The way your energy provider calculates your electricity rate determines what you pay each month. Learn more about electric variable and fixed rates, as well as how to compare rates, to help you make the right decision.
What is an Electric Variable Rate?
A variable rate is an all-inclusive, per kilowatt-hour (kWh) rate that fluctuates monthly, daily or even hourly. When you choose to be billed according to the variable rate, the price you pay varies each billing cycle based on current prices in the wholesale power market.
If the market price increases, so does your individual rate. Likewise, if the market price decreases, your rate does, too. There’s no limit to how much the price may change from one billing cycle to the next, or from one year to the next.
Unpredictable bills may sound a lot like what you’re dealing with now, but thanks to lower overall rates from UGI EnergyLink, the total amount paid by the end of the year is likely to be significantly lower. It may even end up being lower than if you choose the fixed rate option.
What is an Electric Fixed Rate?
Electric bills are comprised of an Energy portion (or commodity) and a Transmission portion (or basis). Some providers fix your energy rate, but transmission fees continue to fluctuate. When this happens, the price you see on your bill is higher than you expected.
At UGI EnergyLink, our rates are transparent. When we quote you a fixed rate, it’s the actual, all-in price.
The predictability of a fixed rate is ideal if you have a strict budget you must stick to each month. Whether you’re a business owner hoping to avoid unpredictable monthly costs or a homeowner on a budget, fixed rates can benefit you. However, enjoying the certainty of a fixed rate may result in slightly higher annual costs.
How Do I Compare Electric Variable Rates?
UGI EnergyLink provides historical data of electric variable rates per kWh, presented by rate class, to help you compare variable rates on the market. Keep in mind that your individual rate will be calculated based on unique capacity and transmission factors, as well as your monthly electricity usage. Current customer rates may vary from the amounts you see on the historical charts.
Your current electric variable rate could be higher than what UGI EnergyLink offers. To find out, please contact us today!