Why You Should Shop Around for an Energy Plan This Summer

Summers have been growing hotter in recent years and with that, energy bills can spike, too. The National Weather Service predicts that the next month will bring above-average temperatures to most of the state, resulting in many people cranking up the air conditioning to stay comfortable. Due to the heavy electrical load, air conditioning typically makes up a large portion of residential energy bills. Pushing your HVAC to cool your home can lead to an unexpected spike in your power bill during the summer.

And when the summer heat hits, energy demand increases, at times making the wholesale cost of electricity volatile. During this time of year, it’s especially important that your home’s energy plan and rate per kilowatt-hour (kWh) fits your needs. If your contract is up for renewal or your energy bills are climbing, now could be a great time to shop around for energy plans , compare your options, and switch to a new plan.

You have a variable rate plan

Under a fixed-rate plan, the price you pay for energy remains the same for the duration of your contract. While this grants some stability and may lead to more predictable bills, it also means you won’t be able to benefit from cheaper rates when demand is low.

With a variable-rate plan, your rate will fluctuate based on the wholesale cost of electricity. In the summer months when energy demand is normally high, fixed-rate plans are the safer option. Variable-rate plans always come with a certain amount of risk, but they’re less of a wild card during seasons of lower demand, like in the spring or fall. If you are enrolled in a variable-rate plan this summer, it’s best to carefully monitor rates so you can switch to another plan quickly if the cost of electricity skyrockets.

Your energy usage has changed

Energy companies charge a rate for every kWh of energy you use each month. Providers set different rates for three usage tiers (500 kWh, 1,000 kWh, and 2,000 kWh), so knowing how much electricity you use in a month is important when checking your current rate.

If you picked your original plan when your usage was higher or lower, you may want to find a new plan more in line with your current usage. Check your electricity bill to get an idea of how much energy you normally use, but be sure to consider whether you’ve recently added any new appliances or devices that could increase the amount of energy you use.

Your contract is up for renewal

Fixed-rate plans normally require a contract. If you cancel service before your contract expires, your provider may charge an early termination fee (ETF). If your contract is set to expire during the summer months, it’s especially important to shop around for energy plans to avoid defaulting to a plan with a high rate.

Ideally, your contract will end in an off-peak season (like the fall or spring) when demand is lower and you can lock in a cheaper rate. However, if your contract is set to end this summer, you should take the time to compare different plan options to ensure you’re signing up for a plan with rates and terms that work for you.

Rates are lower

Summer temperatures can cause variability in energy prices, with peak demand leading to peak prices. Compare available rates to determine whether you could cut energy costs by switching to another plan. This can be especially good if your contract is up during the summer. Note: most providers advertise rates for the 1,000 kWh usage tier.

Is your current energy plan right for you?

Before you start shopping around for a new plan, evaluate your current one. Not all energy plans are created equal, and some will work better for you than others. While shopping for an energy plan may seem like a chore, it gives you the opportunity to find a plan with a rate, contract, and terms that match your needs.

The process of finding an energy plan is relatively simple, as well. If you already know which provider you’d prefer, you can sign up for a plan directly through a provider’s website. If you’d like to compare options from multiple providers, consider shopping for plans using an energy marketplace site.