How to Decide Between Floating and Fixed Electricity Rates

Choosing the right electricity plan is one of the most important decisions you can make when selecting an energy provider. In Alberta’s deregulated energy market, customers typically have two main options: floating (variable) rates or fixed rates.

Each pricing model has its advantages, and the best option depends on your lifestyle, budget, and comfort level with market changes. Understanding how these plans work can help you make an informed decision about your electricity costs.

What Is a Fixed Electricity Rate?

A fixed electricity rate locks in your price per kilowatt-hour (kWh) for a set period, often one to five years. This means your energy rate remains the same regardless of changes in the market.

Many Albertans choose fixed rates because they offer predictability and stability. Even if electricity prices rise, your rate stays locked in for the duration of your agreement.

Benefits of Fixed Rates

• Predictable monthly energy costs
• Protection from sudden market price increases
• Easier household or business budgeting
• Peace of mind during periods of market volatility

Fixed-rate plans can be especially appealing during times when electricity prices are expected to increase.

What Is a Floating Electricity Rate?

A floating rate — sometimes called a variable rate — changes based on the electricity market. Your rate may increase or decrease depending on supply, demand, and other factors affecting energy prices.

This option allows customers to take advantage of lower market prices when they occur, but it also means bills may fluctuate from month to month.

Benefits of Floating Rates

• Potential to benefit from lower market prices
• More flexibility if you prefer not to lock into a long-term rate
• Ability to switch to a fixed plan if market conditions change

For customers comfortable with price changes, floating electricity rates can sometimes provide lower average costs over time.

Factors to Consider When Choosing Your Rate

When deciding between floating and fixed electricity rates, consider the following factors.

Your Budget

If stable and predictable monthly costs are important, a fixed rate may be the better option. It protects you from unexpected spikes in electricity prices.

If you are comfortable with some fluctuations in your monthly bill, a floating rate may work well.

Market Conditions

Electricity prices in Alberta can change due to weather patterns, natural gas prices, and demand levels. If prices are currently low but expected to rise, locking in a fixed rate may offer long-term savings.

If prices appear stable or trending downward, a floating rate may allow you to benefit from market dips.

How Long You Plan to Stay

If you expect to stay in your home or business location for several years, a fixed plan can provide long-term stability.

If you anticipate moving or prefer flexibility, a floating plan may be more suitable.

Your Comfort With Risk

Some customers prefer stability and certainty, while others are comfortable with market fluctuations.

Choosing the right plan often comes down to how comfortable you are with potential changes in your electricity rate.

Can You Switch Plans Later?

In many cases, customers on a floating rate plan can switch to a fixed rate if market conditions change. This flexibility allows you to adjust your strategy as electricity prices shift.

Working with a knowledgeable energy provider can help you determine the best time to make that transition.

Why Many Albertans Choose Burst Energy

As an Alberta-owned and operated company, Burst Energy understands the province’s unique energy market. Our team helps customers compare electricity plans and select the option that best fits their needs.

We offer:

• Competitive electricity rates
• Flexible plan options
• Transparent pricing
• Alberta-based customer service

Our goal is to make energy decisions simple and straightforward.

Find the Right Electricity Plan for You

Both floating and fixed electricity rates offer advantages, and the right choice depends on your financial goals and comfort level with market changes.

If you’re unsure which option is best for your situation, the Burst Energy team is here to help. We can review your energy usage and guide you toward the plan that works best for your home, farm, or business.

Contact Burst Energy today to learn more about our electricity plans and discover how easy it is to get started.