Guaranteed Savings

It seems crazy but it’s true. Many alternative electricity providers are so confident in their superiority to the default option that they can guarantee you savings on your electricity bill.

Two Types of Plans

There are two different ways that the rate can be determined for an electricity compact.

• A fixed-rate plan keeps the rate the same for the duration of the contract. The company discloses the rate ahead of time and you agree to it when you sign the contract. The fixed-rate is usually a little higher than the initial variable rate, but there’s no risk that you’ll end up paying a huge bill for high prices. You might end up saving money relative to the market, but nothing is guaranteed.
• A variable-rate plan changes from month to month, along with the market. This is how your default provider operates now. Because your local utility offers a predictable and known price, alternate providers can promise you that they’ll give you a better deal.

If you’re choosing a variable-rate plan, be sure to scrutinize the terms of the contract carefully! Sometimes the rate you’ll see listed in big and bold numbers isn’t the rate you’ll be paying for the duration of the deal. Just because a company advertises an initial rate that’s cheap does not guarantee that it will always be cheap. If you want to be certain that you’ll always be saving money, make sure your company’s prices will always be lower than the utility’s.

Price to Beat

In some areas, this competition is formalized as the Price to Beat. The Price to Beat is a well-publicized value that describes what consumers would be getting according to the algorithm used by their old electricity company. Obviously, an alternative provider worth its salt is going to beat the Price to Beat, and many promise that they can do so. (In Texas, the Price to Beat is determined by the Public Utility Commission of Texas.)

If you sign up for this type of variable-rate plan, you can rest easy knowing that you’re saving money without doing much other than filling out some papers.

Do Even Better

Once you’ve figured out which companies are always going to give you a better deal than the utility, you can start to make a choice between these. Pay attention to past rate changes, signup bonuses, and anything else that might make a difference to the contract.

By comparing providers available in your area, you can find the absolute best deal on electricity. Once you realize that your savings are guaranteed, why not maximize them?