Fixed vs variable: which electricity rate wins this winter?

What happened in December 2025

The week of December 18-24, 2025 saw the deepest cold snap in the eastern US since February 2021. PJM zone temperatures dropped to -8 F in Cleveland, -12 F in Pittsburgh, -15 F in Buffalo. Wholesale natural gas spot prices spiked 380 percent at New York Citygate. The wholesale electricity day-ahead settlement followed.

Variable supply customers absorbed the spike directly. The next billing cycle landed at 28 to 34 percent above the November rate in PJM, and 22 to 27 percent above in ERCOT and ISO-NE. Locked customers paid their contracted November rate through the entire spike with no change.

State-by-state winter math

Ohio: variable averaged 13.8 cents per kWh in Q1 2026 against locked at 10.9 cents. 27 percent gap.

Pennsylvania: variable averaged 14.2 cents against locked at 11.1 cents. 28 percent gap.

Texas: variable REPs averaged 15.4 cents against locked REPs at 12.6 cents. 22 percent gap.

Massachusetts: variable averaged 18.7 cents against locked at 14.9 cents. 26 percent gap.

Connecticut: variable averaged 21.4 cents against locked at 17.2 cents. 24 percent gap.

Maryland: variable averaged 12.6 cents against locked at 10.4 cents. 21 percent gap.

New Jersey: variable averaged 13.1 cents against locked at 10.9 cents. 20 percent gap.

Illinois: variable averaged 11.2 cents against locked at 9.4 cents. 19 percent gap.

Every single deregulated state showed variable above locked for the quarter.

Why wholesale futures front-load the winter spike

Wholesale electricity is priced on regional markets where the marginal generator typically sets the price. In winter across PJM, ERCOT north zone, and ISO-NE, the marginal generator is almost always natural gas — gas-fired plants run last because they are the highest-cost dispatchable resource and they fill the gap between baseload (coal, nuclear) and peak demand.

Gas-for-heat demand spikes the gas commodity price during cold snaps because residential heating outbids power generation for pipeline capacity. Power generators have to buy gas at the spiked spot price, and the wholesale electricity price moves to cover. The futures curve front-loads winter because the market knows this happens every year.

When to lock for next winter — the August through October window

Suppliers price most aggressively August through October for winter delivery years. They have most of their next-year capacity to place during this window, they have not yet priced in the winter spike risk that becomes visible in November-December forward curves, and they are competing hard for accounts before the winter ramp.

Locking in January or February is the most expensive time of year. The winter spike is already in the forward curve, suppliers have less incentive to be aggressive, and the residential rate sheets reflect the heightened risk. Wait for the August-October window if you have any flexibility.

What to do now if you are still on variable

Get a fresh lock quote. Supplier offers update weekly. Even in May (mid-shoulder season), fresh locked rates typically clear 6 to 12 percent below the average variable rate of the prior 12 months.

Lock for 18 to 24 months if you can. A 12-month lock signed in May exposes you to the next winter at re-rate time, which is the worst possible timing for re-shopping. An 18 to 24 month lock takes you past two winters before the next renewal decision.

Read the contract clauses. Avoid teaser rates that re-price after 3 months. Confirm no early-termination fee or a fee no greater than 1-2 months of supply cost. Most reputable suppliers ship clean contracts; the deceptive ones are obvious by the contract length.