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12 Month Electricity Plans


12 Month Electricity Plans

When you sign up with a new electricity provider, you have to make a decision about the length of your contract. 12 month electricity plans are some of the most common. You agree to use a new company for one year, after which time you can choose a new provider.

Options

Power companies offer contracts in all kinds of increments. Common lengths for electricity contracts include 6, 12, and 24 months. 12 month electricity plans are therefore a more or less intermediate option. More exotic lengths include 1, 3, 36, and 48 months.

Sometimes other features of a contract, such as the power source, can change along with the length. You’ll also have to contend with cancellation fees, which you’ll have to pay on your way out if you try to leave a long contract early. Make sure you know all the components of the plan you’re selecting.

Choose a Contract Length

How long should your contract be? There are a few things to consider when making your decision:

  • Do you know the company? If you don’t know the company you’re signing up with, you may want to opt for a shorter contract length. If things go terribly wrong, you’ll be able to switch providers more quickly. Generally speaking, if you’re not sure about a plan you should probably opt for a shorter contract.
  • How often do you want to reassess your energy bills? If you enjoy shopping around for a good deal, you may want something shorter than a 12 month electricity plan. You can keep coming back to CompareElectricity.com to see what new companies have entered the market and what offers have changed.
  • Is there a bonus? Many companies offer a signup bonus to entice customers into a longer plan. You can check to see whether this bonus outweighs issues of risk and rate that pertain to your contract choice.

Fixed vs. Variable Rate Plans

Your thinking about rate fluctuation should also have an impact on the length of your contract. Most companies will allow you to choose between fixed and variable rate plans. With a fixed plan, you pay each month at today’s rate. That’s the price you see when you enter your zip code in the box above. WIth a variable rate plan, you monthly rate will change along with the market.

Choosing a new variable rate plan is very likely to save you money compared to the default plan offered by your utility company. A long fixed rate plan, on the other hand, may initially be more expensive than a variable plan, since you’ll probably be beating the energy market further down the road.



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