When you buy power, you’ll usually pick between fixed or index (variable) pricing. Here’s the simple version:
Fixed Pricing
- Your rate stays the same for the whole contract.
- Easy to budget — no surprises.
- Great if you want stability.
- Downside: if market prices drop, you’re stuck paying more.
Index (Variable) Pricing
- Your rate changes with the market (monthly or even hourly).
- You can save money when prices are low.
- Downside: bills can spike without warning.
- Only makes sense if you can handle the risk.
Hybrid (Mix of Both)
- Many businesses split: fix part of their usage, leave the rest on index.
- That way you get some protection but can still benefit if prices fall.
👉 Bottom line:
- Choose fixed if you want peace of mind and steady bills.
- Choose index if you can stomach swings and want to chase savings.
- If you’re not sure, go mostly fixed and test a little on index.
Next: Understanding Your Electricity Bill – what all those charges really mean →