Fixed vs. Variable Electricity Rates: Which Plan Should You Choose?
🇩🇪 Diesen Artikel auf Deutsch lesenA fixed-rate plan locks your price per kWh for the contract term, protecting you from spikes. Variable plans can start cheaper but change monthly and can rise sharply. Time-of-use plans reward shifting usage to off-peak hours. Always compare the total price at your actual usage, including fees, and check early termination charges.
Many US states let customers choose an electricity supplier, while the local utility still delivers the power. In other states, you choose among your utility's rate plans. Either way, understanding plan types saves money.
Plan types
| Plan | How it works | Best for |
|---|---|---|
| Fixed-rate | Same price per kWh for 6–36 months | Budget certainty |
| Variable-rate | Price changes, often monthly | Short-term flexibility; risky in volatile markets |
| Time-of-use | Cheaper off-peak, pricier on-peak | EV owners and households that can shift usage |
| Indexed | Follows a wholesale price index | Experienced buyers comfortable with risk |
How to compare offers
- Use your actual monthly kWh from past bills.
- Look at the price at your usage level — some plans have tiered pricing or bill credits that only apply at specific usage.
- Include monthly fees and delivery charges.
- Check contract length and early termination fees.
- Read what happens when the contract ends — many roll over to expensive variable rates.
See what individual devices cost at your rate:
Appliance Electricity Cost CalculatorWhat does a device cost to run?Try the calculator →Frequently asked questions
Will switching suppliers interrupt my power?
No. The local utility keeps delivering electricity and handling outages; only the supply company changes.
Is a time-of-use plan worth it?
If you can run major appliances and charge an EV during off-peak hours, it can save money. If most of your usage is on-peak, it may cost more.