Muvar Inc.

Understanding Fixed-Rate vs. Variable-Rate Energy Plans


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As energy consumers in Canada, we face an increasingly complex landscape when it comes to selecting the right energy plan for our households. One of the crucial factors influencing this decision is the choice between fixed-rate and variable-rate energy plans. Both options come with their unique benefits and drawbacks, and understanding these distinctions can significantly impact your energy costs and overall satisfaction with your energy provider.

In this informative guide, we aim to provide you with a comprehensive understanding of fixed-rate and variable-rate energy plans, the factors that influence both types of plans, and the potential impact of these plans on your household budget and energy management. We will also explore the benefits of leveraging resources like Muvar’s Cost Calculator to assess your current energy consumption and accurately predict potential savings under each plan type.

Join us on a journey as we delve into the world of fixed-rate and variable-rate energy plans and provide guidance on making informed decisions that align with your household’s unique needs, preferences, and budget constraints. We seek to empower you with the knowledge and tools necessary to navigate the complex energy market and make choices that will lead to a cost-effective and well-managed household.

Unraveling Fixed-Rate Energy Plans

Fixed-rate energy plans are characterized by a set energy price per kilowatt-hour (kWh) or gigajoule (GJ) that remains constant throughout the contract term (between 1 yr to 5 Yrs). Regardless of market fluctuations in energy costs, you’ll pay the same pre-determined rate for the entire duration of your agreement. This type of plan offers stability, allowing you to predict your energy costs accurately and avoid surprises on your monthly utility bills.

Advantages of Fixed-Rate Energy Plans:

  1. Budget Stability: Since fixed-rate plans lock in a consistent price, they enable you to anticipate your energy costs, making budgeting straightforward. One more thing to note about Fixed rate is the absence of transaction fees which many energy retailers charge on top of energy prices charged on variable rate plans. Many energy customers are not always aware of this as it often comes as a separate line item. 
  2. Protection from Market Volatility: With a fixed price per kWh or GJ, you’ll avoid the impacts of price fluctuations in energy markets, creating a sense of security in an ever-changing energy landscape.

Drawbacks of Fixed-Rate Energy Plans:

  1. Limited Flexibility: Fixed-rate plans often involve longer contract terms, which can be limiting if you wish to switch providers or respond to significant shifts in the energy market.
  2. Potential for Higher Costs: In case energy prices decline over time, you could end up paying more than you would under a variable-rate plan.

Demystifying Variable-Rate Energy Plans

Variable-rate energy plans, sometimes referred to as index or floating rate plans, have energy prices that fluctuate based on market conditions. Depending on factors such as supply and demand, your energy cost per kWh or GJ can change from month to month.

Advantages of Variable-Rate Energy Plans:

  1. Potential for Cost Savings: When market prices for energy decrease, you can benefit from lower prices per kWh or GJ, potentially saving money on your energy bills.

Drawbacks of Variable-Rate Energy Plans:

  1. Unpredictable Costs: Since energy prices can vary each month, budgeting accurately can be challenging, potentially leading to unexpected costs on your utility bills.
  2. Vulnerability to Market Volatility: With energy costs fluctuating based on market conditions, spikes in prices can lead to increased costs for consumers.
  3. Additional Transaction Fees to Charged Rates: Additional rates are often added to the charged rates (which is often absent in Fixed Rates). This fees could be up to 5 cents/ kWh for electricity and $1/ GJ for Natural Gas)

Leveraging Muvar’s Cost Calculator to Make Data-Driven Decisions

In the process of selecting the energy plan that aligns best with your household’s needs and budget, Muvar’s Cost Calculator ( can be a valuable resource at your disposal. By inputting your energy usage data, the calculator can provide insights into the potential costs and savings associated with fixed-rate and variable-rate plans.

By utilizing the Cost Calculator, you can make more informed decisions based on the projected impact of each plan type on your household budget. This data-driven approach can better position you to choose the energy plan that aligns most closely with your property type, preferences and financial goals.

Factors to Consider When Choosing Your Energy Plan

As you navigate the process of choosing between fixed-rate and variable-rate energy plans, several factors can impact your decision:

  1. Risk Tolerance: If you prefer predictability and security in your energy costs, a fixed-rate plan can offer a sense of financial stability. However, if you are comfortable embracing market fluctuations in pursuit of potential cost savings, a variable-rate plan may be a better fit.
  2. Household Budget: Assess your household budget and determine whether you are prepared to handle fluctuations in your monthly utility bills or if a more stable and predictable rate is better suited to your financial needs.
  3. Personal Preferences: Ultimately, the choice between fixed-rate and variable-rate plans is a matter of personal preference. Consider your own comfort with financial risk and your priorities when it comes to energy cost management.


The decision between fixed-rate and variable-rate energy plans is an important one that can significantly impact your household’s energy management and budget. By understanding the advantages and drawbacks of each plan type, using resources like Muvar’s Cost Calculator to assess your unique energy consumption patterns, and considering your personal preferences and risk tolerance, you can make an informed decision that best suits your needs.

As you navigate the complex energy market and make choices that impact your home, always remember that the key to effective energy management lies in understanding your options, leveraging the right tools, and focusing on what matters most to you and your household.

At Muvar, we can help you compare energy rates in Alberta and find the plan that’s right for you. Our online comparison tool allows you to compare plans side-by-side, taking into account factors like contract length, retailer incentives and billing types (Paper or Online). Let us help you make an informed decision that helps you manage your energy costs and meet your household’s needs.As additional guide, the charts below shows the historic trends of energy rates in Alberta!