The Most Popular Electric Plans in the US

When it comes to their electric bill, people love saving. And with United States electricity cost averaging about $1,300 per year via an average US electric rate of 11.88 cents per kWh in 2012, there is plenty of room to reduce the price. One way that many electricity customers are cutting costs and keeping more of their money out of the pockets of US electric suppliers is by choosing the best electric plans to suit their needs.

Let’s take a look at how energy plan choices are trending across the United States and how they vary.

Fixed rates versus variable rates

For energy customers in the US who have the option to choose energy suppliers, they get two general types of rate plan options: fixed rate plans and variable rate plans.

For a while, many customers would go with variable rate plans, because they almost universally start out at astoundingly low rates and they promise to stay low—or even fall lower—if the energy market dictates it. Unfortunately, for many variable rate customers have discovered that this may have not been such a good idea.

Volatility in the energy industries across the country due to a number of factors has caused the market price of energy in most states to skyrocket intermittently. As a result, fixed rate customers are being forced to pay more—a lot more. In Pennsylvania, for example, PA electric suppliers ended up sending many variable rate customers bills in excess of five times the normal expected amount this spring. The primary cause was a sharp rise in energy costs wrought by the winter.

To protect themselves from the volatility of the energy market, many customers are choosing fixed rate plans instead. This shift is also being spurred by states that are making efforts to make consumers more aware of what the risks and benefits of both fixed and variable rate plans are. The government in PA, for example, responded to complaints by offering educational materials that make the differences between fixed and variable rates as clear as possible.

Plan durations

Unlike with cell phones, it is sometimes good to lock yourself into an electric service contract. This is due to the fact that a long-term fixed rate electric contract can protect you from the energy market, in which prices will rise eventually no matter what. The duration of your energy rate plan can drastically affect how much you are paying this year, next year, and even over the next three years; energy customers across the country are starting to realize that.

Electric suppliers in NY and TX, for example, are seeing at least three fourths of their energy customers choose contracts between one and three years. In Maryland—a particularly volatile energy state—the trend towards long-term contracts is even more extreme, as electric suppliers in MD are seeing over a third of their energy customers choose three year long energy contracts.

Renewable energy versus fossil fuels

IT is a well known fact that energy prices are rising. What you may not know, however, is that renewable energy rates are actually plummeting. In many states, renewable energy costs have already fallen below those of fossil fuels.

Renewable electric rates in NJ, for example, mirror those of non-renewable rates. Ohio is one of the few states that has managed to get their renewable energy rates to be well below those of non-renewable rates. What’s more, renewable electric rates in NJ, OH and just about every other state are still going down.

How energy plan choice is expected to change in the future

As renewable energy resources continue to become more advanced and become less expensive, you can expect more customers across the United States to choose 100% green energy plans.

In addition, many people and businesses across the country will start to forego electricity plans entirely, as home and business self-contained solar panel systems continue to grow in popularity. With a cost reduction of 10% per year over the past half decade for solar, modest estimates expect the use of home solar panels to double in the next 25 years; more aggressive analysts expect much more.

To learn more about trends in our nation’s energy industry or to find out how to switch to the best available energy supplier available to you, visit, where you can compare all of the energy suppliers that serve your area.