Electricity Shopping in Texas

When shopping for a Houston electricity provider, it’s important to know what kind of plans are available. Retail Electricity Providers (REPs) offer plans that can vary by contract length, payment options, and whether they offer renewable energy. Plans can feature a fixed rate, where your cost per kilowatt hour (kWh) is set at one price for a given length of time. Variable rate plans can change from month to month.

Electricity Shopping in Texas

Fixed Rate Plan:

Fixed rate plans are particularly attractive when rates are very low. This will lock in your rate for the length of time determined by your contract terms. Contract lengths can vary from three months to three years. If the market rate changes at any time during your contract, you will continue to pay your locked in rate, whether it is lower or higher. Your rate may change slightly if the Transmission and Distribution Utility (TDU) changes their fees, if ERCOT changes administrative fees, or if your REP imposes fees to cover costs associated with new laws and regulation. This type of plan makes it easier to budget your monthly electricity expenses. If you decide to back out of a fixed rate plan before your contract term ends, you will likely have to pay a cancellation fee.

Variable Rate Plan:

Variable plans have no contract length, meaning you can cancel one at any time without any penalty. However, the rate you pay can change from month to month, based on the market value and your REP’s discretion. If prices are on the decline, you’ll likely get a better rate than those in fixed plans, but if a natural disaster, cold winter, or other negative market condition crops up, your rates could spike. However, the power to choose and switch REPs at any time with no contract cancellation fees, REPs will tend to keep their rates as low as possible.

Terms, Conditions, and Options:

When shopping for lower energy costs, be sure to understand the contract terms and conditions. Pick a contract term length that best suits you, whether it is a month to month plan, or a fixed rate over a year or two. If you prefer to use renewable electricity, check your REP’s plans to see if they offer any green or renewable plans. The plan’s electricity facts label (EFL) to see what percentage of the plan’s electricity comes from renewable sources. Finally, some plans are available as pre-paid. With these, you add money to your energy account and as you use electricity, the money is deducted for the electricity you use. REPs will send you an email or a text message to alert you of how much money is left in your prepaid account. If your account runs out before you add more money, your electricity will be shut off. These plans tend to have higher rates than the others.

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