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Energy Rates in Texas vs. Plan Term Length

Jul 12 2022

Thanks to a deregulated electricity market, most residents have the power to choose their Texas retail electricity provider (REP). They can also choose from many plan term lengths. Energy rates in Texas vary by plans. Often, the term length can affect those rates. 

What term lengths do Texas electricity providers offer?

To meet varying consumer needs, Texas electricity providers offer plans with numerous term length options. The most common term lengths include:

  • Month-to-month: No long-term contract means you can switch plans or providers anytime. However, your rate can change each month. For this reason, month-to-month plans are also referred to as variable-rate plans.
  • 6-month: A contract for half a year, with energy rates locked in for that amount of time.
  • 12-month: One of the most common electricity plan term lengths. You get an entire year of price security.
  • 18-month: A term length with price security for a year and a half.
  • 24-month: Two years of locked-in energy rates.
  • 36-month: Three years of fixed electricity rates.

Any plans with more than a month-to-month term length are also referred to as fixed-rate plans. That is to say, enrolling on a fixed-rate plan lets you lock in the same energy rate for the whole contract.

How do energy rates in Texas relate to a plan’s term length?

Often, but not always, there is an inverse relationship between the number of months of a contract and the price per kWh. That is, the longer the contract term length, the lower the Texas electricity rates may be. 

Why? The longer you’re locked in at a fixed price, the less guessing a retail electricity provider has to do when purchasing power. (And, if an electricity provider guesses too low and cannot supply enough power, they must purchase more power at higher prices to meet customer demand.)

Therefore, the lower rates give consumers an incentive to choose longer term lengths. As a result, the electricity provider lowers its risk of over- or under-buying energy.

Texas electricity rates for long-term plans

When you shop for electricity, you’ll probably see a lot of fixed-rate plans available. Many people prefer to enroll in a long-term electricity plan, for a number of reasons. 

What are the benefits and drawbacks a long-term electricity plan?

An electricity contract with a term length of 6 or more months has a number of benefits:

  • You get a steady, fixed rate for a specific period of time.
  • It’s easier to construct a budget.
  • You won’t have to shop for energy or switch providers as often.

But, a few things to consider about fixed-rate plans include:

  • Many contracts have early cancellation fees
  • You’re locked into a long-term commitment
  • You may not be able to take advantage of market rate drops if they occur

If you think the pros of a long-term contract outweigh the cons, this might be the type of term length for you. If not, you may want to explore a variable-rate plan.

Energy rates in Texas for short-term plans 

As you shop and compare electricity plans for the best electricity rates in Texas, you may come across a number of appealing short-term plans. Some people prefer these variable-rate options.

What are the benefits and drawbacks of a short-term electricity plan?

Going month-to-month with your home electricity offers some benefits to the consumer, such as:

  • The flexibility to change plans anytime, without early termination fees
  • More chances to take advantage of lower energy rates in Texas
  • No long-term commitment to any provider

As with fixed-rate plans, variable-rate plans have a few drawbacks, like:

  • Your rate can spike without warning
  • It’s more difficult to budget (you’re at the mercy of the energy market)
  • You may spend more time shopping for energy plans and switching providers

If you think the pros of a short-term contract outweigh the cons, you may want to choose this type of plan. However, if it feels too risky for you, a fixed-rate plan may be your better option.

What affects the variable energy rates in Texas?

The energy rates in Texas for variable-rate plans depend on the market price of energy. As a result, month-to-month electricity plans can experience more volatility than fixed-rate plans. Forces affecting the variable rate include weather, government regulations, geopolitical events, outages and other outside factors, like pandemics and natural catastrophes.

How do I find past rates for a month-to-month plan?

If you’re considering signing up for a month-to-month electricity plan, you probably want to know about the recent monthly rates. You can usually find this information on the REP’s website or by searching the web for the REP and its “past variable rates” or “historical pricing.”

Transmission/Distribution Service Providers (TDSPs) like ERCOT also lists past variable rates for month-to-month Texas electricity plans. 

What’s better: a short-term or a long-term energy plan?

As you can see, each type of electricity plan has its own set of pros and cons. Therefore, these should be  weighed against your unique situation, budget and lifestyle. Then, with careful consideration, you can narrow down which type of plan suits you best.

Shop Texas electricity rates for all term lengths

In conclusion, you now know how energy rates in Texas and a plan’s contract length can be related. As a result, you can now better understand the options available to you. And, you probably have a term length in mind that would best suit your unique situation. 

So, all that’s left to do is simplify your search by using Everything Energy’s tools to shop and compare plans. We make it easy to find your perfect energy match from Texas electricity providers you can trust!

