What Is a Month-to-Month Energy Plan? (And Is It Worth It?)

Key Points of This Article:

• A month-to-month electric plan is an energy plan option that renews every month without being locked into a short-term or long-term contract. 

• While this type of plan can make it easier to switch suppliers or adjust to life changes, monthly rates may fluctuate and make energy costs less predictable. 

• Homeowners who value consistency may want to compare month-to-month plans with fixed-rate or unlimited energy options before choosing the plan that best fits their needs. 

If you're shopping for an electricity supplier, you've probably come across month-to-month energy plans and wondered whether they're actually a good deal. 

For many homeowners, the appeal is easy to understand. Life changes. You might be moving soon, comparing suppliers, unhappy with your current rate, or simply not ready to commit to a plan that lasts a year; all making a month-to-month plan seem like a good option. 

At the same time, flexibility often comes with questions about pricing, rate changes, and how much you can expect to pay from month to month. 

As an energy supplier serving the Midwest for more than 35 years, we understand energy plan options can feel confusing, and we're here to clear the air on month-to-month electric plans. This guide will explain what a month-to-month energy plan is, how it works, how it compares to other energy plans, and whether it may be the right fit for your home and budget. 

What Is a Month-to-Month Energy Plan? 

A month-to-month energy plan, often called a no-contract energy plan, renews every month instead of locking you into a long-term contract.  

In simple terms, on this plan, your energy service continues from a month-to-month basis rather than requiring you to stay on a plan for a set period, such as 12, 24, or 36 months. This gives homeowners more flexibility if their situation changes or if they want the option to switch plans in the future. 

Think of it like renting month-to-month instead of signing a long lease. You have more freedom to make changes if needed, but you may also have less certainty about future energy costs depending on how the plan is structured. 

Flexibility often comes with tradeoffs. While some homeowners value the freedom to make changes more easily, others prefer the peace of mind that comes with knowing more about what to expect from their energy costs over time. 

Month-to-month electric plans are available in many deregulated energy markets across the United States, including parts of the Midwest, although plan availability and terms vary by location and supplier.

What Are the Pros and Cons of a Month-to-Month Energy Plan? 

The biggest advantage of a month-to-month energy plan is flexibility, while the biggest drawback is that future energy costs may be less predictable. 

Like any energy plan, month-to-month plans are not automatically better or worse than other options. They simply offer a different balance between flexibility and predictability. Understanding both the benefits and potential drawbacks can help you decide whether this type of plan fits your household's needs. 

Here are some of the most notable pros and cons of month-to-month electric plans:

Month-to-month energy plans are often a good fit for homeowners who value flexibility and keeping their options open. However, homeowners who prioritize more predictability and don't want to monitor their energy costs, may want to explore other energy plan options. 

When Is a Month-to-Month Energy Plan a Good Idea? 

A month-to-month energy plan can be a good fit when flexibility matters more than committing to a longer-term agreement. 

This type of plan may make sense if: 

You're Moving Soon 

If you expect to move within the next few months, a month-to-month plan can help you avoid committing to a longer-term agreement that may no longer fit your needs after you relocate. 

You're Still Comparing Energy Options 

Some homeowners are new to energy choice and want time to explore different suppliers and plans before making a longer commitment. A month-to-month plan can provide flexibility while you learn more about the options available in your area. 

Your Living Situation May Change 

Major life changes in household size can affect your energy needs. A month-to-month plan may make sense if you expect your situation to change in the near future and you want more flexibility with your energy costs. 

You Prefer to Regularly Keep Your Options Open 

Some homeowners simply like having the freedom to reevaluate their energy plan regularly. If flexibility is more important to you than having a longer-term agreement, a month-to-month plan may align with your preferences. 

A month-to-month plan may not always be the right choice. Homeowners who prioritize predictable energy costs, prefer fewer decisions throughout the year, or want to avoid monitoring plan changes may feel more comfortable with a different type of energy plan. 

For example, some plans are designed to provide more predictable supply charges and help reduce surprises during months when energy usage is higher than usual.* This can be appealing for homeowners who would rather focus on consistency and peace of mind than maintaining maximum flexibility. 

The best energy plan is not necessarily the most flexible one. It is the one that best fits your household's needs, priorities, and comfort level with future energy costs. 

