We’ve all seen the letters from energy companies saying “lock in today” or “great low rate”, but do you understand what the differences really are?
Different rate plans for your natural gas or electricity supply provide options depending on your personal needs and budgetary preferences.
Here’s a quick quiz to help you find your “energy personality”.
A birthday card from your insurance company
Recycled Paper Napkins
The speed limit
5 to 10 over
A good friend
A savings plan
A favorite plant
A good feeling
Spend time with a friend
Save up for something special
Use what works
Get behind something you believe in
Into the environment
Content with a good book
Excited by shiny objects
Most likely to have a savings account
You Are: Variable Rate
Ever the optimist, you take life as it comes to you. You look at energy prices as a game to be won. The variable rate is perfect for your perpetual positivity. Good luck!
You Are: Fixed Rate
Your friends go to you for advice. Prudent in life and relationships, you want your energy prices to be predictable from one month to the next. The fixed rate is ideal for someone as sensible as you. Steady-on.
You Are: Longer Terms
Coupons, balance sheets, and checkbooks, nothing makes you happier than budgeting. When it comes to your energy, you want to know what’s ahead. A longer term is what you need to fit nicely in your perfected financial plan. Set it and forget it!
You Are: Go Green™
If you had your way, you’d have a tree growing through your bedroom ceiling. Renewable energy is music to your ears because you need power to live, but don’t want it to shorten your future. Earth Day is every day.
Variable Rates – for the perpetually optimistic.
Energy is purchased much in the same way as stocks and mutual funds—in a market that trends up and down with respect to factors like supply and demand, weather forecasts, and storage inventory levels. Variable pricing rides this market like a boat at sea; so when the market is down, you can enjoy the lowest rates available. Sadly, however, the market rarely stays put—which leads us to the next rate model.
Fixed Rates – for the prudent.
Anticipating movement in the market, a fixed-pricing model singles out the commodity prices at a single point in time—and sets the price for the commodity to avoid volatility risk. The intent of the purchase is to “lock in” a price at a favorable time in the market, giving the consumer a solid, low price regardless of what the future brings. Although beneficial year-round, it is generally best to seize this rate option right before a heavy-usage season like winter for natural gas or summer for electricity.
Longer terms – for the budget-minded.
Fixed rate plans typically come in 6, 12, 24, and 36 month increments. Six-month plans are great for coasting through a single season of potential volatility, while the 36-month product is perfect if you have a strict budget you are adhering to with your energy costs. Keep in mind that a supplier can only offer pricing options on the supply portion of your energy, which does not include your utility’s charges.
Renewable Rates – for the activist.
Wind turbines, solar panel arrays, and hydroelectric dams are sustainable ways of generating electricity that you, the consumer, can access. Though, in most cases, the actual electrons flowing through your wire can’t be linked directly back to these sustainable sources, the fact that they are putting power on the grid means fewer fossil-fuels are needed to keep the lights on. For each kWh of output, a sustainable generation facility will receive a Renewable Energy Credit, or REC. This REC can then be transferred to anyone who wishes to be a part of sustainable generation. IGS Energy will “retire” those RECs on your behalf so the energy you use is truly renewable.
Using a supplier – for more control.
The goal with any or all of these pricing options is to help consumers match their personal comfort level, or “energy type”, with the product they purchase. Utilities are a regulated service, which means they can’t offer the product options that a supplier can. But, at the same time, the supplier relies on the utility’s massive infrastructure of pipes, wires, and emergency-response personnel to bring their product to you safely and reliably. This means that even though they can’t change the whole bill, suppliers can at least help with a portion of your over-all energy costs.
To learn more about how a supplier with over 25 years in the industry can help you, visit www.IGSenergy.com/your-energy-choices/