RSSGet the Facts on Business Electricity
Mar 12
Texas business, Business Finance, Electricity, power, Texas, texas electric No Comments
When paying electricity rates to run a business, it is simple to be burned by pricey utilities. Actually, the price of electricity has been noted as one of the leading problems that small business owners face, according to a survey recently conducted by the National Federation of Independent Business. This makes it vital to know what to search for when you are looking for a company to supply you with electrical power for your Texas business.
Here are some facts to think about when picking where to buy Texas business electricity. Fixed vs. Variable Rates – If you agree to a fixed rate, the per-unit price of electricity will not change for the entire contract term. There are a few exceptions to this rule however a fixed rate will keep your energy bills at a constant rate, as long as the amount of energy your business uses remains relatively the same each month. On the other hand, a variable rate means that cost per unit of electricity changes based on market conditions. At times a variable rate will give you lower costs, and other times it will be more expensive than a fixed rate.
So, what is the plan that would be most beneficial for you? In most cases, a fixed rate is the best choice if your business will be signing up for a long-term plan. This is because eventually prices will rise as per inflation, but your cost per unit of electricity will remain the same for the duration of the contract.
So, how can you decide whether a fixed or variable electricity rate is right for you? Generally, a fixed rate is the best option if your business will be entering a long term contract. This is because over time, energy prices will rise according to the cost of inflation. However, your per unit electricity cost will not increase for the life of the contract. In practical terms, this means that you will be paying less than market rate for your electricity as the contract progresses. On the other hand, if market rates drop, you may be locked into a long term contract and unable to renegotiate at a lower fixed rate.
If you are thinking about a short-term contract, then you may want to choose a variable rate. The pricing will fluctuate from month to month, but you are likely to get cheaper rates in the short term than you would with a fixed rate contract. As well, this gives you the capability to enter into a long-term contract in case electricity prices fall enough that it would be worthwhile for you to go for a fixed rate.
Contract Terms – Several suppliers of Texas business electricity offer various terms. They can go as short as a month-to-month plan and in some instances up to three years or more. It is vital to select the plan that is most suitable for you, and to carefully examine all the clauses of any contract. Specifically, you should know that you might have to pay a cancellation fee if you end the contract before the entire term is done.
Environmental Responsibility – Finally, many Texas businesses decide to buy energy that has been produced from renewable resources such as solar energy, wind energy, geothermal energy as well as others. If you are worried about whether the electricity you buy is eco friendly, ask your electric supplier or look at the supplier’s Electricity Facts Label.
By taking each of these factors into account, you’ll be in a better position to decide what type of Texas business electricity suits your needs. This will help you save money, understand the terms of your contract, and use resources responsibly.
About the author: Jerry Dyess specializes in the Texas Electricity business and has published articles on Texas Electric rates.
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