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In a deregulated energy market, residential or business consumers can switch energy plans at any time.
If you are locked into a longer term contract with a supplier, you can still switch to another supplier, but you may have to pay an early cancelation fee. Fee terms and amounts differ by supplier and contract. If you're not sure about your contracts early cancellation terms you should review your agreement paperwork.
If you have questions about switching, contact our customer support team.
Suppliers offer many different types of plans for residential and business consumers. At a high level, the suppliers offer two types of plans: fixed rate or variable rate.
Each plan has its pros and cons. If you live in a deregulated market, it’s up to you to research the local suppliers and plans to find the best plan for your home or business.
It is important to weigh the pros and cons with your unique situation and select the right plan, fixed plan or variable plan, before signing a long term contract with an energy supplier.
The simple definition of a fixed rate plan is that you are signing up for a contract with a fixed rate. That rate will remain constant for the term of the contract. Regardless of weather, natural events like hurricanes, or market volatility, your rate will not change. In most cases, fixed rate plans will have a term length of 12, 24, or 36 months.
The simple definition of a variable rate plan is that you are signing up for a contract with a variable rate. The rate will change on monthly basis based on market factors. Variable plans offer more flexibility but also present more volatility in pricing which may affect your monthly electricity bill.
Your business energy bill can be a big blow to your bottom line. While you can try to reduce your usage and become more energy efficient, sometimes your electric rate per kWh is out of your hands.
For businesses, you have additional factors that may affect your energy rates, including:
Business energy rates may vary by the type of business or industry. Energy supplies rely on complex models to mitigate their overall risk (by customer) and will want to know what type of business you operate.
Generally speaking, larger corporations have more buying power than small businesses as their energy usage will be much greater. Many small businesses will join local aggregator groups to gain more leverage on pricing.
Business energy usage varies by type of business and the time of day that the energy is consumed. To determine your rate, suppliers rely on a demand curve. If you use a lot of energy at odd times it can cause you to have a higher rate. For example, churches and religious organizations that are generally using a lot more energy on a weekend often pay more energy than other similar businesses with similar usage amounts.
By signing up for a longer contract with a supplier (2 -3 years), you should be able to secure a lower rate. With longer terms, suppliers are able to forecast usage better. This allows them to purchase energy futures to balance supply and demand. Providers will often pass that savings on to you.
There are many variables that affect rates. In most cases you have no control over these. The most common are:
From 1996-2001, 17 U.S. states deregulated their respective electricity markets. The goal of was to create a competitive market. Suppliers were forced to compete for business for the first time. The goal was to lower prices for both residential and business consumers.
This is not a new concept. Energy choice has been around since the 1980’s. Since then, 27 U.S. states creating deregulated natural gas markets.
Overall, the market remains very complex. Some states have limited participation while others have maintained their regulated markets.