Shopping for cheap electricity in Texas is pretty simple when
using an easy to compare site like Shop Texas Electricity, but you have to
understand exactly what kind of plan you need to get the most out of it. There
are two main plans: fixed and variable. Both plans get you the same
electricity, but you will pay different amounts and your terms and conditions
may be different depending on which you choose.
Fixed rate
plans are the best when you can find one at a low rate. These plans lock in your
residential electricity rates for the duration of your contract length, which
can be anywhere between three months and three years, depending on your
provider and plan. Even if the energy market changes and prices go up, you will
continue to pay the same amount for your electricity. The only way your price
can change is if the transmission and distribution utility change their fees or
the Electricity Reliability Council of Texas changes their fees or implements
new policies which could impact costs on the REP or TDU end. These types of
plans usually have an early termination fee if you back out of your contract
before it ends.
Variable Rate
Variable rate
plans work just the way they sound: they vary. Every month, your electricity
rate, the cost per kilowatt hour of electricity used, will go up or down
depending on how the market is changing. These plans are best if you only need
electricity for a very short time, as they are often a little under the cost of
a fixed rate plan, but due to market conditions, their prices could climb much
higher than if you locked in a fixed rate price. Variable rate plans don’t have
a contract length, so you can cancel any time.
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