4 Factors That Impact Electricity Prices & What You Can Do

Read Time: 3 Minutes

What Causes Energy Prices to Change?

Energy is a complex and ever-changing commodity. There are economic, political, and regulatory factors that can drive prices up or down. As a business owner most of these factors are out of your control, yet they still have an impact on electricity prices:

Supply & Demand

The availability of energy from natural resources such as nuclear, coal, gas, and oil can impact price fluctuations. As demand for heating, cooling, and light vary, so can prices. Depending on your business, you may have peak times when you use more energy than not. In areas where there are multiple suppliers, prices may be lower than usual due to competition and higher supply.


Both predictable and unpredictable changes in weather can have an impact on energy demand, which impacts price. Business owners typically see increased prices in the summer as a result of higher energy demand for cooling, and again in the winter when temperatures drop and there is a higher demand for heating. The more energy generation needed to meet that demand, the more it drives up the price.

Natural Resources

As we see a shift from the use of coal to natural gas, the costs associated with this change can cause price fluctuations. The way energy is generated also helps to determine the price. Some generation methods (i.e. wind energy) can be more expensive than others (i.e. solar energy). How energy is procured varies per your location and energy supplier.

Government Regulations

Both the federal and state utility commissions are constantly changing and updating regulations which can affect energy prices. These regulations vary by state- in some states the utility commission fully regulates prices. If you live in a deregulated state, you have the option to choose your own supplier and rate. This also means you can search for the cheapest and most convenient plan to meet your needs.

While you can’t control many of the factors that impact electricity prices, if you live in a deregulated area there is one thing you can control- shopping for the best rate. The best way to protect yourself from changing electricity prices is to select a long-term energy plan. By signing up for an energy contract, you protect yourself from price fluctuations with a set energy rate. This makes it easier for long-term budgeting and forecasting for your business. EnergyBot allows business owners to easily compare plans and lock in the best rate.

Written by Team EnergyBot

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