Consumers don't have a choice when they are paying their energy bills. Their local utility must charge them a price that is regulated by the state governing body. The pricing is also revised monthly and includes a correction of forecast errors from previous quarters. Therefore they do not have an incentive to offer consumers the best prices. At the same time consumers have no choice but to acquire energy supply from their local utility.
Now with energy deregulation. New energy supplier can come in and offer consumers better plans with potential savings. The local utility still remain responsible for the safe, reliable, delivery of natural gas and electricity to consumers. Therefore consumers can enjoy the reliability and savings on their energy bills. Natural gas and electricity will be delivered to the same pipe lines and power lines. In fact customers will receive the same bill, but the only difference is the energy supplier.
By offering different fixed-rate plans, variable plans, and hybrid plans, customers will have the flexibility to choose what fits them. Basically they choose the price they want to pay. Fixed-rate plans have 1-year and 3-year terms that will lock in the best possible price for the customer. The rate is fixed for the duration of their contract. This will protect them from rising prices over time.
Variable plans can be month-to-month, 1-year, and 3-year terms. Variable plans fluctuate on the wholesale prices of the market. They are beneficial for people who don't mind the fluctuation, but would like to enjoy wholesale prices. The rate changes monthly and are not determined until the customers are enrolled.
Hybrid plans are like half and half. The terms are 1-year and 3-year. 50% of the plan is fixed-rate and the other 50% is variable rate. This gives the customers the best of both worlds. Customers can take advantage of falling prices with the variable rate portion, while at the same time protecting them against rising prices with a fixed rate portion.
