Fixed vs variable electricity rates

On a fixed-rate plan, your energy rate is set for the contract term. Your provider has taken on the risk that wholesale prices rise, and priced that risk into what they charge you.

On a variable-rate plan, the rate can change — commonly month to month, and typically at the provider's discretion within the terms you agreed. You have taken on the risk instead. When wholesale prices fall you may pay less than a fixed customer; when they rise, there is no ceiling except whatever the terms specify.

A variable rate is not a scam and it is not a trick. It is the price of electricity without an insurance policy attached.

Almost always at the end of a fixed contract rather than at the start. When a fixed term expires and you do nothing, most retailers move you to a month-to-month variable product, frequently at a rate well above anything you would have chosen. People who believe they are on a good fixed rate are often on that instead.

The other case is a low introductory variable rate that rises after the first month or two. That is disclosed, and it is easy to miss.

Not because variable plans are bad, but because they cannot be honestly ranked next to fixed ones. A projected annual cost for a variable plan requires predicting what the provider will charge in month seven, which is not knowable — so any list mixing the two is comparing a real number against a guess and sorting them together.

Our inventory policy refuses anything whose rate type is not fixed. That means variable, indexed and prepaid products never appear here, and there is no filter that reveals them.