Fixed Rates: A Better Option (than Variable Rates) for Consumers

Over the last several years, many states have taken the proactive steps to deregulate, or open up, electricity supply to Competitive Electricity Suppliers like Provider Power. This deregulation has divided the utility company monopolies by separating the supply of energy from its distribution, creating the opportunity for a competitive marketplace with more options and lower prices, similar to what has happened with the telephone industry since the early 1980s.

As with telephone providers, there are many choices for Competitive Electricity Suppliers.  Some offer variable rates and some offer fixed rates, while still others offer both. It is important for consumers to be educated about these offers and closely read the terms and conditions under which they are purchased.

Provider Power closely follows the news coming out of several states where regulators and lawmakers are looking into customer concerns regarding higher than anticipated electricity rates being paid by consumers who selected electricity supply companies offering variable rate plans.  Below are just a few recent news stories:

Key Things to Watch

Artificially Low Rates

To entice new customers, some Competitive Electricity Suppliers offer rates that are lower than the cost of electricity. They accept this as a cost of acquiring new customers. Within a limited period of time, usually within six months, the suppliers switch consumers to variable rates where they will remain and turn a profit for the company. These variable rates can be as high as 18 cents per kilowatt hour (kWh), resulting in substantial bill increases.

Lack of Financial Ability

Since they do not have the financial resources to purchase power in advance, many Competitive Electricity Suppliers offering these low rates purchase their customer’s power on a daily basis, which means they are subject to sudden increases in the cost of making electricity. This can create significant financial burden for the Supplier because the cost of power is more than they are charging for it.  When this occurs, companies go into default and customers are returned to their utility for electricity. While there is no disruption of service, consumers end up paying the higher rates they left to avoid.

Do Your Research

Investigating a Competitive Electricity Supplier should go beyond price. It’s important to get a good value, but make sure you consider other things such as:  Supplier transparency about rates and terms, commitment to community and greener energy options, and ethics and business practices.

As a New England-owned company, Provider Power is proud to offer fixed, competitive rates to residents and business-owners in Maine, New Hampshire and Massachusetts.  The long term economic health of the area is in all of our best interest.  For more information about the companies of Provider Power, please visit

Posted on April 8, 2014 in Electricity Maine, ENH Power, Provider Power Mass

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