If you’ve recently looked into switching natural gas providers or just ways to save more money on your utility bill, you may have uncovered that there is more than one kind of natural gas plan available. Which natural gas plan is right for you: fixed or variable rate? What is the difference between the two anyway?
The biggest difference between these two plans is that variable rate will fluctuate each month in relation to market conditions like demand, seasonal conditions and more. In contrast, a fixed rate plan allows you to lock in a particular rate for several months.
So which plan Is a better deal for you? It’s hard to say with absolute certainty because there is no way to predict how much variable prices will fluctuate each month. Pricing history can be used to help you anticipate how much you’ll pay for natural gas, but it is merely a tool for estimation and can change on a yearly basis. Last year, a customer on the variable rate plan paid $1.02 per therm while a customer in a fixed rate agreement paid 66 cents per therm. For this year in particular, a fixed rate plan ended up being a better deal.
If you decide to sign up for a fixed rate plan, the price you pay each month will be locked in for the length of the contract, which usually ranges from six months to a year. When you sign up for a fixed rate, Walton EMC Natural Gas will purchase the gas that you will use in the future at the current rate. This is how we are able to provide you with a constant rate. This is the biggest advantage of a fixed rate plan- you already know how much you are going to pay.
Still not sure which natural gas plan is right for you? For more information about fixed or variable rate plans, contact Walton EMC Natural Gas.