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Compare Electricity Rates

Switching electricity providers is certainly becoming more commonplace as energy deregulation policies continue to spread across the United States. Unfortunately, not everyone takes the best advantage of their choice, particularly if they do not know the correct way to compare contracts.

The Electricity Marketplace

As states deregulate their electricity markets, different alternative electricity providers compete against one another to win the interest of potential customers which can be homeowners or business owners. Typically the electricity providers attract the interest of potential customers by offering a lower electricity supply rate than their current utility. Other incentives may include free electricity on the weekends or a free gift card.

Customers must always remember that the rate is not the only item to focus on when choosing an alternative electricity provider. When comparing the different contracts, make sure to pay attention to the following:

 Elements of a Contract

  • Length of contract. A contract might last for six months, a year, two years, or more. Some electricity providers also offer a month-to-month option that customers can cancel without a fee. When deciding how long you want to sign up for, make sure to think about the contract as a whole
  • Change in rate. Contracts can be fixed, variable, or somewhere in between. A fixed contract charges you the same rate for electricity across its whole duration. If the rate is variable, that means it changes from month to month along with the market.
  • Signup bonuses. Many electricity providers offer extra incentives when signing a new agreement. Consider how this bonus figures in relative to the rest of the contract.
  • Energy source. Some plans, without too much additional expense, allow you to get your energy partly or exclusively from a renewable source.
  • Fees. Make sure to be aware of any fees within a contract. Some electricity providers may be completely free of fees while others may charge a signup fee or a cancellation fee.

All these features go into your agreement with the electricity provider. Consider how they work together when you choose a new company and plan.