Fixed vs Variable Electricity Rates: What Canadians Should Know

If your province allows you to choose a competitive electricity retailer, you may see plans described as fixed or variable. The best choice depends less on “what’s cheapest today” and more on your comfort with change and uncertainty.

What “Fixed” Usually Means

A fixed rate typically means the energy price per kWh is locked for a set term. That can help with budgeting. However, your bill can still change because:

• You used more or less electricity this month.
• Delivery and regulated charges can change over time.
• Taxes and fees may apply differently depending on the situation.

What “Variable” Usually Means

A variable rate means the energy price can move up or down based on market conditions or plan rules. This can be good when prices drop — and stressful when prices spike.

Which One Is Better?

• Fixed is often best for people who value predictable bills and dislike surprises.
• Variable can make sense if you understand the risks and can handle volatility.
• If you’re unsure, start by comparing the total bill, not just the energy rate.

Questions to Ask Before You Choose

• Is there a contract term? Any early exit fees?
• Is the rate truly fixed, or fixed only for part of the bill?
• How is the variable rate calculated, and how often can it change?
• Is there a price cap? (Many plans do not have one.)

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