Q&A: Why are longer electricity terms more expensive than short ones?

Question by Stephen: Why are longer electricity terms more expensive than short ones?
A monthly plan costs 11.9kwh variable.
A 12 month plan costs 12.4kwh fixed.
A 24 month plan costs 13.5kwh fixed.

Why is the longer plan more expensive? Shouldn’t it be the other way around? It is like this on all of the plans I’ve been looking at. I’m in DFW TX in the Oncor service area if that helps.

Best answer:

Answer by towanda
go to www.powertochose.org. . .then search until you find the spot that lists all the companies and all the rates with all the particulars. Variable rates usually start low and then go up and go up a lot. This site will guide you if you need help so that you ask the question you should when you apply for electicity. I’m in south Texas and pay 11.3 fixed rate and there is a monthly fee unless I use over a certain amount which I don’t. When I figured out all the other companies with fixed rates, the one for Champion Energy was the lowest. This site favors some companies with easy access but, like I said, search until you get the long list. Then I went to individual sites to make sure the offer was valid. When I had Reliant Energy, which has just been bought out or is about to be, they offered me one rate and then when I called in they refused to give me the offer they mailed me, so watch all of them like a hawk. So to answer your question, the variable rate will go up and be much higher. For the second two the company is betting that the cost of electricity will go up and if you want to sock in a two year term, they want more $ . Some even offer 6 month contracts. Too much hassle for electricity. . .There are also other variable to consider when purchasing electricity and the site will fill you in.

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