As reported by

imagesThe cold winter of 2013-2014 has resulted in a jump in wholesale energy prices across the country. Rising oil, coal, and natural gas prices have caused higher electricity prices for suppliers, and those suppliers have passed the expense on to their customers where possible.

Many electricity customers in energy choice markets have enrolled in variable rate plans over the last few years. Electricity companies offering variable rates often entice new customers into their service by offering a low teaser rate that shows impressive savings against the utility default rate for the first month. However, with time the variable electric rate inches up month after month, or rapidly if the energy markets see a big spike forcing electricity companies to pass the higher prices onto their customers.

In January and February many electricity customers of North American Power, Energy Plus, and Systrum Energy are seeing their bills double, and in some cases triple, do to skyrocketing variable electric rates. These electricity companies, and others, have attracted customers in over the last several years offering “no contracts” and rewards programs. However, as many consumers are finding out, not having a contract in place can be a costly mistake. Despite rising energy prices, consumers who have elected to enter into fixed electric rate contracts are not being hurt as their rates are locked for a specific term.

Electricity customers who are on variable rate plans should start shopping for fixed electric rates as soon as possible. If you are on a variable rate and haven’t gotten your bill yet it would be a good idea to call your supplier and get an estimate of how much the electric bill will be. Once you receive the electric bill, switching suppliers at that point will guarantee that you receive at least one more bill from your current supplier.

Our viewpoint:

HBS deals primarily in the commercial deregulated energy market. We alway encourage our clients to sign a fixed cost electric contract. There have been many companies that popped up over the past few years trying to take advantage of the competitive deregulated prices offerring low teaser rates to get you onboard. Beware of the variable rate contracts. The savings never add up and many times you find there is little or no savings.

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