How Can a Month-to-Month Energy Plan Affect Your Electric Bill?  

A month-to-month energy plan can affect your electric bill by causing the rate you pay for energy to change from one month to the next, making energy costs less predictable. 

This means your bill could change even if your household uses the same amount of electricity. If the energy rate increases, your bill may increase. If the energy rate decreases, your bill may decrease. 

For example, imagine you're on a month-to-month electric plan and your household uses 1,000 kilowatt-hours (kWh) of electricity in both June and July. If your energy rate is 12 cents per kWh in June, the supply portion of your bill would be about $120.  

If the rate increases to 15 cents per kWh in July, the supply portion of your bill would rise to about $150, even though your household used the same amount of electricity.  

How Do Month-to-Month Energy Plans Compare to Other Energy Plans?  

Month-to-month energy plans are just one of several energy plan options available to homeowners. 

The comparison below provides a quick overview of common energy plan options, who they may be best for, and how they compare to month-to-month electricity plans: 

No single energy plan is right for every homeowner. The best choice depends on how you live, what matters most to your household, and how you use energy throughout the year.  

Understanding your priorities can make it easier to choose an energy plan that fits your lifestyle and energy needs at home. 

Is a Month-to-Month Energy Plan Worth It?  

A month-to-month energy plan may be worth it if having the flexibility to change plans is more important to you than having long-term pricing certainty. 

For homeowners who expect their situation to change, are still exploring their energy options, or simply prefer not to commit, a month-to-month plan can offer valuable flexibility. 

However, if your main goal is having more predictable energy costs and fewer surprises throughout the year, you may feel more comfortable with another type of energy plan. 

The good news is that there is no right or wrong choice. A month-to-month plan is simply one option among many. The best plan is the one that aligns with your household's priorities and how you prefer to manage your energy costs. 

What's a More Predictable Alternative to a Month-to-Month Energy Plan? 

While month-to-month plans can offer flexibility, some homeowners place a higher value on knowing more about what to expect from their energy costs throughout the year. This can be especially true during the hottest parts of summer and the coldest parts of winter, when air conditioners and heating systems often run more frequently and energy usage naturally increases. 

For homeowners who prefer fewer surprises and are looking for a more predictable option aside from a month-to-month energy plan, Santanna's Unlimited Energy plan offers a predictable supply charge regardless of how much electricity you use.*  

That means whether your household uses more energy during a summer heat wave, a winter cold snap, or a month when everyone is spending more time at home, your supply charge remains the same. 

Interested in learning more? Check if you qualify for Unlimited Energy now! 

FAQs  

Is a month-to-month energy plan the same as a variable-rate plan?  

Not always. Many month-to-month energy plans have variable rates that can change over time, but "month-to-month" refers to the length of the agreement, while "variable-rate" refers to how the energy price is determined. 

Are month-to-month plans more expensive?  

Not necessarily, but month-to-month plans often have rates that can change over time, which may make future energy costs less predictable. 

Can I cancel a month-to-month energy plan at any time?  

In many cases, yes, but cancellation terms vary by supplier, so it is important to review your plan details before enrolling. 

What happens when my month-to-month plan renews?  

A month-to-month plan typically continues into the next billing cycle automatically unless you switch plans, change suppliers, or cancel service according to the plan terms. 

Can I switch suppliers while on a month-to-month plan?  

Yes, month-to-month plans are generally designed to provide flexibility, making it easier to switch suppliers than many long-term contract plans. 

Are month-to-month plans available for both electricity and natural gas?  

Yes, depending on your location and available suppliers, month-to-month options may be offered for both electricity and natural gas service. 

A month-to-month energy plan can be a great option for homeowners who value flexibility and want to avoid being tied to a long-term agreement. Whether it's worth it ultimately comes down to your priorities. 

If you're someone who prefers fewer surprises when energy usage increases during summer heat waves or winter cold snaps, it may be worth exploring options designed with predictability in mind. 

After all, the best energy plan is not necessarily the one with the most flexibility. It's the one that helps you feel confident every time your energy bill arrives. 

* Restrictions apply. Enrollment based upon program eligibility. Customers using more than 125% of normal monthly usage as determined by Santanna may be required to switch plans.