In Georgia's deregulated natural gas market, natural gas service providers need to offer competitive prices to attract consumers. They also need to stay in business by being able to increase natural gas prices when the market changes.
Variable-rate plans allow providers to change their per-therm rates for customers each month, depending on the wholesale market price for natural gas. At one point in each month, providers set the per-therm price based on variables in the marketplace and their own operational costs. Often variable-rate plans are consistent across all natural gas service providers due to the competition, which benefits the consumer. The consumer is then charged for the monthly natural gas service based on that rate.
An increased demand for natural gas can increase the price for natural gas. During the hottest and coldest times of the year, you'll often see a jump in natural gas prices.
Flexibility is the key to a variable-rate pricing plan. Consumers aren't locked into a fixed-rate plan, which usually involves signing a six-, 12- or 18-month contract. While fixed-rate plans ensure consumers the same per-therm rate over the course of the contract, it also penalizes them if they need to cancel the contract because of a move or if they want to switch providers. They will be charged an early termination fee.
Consumers who decide to go with a variable-rate plan may risk the chance of rate increases, but they may be offered lower natural gas prices than those enrolled in fixed-rate plans. They also have the ability to switch providers if they find a company that offers lower rates or better plans, something that can't be done on a fixed-rate plan.
Some natural gas providers offer a fixed flex rate pricing option, which falls somewhere in the middle of both plans. A fixed flex plan often allows you to adjust your per-therm rate once during the course of your contract. If per-therm rates decrease, you're able to take advantage of the savings by choosing the best available rate.
Senior citizens may quality for a senior discount on their variable-rate natural gas plans. There is usually an application process for qualifying seniors.
For families on a tight budget, a variable-rate plan may be challenging because rates could quickly increase. But for those who may be thinking of relocating or changing natural gas service providers, the ability to cancel or switch providers would be a better alternative than incurring an early termination charge on a fixed-rate contract. In addition, the total amount spent over a full year may be less with a variable-rate plan.
GasGeorgia.com is a free online service where you can compare natural gas companies and order service for your home. You can view natural gas plans and prices from the top providers in the State of Georgia, as well as switch or transfer your natural gas service without interruption.
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