fixed rates

[drwxr]

today a person came by and asked me if i wanted to sign a 5 year fixed rate contract for the hydro and gas, i didnt sign yet, so he left me some brochures to look over. they didnt really explain much, dont think they show reality anyways.

what do you guys think, is it better than non fixed or not ?

[mason05]

I'd stick with paying your service provider directly. I've had these people stop by too and they don't seem to really know what they are selling you but want you to sign on the spot. They claimed to provide a better rate on hydro and gas. Upon investigation of my current rates they were higher than my hydro provider. Odd considering the sales pitch I heard. You'd likely have to sign a contract with them that could be hard to cancel down the road. Just remember no corporation is looking to save you money, they're just looking to line their pockets. Just my thoughts...

 

Corn Nug

[John Bacon]

You would need to be able to predict the future to be certain whether it will save you money.

 

Most of the agents have been trying to sign me up at fixed rates around $0.40 while the floating rate has been around the $0.30 rate for quite some time. I definitely won by not signing up for a fixed rate for the last few years. That doesn't mean that the floating rate will be the better option for the next five years. However, if I was a betting man, I would put my money on the floating rate saving you money.

 

As Corn Nug pointed out; these companies don't plan on saving you money. They expect the floating rate to be lower than the fixed rate so that they can make a profit. If the floating rate rises above the fixed rate, then they lose.

 

Also, be sure to read the fine print. When hydro rates were deregulated a few years ago many customers on fixed rates saw there costs rise along with the people on variable rates ... it turned out that the fixed rate didn't apply to electricity that had to be imported from the US. Who knows how many other loopholes are out there for them to exploit.