6 Ways to Find the Right Electricity Plan

If you are unsure how to choose the electricity plan that works best for you and your budget you are not alone. For homeowners and renters, lessening monthly expenses is the main priority. However, many don’t know that they have choices to choose from when it comes to utilities. In the state of Michigan, electricity and natural gas are deregulated meaning instead of one company monopolizing the regional business, citizens can benefit from a competitive energy market. When making the decision to pick your electricity plan, here are some factors to consider.

1. Your Needs

When purchasing an electricity service for your household, it's important to have a fairly clear understanding of your needs. This could include many aspects like the size of your home or how your heating and cooling cost could affect your electricity usage during the warmer and colder seasons. The most efficient way to determine these numbers would be to check your old electricity bills, this will help to give insight into your potential costs when switching to another provider. Knowing your needs can be beneficial considering that your electricity is based on how much power you consume. You must also take into account that not every plan is the same in regard to how different levels of electricity use are calculated.

2. The Duration Of Your Service

Electricity service is provided in a few contract lengths. Month-to-month electricity is an option but better rates are usually offered when signing up for longer-term length plans such as 6, 12, and 18-month terms which are common. Some contracts can even go for 24 months or even longer. Ultimately, what is important is what you need. For those in a home that they will be in for the foreseeable future, you have the option of benefiting from the lower rate offered with a longer-term length plan. On the other hand, if you only need an electricity plan for 6 months, it would be disadvantageous to sign on for longer than needed and be responsible for early termination fees.

3. Renewable energy

A deregulated energy market allows for innovation in technology and consumer choice. Retail electricity providers can now provide clean green renewable energy. If lessening your carbon footprint by using renewable energy is important to you, you should look into options for renewable plans.

4. Fixed vs. Variable Rates

Two terms used to describe energy rates are fixed rate and variable rate. Fixed rates don’t change depending on weather conditions, time of day, day of the week, or month of the year. The price per kilowatt-hour also stays the same. Variable rate contracts differ because the rates do change. This can be free electricity during nights and weekends with a higher daytime rate. This could also mean that rates may change with the market price of electricity.

5. Electricity Facts Label (EFL)

In some situations, consumers receive an electricity bill higher than what they expected. Most times this transpires because the electricity facts label is not read. The Electricity Facts Label is legal documentation that each electricity plan is required to have. This paperwork describes in explicit language the plan specifics including the term of the contract if the electricity produced is from renewable resources and the billing details. Billing details are especially important because it goes over how much the consumer will be charged for electricity and other fees as well as describe how these charges are calculated. The EFL should be examined before signing up for any electricity plan.

6. Switching To a New Provider

People sometimes avoid switching to a new electricity plan because they believe the time lapse between providers will leave them without electricity. This is untrue. Moving to a new provider will not stop your service nor are you required to report to your previous provider the change in electricity plans. Once you sign on with a new provider they will take over responsibility. Depending on your contract some early termination fees may apply.