My energy supplier offers two tariffs:
The first is a "Price Protection tariff". It gives you a fixed per-kWh price for 12 months, and has no exit fees (23.28 cent)
The other is a "Variable price tariff". It has a higher per-kWh price (25.31 cent).
This appears to be the only difference.
I am a little thrown regarding the economics here.
- Does this mean the company is assuming the price will likely go down?
- If they believed the price will likely go up, should I not have to pay a premium for the price being fixed.
- Otherwise, what would be a reason for a customer to choose the variable price tariff?