Choosing the right electricity plan and provider can feel like a carnival game. Decoding the jargon and finding the best rates for your home requires a bit of homework.
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How to Find the Best Rates for Your Home
Many Texans are paying too much for electricity. Some need to be made aware they can switch providers. Others get misled by tricky websites and teaser rates. And some forget to shop and fall into a plan that costs them hundreds of dollars yearly.
The good news is that decoding electricity plans can help you find the best deal for your home. There are a variety of tools and websites that offer unbiased information about the best electricity rates in Texas. Learn how to use them to compare plans and rates for your zip code.
You can also search for prepaid electricity plans, which let you pay in advance without undergoing a credit check or deposit. And you can look for indexed energy plans, which are like variable-rate plans but vary based on the closing price of an index. Some plans even use 100% renewable energy or provide bill credits for reducing usage during peak periods.
Fixed Rate Plans
Fixed-rate plans might be the best choice if you’re looking for stability and predictability. These plans have a set rate for a certain contract duration, usually 12, 24, or 36 months. As such, you’ll avoid the bill shock you may experience with variable-rate plans when energy prices climb.
If your home’s credit is a bit spotty, you might want to consider a prepaid electricity plan, which lets you pay upfront and avoid having your account charged if you fail to make payments on time. However, most electric retailers still require some form of credit verification before enrolling new customers on a prepaid plan.
Many electricity providers advertise very low rates on the Power to Choose website. While these rates are great for people with good credit who will use a small amount of energy each month, they can be deceptive to consumers. These plans typically have a hidden catch: your usage must fall within a specific usage window to qualify for the advertised rate. This is known as a Tiered Rate or Bill Credit plan.
Variable Rate Plans
Often described as “month-to-month” plans, variable rate plans offer flexibility and per-kilowatt-hour pricing that can go up or down depending on market conditions. They also typically do not have long-term contracts and allow customers to find another plan without paying a cancelation fee.
Some plans offer bill credits for users who fall into certain usage buckets, like 1,000 kWh or more. These rewards can save you money if you consistently use enough electricity to fall into the provider’s low kWh price range and help avoid high summer bills.
Some providers also offer renewable energy sources in their plans. These include wind, solar, hydroelectricity, biomass, landfill gas, and geothermal power. Check your plan’s Electricity Facts Label (EFL) to see how much of your energy comes from clean, renewable resources. The EFL will also let you know whether the plan you’re considering is a GreenPower product.
Time-Of-Use Plans
When searching for the best Texas electricity rates, it’s important to consider all the factors impacting a plan. These include energy generation methods, weather patterns, and market dynamics influencing prices across zip codes and seasons. Understanding these factors can help you better understand why rates vary from one provider to another and use them to your advantage during the rate-finding process.
Time-of-use plans are a great option for homeowners who work night shifts, pursue a hobby requiring off-peak power, or want to reduce their environmental footprint. These plans reward customers with lower rates or even free periods for using their energy during off-peak hours. However, these plans may only be ideal for some homes and must be carefully considered to ensure the right fit.
Power to Choose
You can choose your electricity plan and provider if you live in a deregulated area of Texas (the majority of the state). Since 2002, energy deregulation has opened up the market for competition to help Texans save on their electricity rates.
A couple of cents a kilowatt-hour may not seem like much, but it can add up over time. That’s why shopping around for a better deal on your electricity rates is important.
Some of the factors to consider when choosing a plan are contract length (monthly or yearly), variable vs fixed rate, and whether or not you want a plan that offers green/renewable energy options. You should also pay attention to the pricing profile listed on each plan’s Electricity Facts Label, as these can vary from provider to provider and include “teaser” rates that spike higher later on. Enter your zip code to shop for the best rates on your next Texas energy plan! The process is quick and easy. Just enter your estimated monthly usage to compare plans and providers!
