Short-Term vs Long-Term Electricity Contracts

Short-Term vs. Long-Term Electricity

Do you dread opening your electricity bill each month? This is one of the reasons that some people choose to enroll in a prepaid electricity plan. Many power companies now offer customers the option of choosing short- or long-term contracts. So, how do you know which plan is the best for your electricity needs?

Short-Term Electricity Contracts

These contracts are usually less than a year. Some companies offer three-month plans, but six months is a popular choice. When choosing a short-term plan, you might end up paying less for electricity at certain times of the year when your usage could have been higher, depending on when you signed up for the service. The amount you will pay is fixed, without any surprises. This can be beneficial, particularly when temperatures are either very warm or very cold.

A shorter-term plan also allows you to switch to a more suitable plan if lower electricity rates are available. However, you have to renew your short-term contract if you are not planning to change to another contract. Then you are generally put on a month-to-month plan that could end up costing you quite a bit more.

Long-Term Electricity Contracts

These contracts typically start at a year. When you sign up for this plan determines how much you will pay for electricity. If you sign a contract when the temperatures are mild, you will pay less than if you sign up during the hot summer months. You will pay a set amount, but when you use more electricity, you will not have a higher bill.

A long-term contract offers other benefits. Some power companies offer lower monthly rates if you sign up for a long-term contract. If the amount you are required to pay is really a bargain, you might decide to opt for a longer contract. This is a beneficial choice for people who are on a fixed income.

If you are concerned about entering into a long-term contract prior to moving, check with the power company. Many do not charge penalties for early termination and will allow you to transfer your contract to your new address. In many instances, it is also possible to change your plan without paying any penalty when you move.

So, Which Plan Should You Choose?

Whether you choose a short-term or a long-term plan depends on your needs. Obviously, if there are several people in your household, your power usage will be more than if there are only a couple of people or you live alone. You, of course, under all circumstances, want to pay the lowest energy rates. Comparing the amounts that you will pay for each plan can help you to make a wise decision.

Some power companies offer month-to-month electricity plans that customers find advantageous. It is likely you know that, when moving, the deposits for utilities can be quite high. With many month-to-month plans, it is possible to choose no-deposit electricity. In addition, you will not have to provide a social security number or go through a credit check. This allows you to add money to your account as needed by using a prepaid card. To help you, the power company will let you know how much is being used and when it is time to replenish your prepaid card.

Everyone wants to save money on their bills, and they want them to be amounts they can afford each month. Different plans—short, long, or month to month—will help you keep track of how much electricity your household is using so you can adjust this amount according to your needs.

Disclaimer: © April 2021 PayGO Distributors, LLC. This is an advertisement for prepaid electric service from PayGO Distributors, LLC., an independent energy sales organization. Energy services are provided by Young Energy, LLC DBA Payless Power REP#10110 and Brooklet Energy Distribution, LLC DBAs Acacia Energy, Snap Energy Latino, and Now Power REP#10137. There is a minimum required payment to establish a connection. Call for more information on minimum required payments, balances, and specific terms of service and promotional details. Utility fees may also apply and may increase the total amount that you pay. Offers subject to termination or change without notice. Se habla Español.

* Rates quoted are at 2,000 kWh per the Electricity Facts Label for Oncor. Please check EFL for your effective rate.

** Order must be placed online before 4pm CST. Meter must not be subject to a switch hold.

(866) 491-2623 | (844) 611-0388