A fixed contract is the same for electricity or gas, when all the cost elements of a contract (commodity and non-commodity) [Visit our page here for the different types of NCC] are lumped together in a unit rate, and you are shown a total price. This total price is what you pay throughout the contract, irrespective if any of the elements go up or down in the market.
WHO’S THIS FOR
This best suits a customer who wants budget certainty but understands they aren’t paying the lowest rates they can. Like a fixed mortgage you have the comfort that your prices won’t rise, but in the knowledge that you are paying extra for that certainty. The extra you pay is factored in by the energy supplier.
- Budgeting: you know what you’ll be paying, whether you go for 1 year or longer!
- Safety: if market prices go up you’re protected for the duration of your contract, and your rates won’t rise
- Extend: at any time to take advantage of longer dated prices if that suits you
- Hands off: once signed your contract will run for the duration and shouldn’t need any further involvement
- Locked in: If market prices fall your fixed rates remain for the contract duration so may end up paying higher
- Timing: prices change daily, so if the market maybe lower the day before or after you sign so you need reliable, trustworthy market analysis to hit the right day
- Length: depending on market prices there is risk in going for either a short or long term contract if the market then drops
- Above the odds: to ensure they aren’t out of pocket if either commodity or non-commodity costs go up, a supplier will typically add on 5%+ of the retail costs to cover rising market levels