as well as recognizing your energy use can help you choose the best plan for you and your family. Below are five common energy plan descriptions so you can compare energy rates across different types of plans.
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1) Fixed-Rate Energy Plans
A fixed-rate energy plan gives you a set energy rate for the duration of your service contract. The only fluctuation you’ll see here is with various distribution and administrative fees, however, the price per kWh you pay should remain the same.
The only risk with this option is that if energy prices drop, you’ll be stuck paying the fixed rate you initially agreed to pay. On the flip side, however, if energy prices go up, you still maintain the lower price. Fixed plans make it clear how much your energy bill will be every month. This is a very low-risk plan, so if you like stability and predictability, the fixed-rate option is for you.
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2) Variable Energy Plans
A variable plan is the opposite of a fixed-rate energy plan. With a variable-rate plan, you pay month to month for your energy. The price will fluctuate based on market demand as well as your electric company’s policies. The benefit of this option is that you can take advantage of falling energy prices and pay that lower rate.
Of course, if energy prices shoot up that also means you’ll be stuck with the higher price. There’s a bit more risk involved with this option, but also more flexibility. Since variable plans usually don’t have a cancellation fee, you can switch energy providers or plans whenever you want.
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3) Market-Rate Energy Plans
Market, or index, plans are a bit more involved than the previous two options. Similar to variable plans, market-rate plans will fluctuate each month. The difference is that the market rate is based on a publicly available index. Ask your electric company about the pricing formula they use and get specific information on how their index works. You’ll also want to know how you’ll be notified of pricing index changes if you select this plan option. Market plans are extremely volatile and are mainly utilized by businesses who want to avoid time-of-use plan premiums.
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4) Time-of-Use Energy Plan
Some energy companies offer plans that have different rates for certain times of the day. By adjusting the rates based on the time of day, energy companies can incentivize customers to use energy when it is cheaper to generate the energy. This also works in the customer’s favor because they can do heavy-energy chores like the laundry or running the dishwasher during times when they’ll be charged less for the energy usage. The time-of-use plan can be very affordable if you don’t mind working your chores around the energy schedule.
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5) Prepaid Electricity Companies & Plans
With a prepaid electricity company, you pay for your energy plan upfront and your balance is charged based on your usage. Prepaid energy plans often come with different benefits so check with your energy provider to see what they offer. For example, some companies will offer a discount if you keep your prepaid balance above a certain number.
Some people prefer prepaid energy plans because it keeps them accountable for how much energy they’re using. They know how much money they put into their account and try to make that last as long as possible. On the other hand, some people struggle with prepaid plans because they forget about their consumption when the payment is being pulled from a balance.
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What Electricity Plan is Best for You?
Some simple research can help you understand your energy plan options. And the right plan can help you save money (so can your energy usage). Before making your decision:
- Ask your energy provider for specific details on the benefits and discounts associated with each plan. Also, see if they offer any special discounts that may apply to you, like reduced rates for those with certain backgrounds or income levels.
- Consider your personal habits. If you like schedules, then a time-of-use plan could be a good option. If you’re better with budgeting, then a prepaid plan could help you reduce your energy usage and save money. Each plan works for different people, so take the time to figure out which one fits your lifestyle and budget needs.
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How Do I Sign Up for Electricity?
Relocating a home? Moving a business? Setting up electricity will be one of the first things you need to do.
Before you pick up the phone and start service, however, find an energy plan that works for your needs and budget. To do that, consider whether you need:
How to Sign Up for Electricity Service
Some states in the U.S have an uncontrolled electricity market. This law allows you to select whether the registered retail provider or utility will provide electricity to your home or business. Texas, New York, Ohio, Pennsylvania, New Jersey, Maine, Maryland, Illinois are some states with deregulated markets!
All you have to do is be informed about your options in your area and state. Once you’re aware of that, you’re good to make a wise decision and the best cheap energy company in your area!
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How to Transfer Electricity Service
In certain situations, you should not select another energy source. There are a lot of sources that offer services in different locations or areas.
When you shift to a new house, you may have the choice to transfer your electricity. But you have to call your energy provider and ask them if they supply electricity to your area or not. Alternatively, your present supplier will deal with informing your utility provider so they can provide electricity to your area at the correct time.
If you live in a controlled area or state, you should contact your local utility for the power supply because you can’t shop around for this service in such areas.
How to Sign Up for Electricity Service
After selecting your new energy provider for your house, follow these steps to sign up for electricity service:
- Call your chosen electricity company or visit their website. If you have questions about energy plans, discounted rates, or something else, you’ll likely want to pick up the phone to make a call for some direct answers and/or recommendations.
- Provide some basic, essential information. This can include your full name, address, and SSN.
- Complete any additional steps: Depending on the electricity company and your energy plan, you may need to complete a credit check to see if you have to pay a deposit.
- Provide the start date: If you’re calling days or weeks in advance (and don’t need electricity service started immediately), be prepared with the start date for service.
- Ask about the first month’s bill & fees: Clarify when to expect the first bill and whether you will see any set-up, transfer, or any other first-month fees.
Fees & Charges for Signing Up
There’s a chance that you might need to put down payment as a deposit for your electricity service if you have less than a normal credit. Depending on the credit score, the deposit can be anywhere from $100 to $500.
Energy prices might fluctuate depending on the state that you’re in, so make sure to ask for the down payment before being ready for it.
When to Call for Electricity Service
It’s preferred that you call the electricity service two weeks before you move into your new house. Many utilities require a turnaround time of a couple of days. Sometimes they may take time to set up the electricity service during the peak times like summers.
Well, it won’t be fun, sitting in a new apartment or house without electricity.
Now, after providing all the information to your utility, take and breathe and relax! Once the sign-up is complete, there’s one thing off your worry list, i.e., electricity supply.
Once the process is done, your electricity retailer will also get in touch with you to inform you if the electricity is up and running.
The Bottom Line
Having no electricity supply in your house is no joke, and you definitely need one to survive in a house. Electricity is the basic utility that everyone needs to perform their day-to-day activities.
If you’re moving to a new house, then you must get in touch with a utility provider or electricity retailer to set up an electricity supply for your house. Make sure to do it on time!