As the old adage goes, you shouldn’t fix something that isn’t broken. While sticking with your existing energy supplier would definitely be easier than switching, there are actually good reasons to make that change. When you swap to a competitor, it gives you the power of choice and the ability to save a lot of money. That way, you end up with the best solution for you while also paying the best price.
Until you take a deeper look, you won’t know how much money you could be leaving on the table. With more and more people working from home, it makes sense that the average home is consuming more energy than ever. That makes higher rates hurt your wallet a lot more than usual.
Reasons You Might Want to Change
Being unable to plan for how much money you have to pay is quite a nuisance. This is especially true if your usage doesn’t even change that much from month to month. By switching to a fixed rate plan, you can ensure more normalcy in your bill total unless you suddenly start using way more power than usual.
Swapping to a Better Provider
If you find your current company difficult to work with, you can always take your business elsewhere. Thanks to energy deregulation, you have the right to shop around to see who would be a better fit.
This doesn’t just refer to getting new benefits. Your current plan might have features that just don’t fit your lifestyle. For example, a “Free Nights” plan would do nothing for you if you work the graveyard shift somewhere else. If you are signed up for a bunch of incentive that don’t apply to you, shopping around could be highly beneficial.
Is Swapping Worth It?
This is something that will vary from customer to customer pretty widely. In some cases, you could be paying way more than necessary for energy. There are many variables that can be attributed to the fluctuation of prices.
For example, rates in the summer are normally higher because everyone is using more power on air conditioning. If you look again later in the year, you might find some fantastic prices that will keep more dollars in your pocket.
It all starts with examining your current bill and comparing it to what the competition can offer. Just remember that you may have to pay a cancellation fee if you break from a contract.
Who is the Cheapest?
Like with above, this can and will change all the time. That is simply the nature of the energy market.
Rates is just a single piece of the puzzle for you to examine when looking at providers. You should consider different plans such as variable or fixed rate options to see what would ultimately save you the most cash. There are also some providers that have green energy alternatives, if that’s important to you.
One thing to be careful of are limited time promotions and deals. These often come with conditions that could cost you a lot more in the long run. Be sure to read all of the print when considering one of these.
Two Big Things to Remember
1. If you have spotty service, that isn’t something that switching suppliers will necessarily fix. As the name implies, suppliers only generate the energy. The actual transmission into your home is on the electric utility. If the problem is on the utility side of things, swapping to a different supplier will do nothing to improve your situation.
2. Because energy is highly regulated, all suppliers have to be licensed. Be sure the company you are considering to do business with has a license.
Four Things to Check for Billing
As mentioned before, comparing your current bill with a new service is how to check if you’ll save money. Four things to compare are:
• Dollar per kWh
• Any additional taxes
• Monthly service charges
• Average amount paid per kWh for the past year
Your current supplier should have all that information available either through a phone call or on their website.
Three Rate Plans to Examine
1. Fixed Rate: A fixed rate means that you’ll pay a single rate per kWh no matter what happens. That protects you from a sudden spike in energy prices, ensuring you are locked into your current dollar amount. However, the inverse is also true. When the market suddenly drops, you’ll still be paying the amount you signed up with. It’s worth it for people who can’t afford a surprise price hike or other variance.
2. Variable: If you don’t want to overpay for energy, settling with a variable plan is a good choice. While you will have to pay more when the cost of energy goes up, you’ll also save when it goes back down later in the year. The benefit of this is you can adjust your use when rates are high to control your final bill. If you are able to take on the risk of the sometimes-erratic market, Variable could be for you.
3. Hybrid: For a little bit from both columns, a hybrid plan is when a portion of your bill is set at a fixed rate while the rest is calculated at a variable rate. This gives you some of the benefits of fixed AND variable prices without fully committing to one of them.
Six Important Details of Any Plan
1. Is the listed price per kWh fixed or variable?
2. Are there monthly service fees or any other costs to pay?
3. Does the listed price have taxes factored in?
4. Is there a contract and is the offered rate for the period of the whole contract?
5. Are there other savings through discounts or promotions?
6. Is there an early termination or cancellation fee?
Two Things to Watch Out For
1. Auto renewal: You will want to know if your plan is signed up for auto renewal. If it is, that means your provider will automatically tack on another period of service once your current contract ends without your permission.
2. Limited Time Promotions and Deals: Companies might try to bait and switch you by enticing you with low introductory prices. Once those first few months are over, they raise the rates much higher, and you can’t cancel without paying a big fee. Just remember to read all the fine print before agreeing to anything.