Comparison Tool for Fixed and Tiered Energy Rates

What is the Rate Comparison Tool?

This Rate Tool can help you choose between tiered and fixed rate plans for your electricity usage. Certain electric suppliers may offer a choice between a fixed and tiered rate plan, this tool allows you to identify which rate plan is the most cost-effective option based on your energy usage.  The way your electricity is charged differs between the plans. In a fixed rate plan, companies charge you a fixed amount per usage unit. In a tiered rate plan, the companies increase the amount they charge after you use a certain amount of usage.  By performing two steps you can determine a usage threshold which will help you decide which rate plan is best for your energy usage.

Note: You will want to check with your electricity provider to see if these energy usage rate plan are available,

You can follow the example below to learn how to use the Rate Comparison Tool.

How to Use this Tool

You can download the "Rate Comparison Tool" from the Penn State Extension website. After you download the spreadsheet, you'll follow two easy steps to compare between these two rate plans. 

Step #1: Energy Usage and Fixed Rate Plan

In the section labeled "Step #1", you will enter your average monthly energy usage.  This can be found on your utility bill. If your energy usage differs significantly from month-to-month, you might consider running this tool with more than one monthly energy usage amount. Following this, you will then enter the fixed or simple rate offered by your utility company. The total cost under the fixed rate plan can be found in the dark blue cell. 

Step #2: Tiered Rate Plan

In the section label "Step #2", you adjust the rates for each tier and the corresponding criteria to reflect the plans provided by your utility company in the light purple cells. the total cost under the tiered rate plan can be found in the dark purple cell. 

Output: Determine Usage Threshold and Compare Rate Plans 

After you've completed Steps #1 and #2, the tool gives a usage threshold. The Fixed Rate Plan is better is you average total monthly income is more than the usage threshold, and the Tiered Rate plan is better if the average monthly usage is below the usage threshold. The more cost-effective plan, based on the information provided, will be highlighted in green, while the more expensive plan will be crossed out in red. 

Other Information

If you would like to learn more about how to read, interpret, and analyze your utility bill, visit the corresponding fact sheet on the Penn State Extension website, "Understanding and Analyzing Your Utility Bills", along with the Utility Bill Analysis Tool. 

Prepared by Adira Nair, Student in Biological Engineering, and Siobhan L. Fathel, Assistant Teaching Professor, The Pennsylvania State University, 

Funded with support from the Pennsylvania Department of Environmental Protection, Office of Energy Programs. 

This tool is provided for general informational purposes only and The Pennsylvania State University shall have no liability whatsoever.

Penn State is an equal opportunity, affirmative action employer, and is committed to employment opportunities to minorities, women, veterans, individuals with disabilities, and other protected groups.