How to Pick an Electricity Plan

Aug 8, 2022 | Company Updates, Plans, Rates, and Programs

Texas is one of several states with a deregulated energy market that allows residents to purchase power from their choice of electricity companies. This competitive marketplace gives consumers more control over contracts, rates, and providers.

But it can also be tricky to navigate. There are many retail electricity providers and just as many plans to choose from. Finding the right plan for you can seem like an overwhelming task. Here we break down what you need to know to shop like a pro.

What Are Your Electricity Service Needs?

Start by determining your electricity needs. The amount of time you spend at home, how cold or hot you like to run your air conditioner, and how often you use major appliances should all be factored into your calculations.

How Much Electricity Do You Use?

How much electricity does your household use every month? Take a close look at your statements over the past year to get an idea of how much you’re using each month. Pay special attention to peak summer and winter months, when heating and cooling costs are higher.

Long-term Versus Short-term Electricity Contracts

Determining the right contract length is a critical part of the decision-making process. If you know you’ll be living in the same home for the foreseeable future, it might be a good idea to sign up for a one- to three-year contract. Conversely, if you’re renting or unsure about your future living arrangements, then you’re better off with a shorter contract duration.

In addition to your own residential plans, it’s important to consider what’s happening in the wider energy market. If, for example, electricity rates are unusually high at the time of purchase, you could consider signing up for a month-to-month contract, then committing to a longer term when the rates drop – regardless of how long you plan to stay in your current residence. If rates are unusually low, then you can confidently lock in those rates and enjoy protection from future market volatility.

What Kind of Electricity Do You Prefer?

One of the best things about the deregulated energy market is that it’s led to a lot of technological innovation, specifically renewable energy. So if you want to power your home with 100% wind and solar, you can! 

Here at Energy Texas, for example, all of our plans are sourced entirely from Texas-produced wind and solar energy. This means that for every kilowatt-hour (kWh) you use, we purchase a renewable energy credit (REC). These RECs are issued with a unique identifier that allows the government to track and verify the amount of clean energy being produced.

Choose the Right Electricity Plan for You

Once you know your needs, it’s time to start looking at plans and providers. Retail electricity providers are highly visible, advertising on TV, radio, and everywhere else. But if you want to look past the marketing-speak and compare everything in black and white, the state Public Utility Commission’s Power to Choose website is a resource where providers can list their energy plans for consumers to view objectively.

One of the first things you’ll see is a lot of talk about fixed and variable rates. While there are hundreds of electricity plans to choose from in Texas, they all fall into these two categories.

Variable-Rate Electricity Plans

In a variable-rate contract, the per-kWh price you pay will change. There are different factors that cause rates to change in any given contract, including the market rate, day of the week, or hour of the day. An example of a variable-rate electricity plan is the so-called free nights and weekends plan, wherein your weekday daytime-hour rate might be higher than the average rate, but night and weekend hours are “free.”

Variable-rate plans can seem like an opportunity to save money; for a small group of people, they are. But unless your lifestyle aligns with the free hours, variable-rate plans often result in surprisingly high bills. For example, do you want to limit all your electricity-intensive activities to after 10 p.m.? If that’s when the free nighttime hours kick in, that’s what you’d need to do to come out ahead.

Fixed-Rate Electricity Plans

If you want to save the rollercoaster ride for the amusement park, a fixed-rate plan is likely a better choice. With a fixed-rate energy plan, the rate doesn’t change. You pay the same per kWh regardless of the day of the week or hour of the day. You can count on these plans to be stable and consistent. Protection from price fluctuations is what makes fixed-rate plans a go-to recommendation.

A Few Other Dos & Don’ts

Don’t let your contract expire without kicking off a new plan. Your retail electricity provider will switch you to a month-to-month plan, which can be significantly more expensive.

Don’t let your contract expire in the summer when selecting a contract length. The best time to sign up for a fixed-rate plan to ensure lower rates is late winter or early spring (after winter peak and just before summer peak). 

Don’t fall for gimmicky offers like market-rate, indexed, and tiered-rate plans that make too-good-to-be-true promises.

Do read the energy facts label (EFL) of any plan you’re considering to understand the terms, conditions, rates, and fees.

Make the Right Choice With Energy Texas

A lot of people don’t like shopping for an electricity provider. It’s not something we do every day; thus, we don’t always know the ins and outs of it. And that leaves a lot of room for mistakes when it comes to plans and providers.

With Energy Texas, you can avoid that uncertainty. We’re committed to doing energy the right way – that means 100% renewable electricity at competitive rates, delivered with a smile from Texans who care. 

Compare plans today and come join us at Energy Texas!



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