With electricity deregulation hitting virtually every area of the United States, more and more consumers and businesses are faced with making decisions as to which electric company to choose. In large part, this choice has to do with what terms the company is proposing. Clearly, electricity contracts can be challenging to understand. With so many new companies entering the market and unclear terms and conditions, residential consumers and businesses alike need to carefully understand what type of service they need and how to get the best rates.
When you are considering an electricity contract, it is important to spend time doing your research. Many times, electric companies have complicated terms and conditions, so it is critical that you do your homework before signing on the dotted line. Doing an adequate amount of research will give you the best opportunities to save money on your electric bill each month.
The first question to ask when researching an electrical contract is whether or not the price quoted includes everything – the cost of the electricity, fuel charges, as well as pertinent customer charges and even transmission. Frequently, the cost you are quoted is only the per kilowatt hour charge, and does not include other fees that will show up on your bill. These additional charges can be considerable. Knowing what they are upfront will give you a more complete picture of what to expect from each electric company.
Another thing to consider with electrical contracts is whether or not the cost you have been quoted is a fixed price or a variable price contract. If it is a fixed price contract, then finding out how long the price will stay in the same place is a critical consideration. If it is a variable contract, then asking about how often the price will vary and whether or not there are any caps on how much it can change during a particular time period are important to know as well. Having this information ahead of time will assist you in knowing how changing electric companies will effect your utility budget at the end of the month.
Once you have done the research in terms of the cost of each type of electric service, then there are considerations about the terms of the contract. Check carefully with the electrical company to see the length of the contract and if there are any early termination fees that are associated with it. In addition, don't forget to ask what happens if you or your business needs to move, especially if this is a short-term consideration. Finally, don't forget to ask what will happen when the contract expires. Particularly note whether or not the contract automatically renews and whether you have the option to change companies so that you can note at what point to begin your research again.
Once you have made your decision about which company to use, then it is time to enroll. Simply follow the guidelines for that company and don't forget to continue to ask questions along the way – especially if the company insists on deposits or other terms that were not spelled out during your research. With a little advance planning and some good questions, you can easily figure out which electrical contract is best for you.
