December 14, 2011 DonnyE

Don’t Get Bitten This Winter By Your Variable Electric Rate

Variable electric rates are not all bad but there are problems with them that if not understood can leave you like many others, very confused when your rate goes up.

As the name implies a variable price does not guarantee by any means that your price will always stay the same or go down but never up.

The variable price is just as likely to go up as it is to go down.

Most electric companies in Texas will give you an introductory rate when getting you to switch to their variable price. The rate looks exceptionally low compared to locking in at a much higher fixed contract for 12 months.

Many people simply see that cheap variable intro rate and sign up. Once your rate goes up and you realize it has gone up it is usually too late to switch away before you get a sticker shock electric bill in the mail.

It is possible that 45 days of electric usage could have accumulated during the time your price was jacked up. Since you get billed every 30 days you will likely disconnect a week or so after that.

You will get billed at the higher rate for over a month before you can switch away and this may have caused you to spend $200 or more than you were planning on.

If your price follows an index like natural gas you can rest confidently when your rate is high because you know you will be rewarded when commodity prices come down.

The problem is that most providers do not make it very clear how their variable price works and so you really have no assurance of anything.

To save you all this headache try a fixed rate like what I usually go with. I sign up for 12 months on a fixed plan and have no worries for a year. At the end of the year I get a reminder email to shop prices and I simply renew with who I consider to be the best provider for another year.

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About the Author

DonnyE Donny owns Electricitybid.com and started the website back in 2007 to help energy consumers in Texas and the U.S. shop for electric rates from multiple vetted electric companies. In his spare time he enjoys wrestling with his 6 year old son, 3 year old son and our new 20 month old son. He also likes softball, kickboxing, and doing fun excursions and activities with his wife Melody.

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