A fixed-rate electricity plan locks in a set price per kilowatt-hour for the duration of your contract. This provides budget stability and protects your business from market price spikes, since your rate remains the same even if wholesale electricity costs go up. Fixed-rate contracts are commonly offered for six months, one year or multiple years and are a good choice if you prefer predictable monthly costs.

Variable-rate plans, sometimes called market or index plans, change from month to month based on wholesale market prices or other indexes. These plans can offer savings when market prices drop, but they expose you to volatility: your rate may increase significantly during periods of high demand or supply constraints. Variable plans often allow more flexibility and may not include early termination fees, but they require a higher tolerance for risk.

When deciding between fixed and variable rates, consider your business’s risk tolerance, cash flow and expectations for future energy prices. Many commercial customers in deregulated markets choose fixed rates to secure long-term savings and avoid surprises, while others use variable plans to capitalize on short-term market dips【994357743146875†L125-L143】.

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