Wednesday, 22 June 2016

Fixed or Variable? Finding the Best Houston Electricity Rates

            Do you know how to find the best Houston electricity rates? Do you know what benefits each plan offers from a particular provider? Have you looked at several providers and compared the plans and rates? Knowing what kind of electricity plan to look for is integral to getting a low Houston electricity rate. Fixed rate and variable rate plans work very differently and while one may look more attractive on the surface, it could end up costing you more.

            Fixed Rate Plan
            Depending on the time of year, these plans could have a higher rate than you’d hope. During the summer and winter, energy rates tend to be higher due to increased electricity and energy usage for AC and heat, respectively. It’s ideal to get the best rates during the spring or fall when rates are lower, but you can still save with these plans.

            Locking in your fixed rate means that your rate won’t change for the duration of your contract. The contract terms generally last between three months and three years, depending on the provider and plan. Throughout this time, with the exception of TDSP changes and new regulations, your rate will not change. No matter how much the market fluctuates, including as a result of severe storms, you keep paying the same rate. It’s a safeguard for the future of your energy use.

            Variable Rate Plan
            This plan might look more attractive on the surface compared to a fixed rate plan. They might be a bit cheaper at the time you sign up, but the rate will change every month. The good thing is you can switch plans at any time while in a variable rate plan, as they have no contract. If you’re in the last month or so of summer and want to get the good fall rates, a variable plan can be beneficial to get you through those last few weeks before the rates drop without locking you out of good rates due to a contract.

            Check the EFL
            Fixed rate plans lock in your rate, so you pay the same rate throughout your contract. Since there is a contract, there is almost always an early termination fee if you decide to switch before your contract expires. Other fees such as meter reading and base charge are applicable to any plan you get. The electricity facts label (EFL) for a plan will tell you what fees and other charges are applicable to your plan and how they are implemented. The overall rate you see for a plan will usually take into account the charges like meter reading and base charge, breaking it down so you see overall how much you’re paying for electricity per kilowatt hour.

            Read your EFL carefully to ensure there are no surprises. Some plans may show a low rate, but in the EFL that low rate only applies to a specific range of electricity use. Anything outside that range could be notably higher. Once you find a few plans you like and compare their EFLs and rates, you’ll be able to pick the one that gives you the best Houston electricity rate for your home.

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