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How to Shop for an Electricity or Natural Gas Plan
Shopping for energy is a lot easier than you might think. Once you get a few basics down in order to make an educated decision about which gas or electricity plan to choose, the rest is an easy sign-up process. Being able to choose your energy plan not only provides the ability to compare energy companies for their competitive rates, but also allows you to have a fixed-rate plan, customer perks, and exceptional customer service.
There are a few important things that, as an energy consumer, you’ll need to know before you shop for an energy plan. Here are a few elements to consider before making a decision about which energy plan to choose.
1. Determine what kind of energy you need
What energy does your home or business use? Do you have only electric heaters, boilers and stovetops? Or do some of your major appliances use natural gas? Perhaps you have a mix of both. Knowing what kind of energy you need is the first step in picking the right energy plan.
Natural Gas Plans
Are there renewable energy options?
Constellation offers residential renewable energy plans in 11 states and territories across the United States.
2. Check your current contract and plan
Find past energy bills or go online to view your current utility or energy supplier contract. See what you’re currently paying per energy unit. This number is expressed as kWh for electricity and therm for natural gas usage.
When you know what you’re paying for energy currently, you can weigh that against alternatives when you shop for energy from other providers.
3. Consider your energy patterns
While you’re looking at your energy bill, pay attention to the times you’re consuming the most energy. Chances are, your energy usage fluctuates by season, the weekend vs. weekday, and perhaps day vs. night.
Your energy bill may also show you how your rates vary from month to month. This information can help you choose which kind of contract will work best for your home or business. With a variable-rate plan, you might not know what you’re paying for your energy units until the bill comes. With a fixed-rate plan, you know exactly the rate you’ll pay for each unit of energy you use.
Additionally, by adapting your energy consumption habits and practicing energy conservation, you will be able to bring down your monthly electricity or natural gas bill and contribute to a cleaner planet.
4. Discover whether you live in a deregulated state
Energy markets have been deregulated in many states, which allows for energy choice. This means you can choose to buy energy from one of several suppliers and you can choose what energy plan will work best for you.
Most states that have deregulated power markets for residents have also done the same for small businesses. New laws give these companies options for trimming their energy expenses. The following resource provides additional information about deregulation for small businesses.
What to Consider Before Choosing an Electricity or Natural Gas Plan for Your Small Business
Energy suppliers offer a range of small business energy options. Here are the key considerations to keep in mind when shopping for an electricity or natural gas plan for your small business. The same factors noted above for residential plans also apply to small businesses. You will have a few other things to consider, such as managing overhead costs and operating within a budget. The small business electricity options that most suppliers offer will help you address those issues.
When you are ready to start shopping for energy, here are some tips and considerations for choosing the right plan:
1. Find an energy supplier in your area
Constellation offers energy plans to 16 states across the United States as well as Washington, D.C.
2. Choose the right energy rate plan based on your needs
In deregulated markets, you are no longer limited to what the utility company offers you. You will find a variety of options, some of which can save you money. The most common energy plans for energy customers are fixed-rate and variable-rate plans.
Fixed-Rate Energy Plans
Variable Rate Energy Plans
Fixed-rate energy plans lock in a price for energy that applies through the length of your contract term. No matter how much your usage spikes or what happens in the energy market, you have a predictable rate upon which you can build your budgets, set your pricing, and manage your profits. You don’t have to worry about any surprise rate increases.
Variable-rate plans are usually offered by utility companies, and sometimes energy suppliers. For example, Constellation currently only offers variable-rate plans to residential customers in Texas. Under variable-rate plans, energy rates fluctuate with the weather, demand spikes, and changes in the energy market. Learn more about how the energy markets affect pricing.
3. Compare Prices
Identify the energy companies that serve your area and then explore the plans, programs and rates they offer. To view Constellation’s energy rates, enter your zip code, and promo code if you have one, and see which fixed-rate energy plans work for you:
Provide your zip code and/or promo code to compare rates in your area
4. Research additional energy plan costs
Your work shopping for a gas or electricity plan isn’t quite finished. Your energy bill is likely to include several other energy costs. Some of these you can control; others you can’t. Additional energy costs do vary from state to state, yet here are some of the more common add-on energy costs:
- Delivery. This charge is for moving energy through power lines, gas pipelines and meters.
- Transmission. Covers the cost of the bulk transfer of energy from power plants to electrical substations.
- Capacity. A fee electricity companies include to ensure enough electricity is always available on the grid at peak times.
- Ancillary services. Differs from each supplier, but includes cost of services like regulation, black start, voltage control, and more.
When learning how to choose the right energy plan for you, check each energy supplier’s additional costs so you’re able to fully understand the amount when it comes to what you will pay for electricity.
5. Determine the contract length of your fixed-rate plan
While year-long contracts are common, you may have reasons to opt for one that runs only a few months. You can also choose plans with longer duration. You typically are balancing flexibility against a predictable energy rate.
How long is a contract with an energy supplier?
In shopping for short-term vs. long-term energy contracts, you are likely to find different contract length options, such as:
- 6-month energy plans
- 12-month energy plans
- 24-month energy plans
- 36-month energy plans
- 48-month energy plans
- 60-month energy plans
6. Know when you can switch
Your contract term matters because you may not be able to switch to a better energy provider until your contract ends. While you can get out early, you will have to pay a penalty, eliminating some of the savings you might achieve.
Can I switch electricity or natural gas plans before my current contract expires?
If you’re currently using a utility for your energy service, you can switch at any time with no hassle. However, if you’re currently with another energy supplier and haven’t reached the end of your contract, you may be subject to an early termination fee. Check your current contract end date to know when you will be able to switch.