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How to Compare Electricity Rates

How to Compare Electricity Rates

In stateswith deregulated markets, electricity retailers are falling all over each other to sign up new customers. These companies usually offer better prices than existing utilities, but some of them are better than others. This situation can become confusing for energy consumers, who may not know how to compare electricity prices from all of the companies in their area.Homes and businesses in these deregulated states will still receive electricity from their utility company. However, they can choose a retailer from whom the power originates. These retailers will supply electricity to the utility, which now only collects money for operating local infrastructure.

To see how to compare electricity prices in your area, type your zip code into the above box. You’ll see a list of different plans and providers available to residential buildings. If you want to compare business electricity, this list will still reflect providers in your area; however, you may be able to negotiate a better rate for a larger volume.

Making a Choice

When you compare electricity providers, there are a few elements that will affect into the final price.

1. Rate. Electricity prices are usually advertised in terms of cents per kilowatt hour. The differences seem small but can add up to very different annual expenditures. A difference of two cents per kilowatt hour could translate into several hundred dollars by the end of the year.

2. Variability. When shopping for electricity plans, you will also have to make a decision about variable vs. fixed electricity plans. A fixed-rate plan will stay the same price it is now until your contract comes up for renewal (at which point there may be a large change). If the rate is variable, it will change monthly along with the market. Some providers offer a compromise between risk and stability with plans that lie somewhere in between these two options.

3. Bonuses. An independent factor affecting the price of your electricity is the signup bonus. Many companies looking for new customers will offer you an immediate bonus on your energy bill for signing up with them. Be sure to take into account the length of the commitment when assessing the value of these bonuses.

4. Source. You might also decide that you want your electricity to come from a renewable source, such as solar panels or wind turbines; in this case, you may be able to find a company offering exactly this type of product. The price for all-renewable power is sometimes (but not always!) higher than the price of other types.

The Future of Your Electric Bill

Once you sign up for a new electricity provider, you join a freer market for the supply of energy. When your contract ends, you will have the opportunity to go through the same process: check for a new list of suppliers and prices. If you see a better deal, you take it. The site is constantly adding new information about providers, so it’s worthwhile to check back if you’re still looking for the right contract.

Don’t lose hope for an alternative provider if you live in a state without deregulated energy. The success of opening up the energy market in places like Texas and Pennsylvania may entice your state to pursue a similar program. As new options become available, will be ready and waiting to gather information and make it available to you.

To see what the retail electricity situation looks like in your area, simply enter your zip code into the box at the top of the page. You can use this site to compare electric rates or just to get information about the different providers operating in your area. You can also manually navigate to compare electricity rates in different cities and states.

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