When looking to switch Commercial Electricity suppliers in states with Deregulated Electricity, there are different electricity rate types offered by the energy providers. Deciding which rate type best suits your company’s needs depends on your business energy usage and wholesale energy market conditions. Here is a comparison of Commercial Electricity rate types and how they are implemented:
Fixed Electricity Rate
A fixed rate type locks your business into the same kilowatts per hour rate for the length of your contract term. If Commercial Electricity rates rise or fall, you will always pay the same cost. If you are concerned that Commercial Electricity prices will go up, then signing up for a fixed rate plan, and locking into a contract is right for you. These plans have pros as well as cons. You will pay the lower price if Business Electricity prices increase, but you will also be locked into a higher rate, if Wholesale Electricity prices go down.
Variable Electricity Rate
With a variable rate plan for Commercial Electricity, what you pay per kilowatt hour will vary from month to month, based on energy market fluctuations. The wholesale electricity market can be quite volatile. Signing up for a variable electricity rate contract means you will most likely pay a different amount per kilowatt hour each month. But if energy prices fall you will benefit from those decreases with a lower rate. This Commercial Electricity rate plan is works best when wholesale energy prices are flat or decreasing.
Blended & Hybrid Electricity Rates
This is a special rate plan that essentially splits a company’s energy use into a percentage that is fixed rate and some that is variable rate billed. A blended rate electricity rate plan is beneficial for customers with mostly off peak hours of operation. Blended plans give businesses a chance to save money when rates decrease. They also help to soften price increases when costs do spike, since only part of their energy usage is exposed to peak prices. This Business Electricity rate plan is ideal for times when energy markets are volatile.
When choosing a Commercial Electricity Rate plan you need to evaluate your energy usage patterns and the wholesale energy market conditions. A professional energy consultant can assist your business in Comparing Commercial Electricity Rate Types.