Understand Your Choices
The Public Utility Commission wants you to understand your choices when you are shopping for electricity service. Here are a few things you should know before you start shopping:
Contracts and Terms
Some Retail Electric Providers offer plans with no minimum contract period ("month-to-month" plans), and others may offer plans with contract periods as long as three years or more. Contracts with a minimum term may have a penalty if you cancel before the contract period ends. Make sure you understand what happens at the end of the contract period with respect to the pricing of your service, and ask the Retail Electric Provider if you are unsure.
Fixed and Variable Electricity Rates
A fixed electricity rate will generally remain the same throughout the term of a contract (with minor exceptions) and a variable electricity rate can go up or down based on the monthly changes in the electricity market. If you choose a plan with a long contract period and a fixed rate, you will have certainty that your price will not change during that time. While this may help your household budgeting, if market prices fall you may have to wait until your contract expires to enjoy a lower price. Variable rate plans can provide the benefit of an immediate pass-through of falling market prices, but will also rise if natural gas and electricity prices spike due to natural disasters or cold winters. Make sure you understand how and under what conditions your rate can change when selecting a plan, and pick the one that's right for your needs.
Renewable/Green Energy
If you want a plan that is renewable, check the provider's Electricity Facts Label to see how the plan's electricity is generated from renewable resources such as wind, solar, hydroelectric, geothermal, landfill gas, or biomass. Retail Electric Providers are also allowed to designate products that use electricity generated by natural gas, which is a relatively clean fuel, as "green". Make sure you understand these distinctions when researching your options.
