The main difference between fixed vs. variable electricity rates is that, with a fixed rate, your electricity price is locked in for a set period of time, while with a variable rate, your electricity price can change monthly. Fixed rates offer protection against rising electricity prices, but you may end up paying more if prices go down. Variable rates offer more flexibility, but you will end up paying more if prices go up. Also, many suppliers use variable rate plans to pad their bottom line for investors. Variable rates will seldom save you money for this reason.