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First Look: Compare Electricity Rates the Newest Way

Jun 21 2022

If you’re one of the many Texans wanting to shop and compare electricity rates from different providers, listen up. We have a cool new tool for you to use!

Everything Energy’s Personalized Pricing tool lets you sort and filter electricity plans using your very own usage history — gathered from your home’s Smart Meter (with your consent, of course). That data allows us to provide you Everything Energy’s Personalized Pricing tool lets you sort and filter electricity plans using your very own usage history. The data we gather from your home’s Smart Meter (with your consent, of course) allows us to provide you with more accurate bill estimates. With those cents per kilowatt hour (kWh) rates translated into dollar figures, budgeting is a breeze. Best of all, it’s so simple. You can start viewing your personalized pricing and comparing electricity rates in less than five minutes!

Benefits of utilizing your Smart Meter data to compare electricity rates

Your home’s Smart Meter records your electricity usage in real time, typically at 15-minute intervals. Then, it digitally sends that data to your utility [Oncor, CenterPoint, AEP Texas or Texas-New Mexico Power (TNMP)]. Smart Meter Texas™ (SMT) securely stores that data. When you authorize Everything Energy to access that historical data to help you shop and compare plans, you can view:

  • Your lowest, highest and average monthly usage
  • Your usage breakdown by weekend vs. weekday and night vs. daytime
  • Personalized rates and monthly bill estimates from Texas electricity providers
  • Plans that best suit your established usage habits

With all of this information, your search for some of the best electricity rates and providers for your unique needs will provide better-fitting results. For example, imagine your data shows that you use electricity a lot at night. You can select the “Weeknight Discount” filter to narrow your search down to plans that offer lower rates at night.

In short, by considering the big picture, you can make a more informed decision about your next electricity plan.

compare electricity rates
Everything Energy’s Personal Pricing Tool displaying usage analysis

Personalized pricing from electricity providers, at your fingertips

In just three simple steps, you’ll be able to compare electricity rates and find the perfect match to meet your family’s needs, preferences and lifestyle.

Step 1: Help us find your Smart Meter

After you enter your ZIP code on EverythingEnergy.com, you’ll be taken to a page showing electricity plans in your area. In the left navigation of this page, click the “Get Started” button. A screen will appear asking for your service address. This will help us locate your Smart Meter.

Step 2: Obtain an authorization email

To protect your privacy, Smart Meter Texas requires each customer to provide authorization if they want to give a third party (like Everything Energy) to access it. On this screen, simply input your email address and full name as it appears on your electricity bill and select your current provider. After you press ‘Submit,’ check your inbox — you should see an email from Smart Meter Texas.

Step 3: Confirm your authorization

In the email you receive, simply click the Confirm button at the bottom of the email. Then, go back to the Everything Energy screen and let us know that you’ve completed the authorization process by clicking the ‘Permission Granted’ button.

Congratulations! You can now put your own data to work as you shop and compare energy plans from trusted electricity providers in Texas.

Compare electricity rates today

Have you tried our new, personalized approach to shopping for energy? You’re just a few steps away from customized search results. Compare electricity plans and rates, and find the perfect energy match for you. Try it out!

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How to compare electricity plans

Apr 07 2021

If you are new to Texas, the electricity market here may be puzzling. In deregulated areas of Texas, electricity customers shop for the right plan from a variety of providers in the market. This competitive market was designed to spur innovative electricity plans that help serve customers better.

For newcomers unfamiliar with shopping for electricity, choosing the right plan can be intimidating. We’ve put together this list of terms and details to help you select a plan and a provider with confidence.

How to pick the best electricity plan

Confirm your current contract

Do you already have an electricity contract? Don’t switch electricity providers before confirming your current contract period. If your current plan is not yet up for renewal, you might be subject to a cancellation fee if you switch. Most electricity providers will not charge the cancellation fee if you are moving, but if you switch to another provider before your contract is complete, there will likely be a cancellation fee on your last bill. Check your plan details on your providers website, or look at you electricity bill to see if there’s a contract binding you to your current provider.

How much electricity do you use?

Head over to your account online or check your bill to determine the amount of electricity you consume every month. While your usage will likely be higher at certain times of the year, knowing your range of usage will help you select the best plan while you are shopping. Most electricity websites in Texas show Average Price per kWh at Usage Levels of 500, 1000 and 2000. If you know where your usage sits within those levels, it will be easier to compare plans.

While you are looking at your usage, get a feel for your monthly bill and how it varies at times of the year so you can compare options to what you have now. In Texas, most of us use more electricity in summer, while we are running our air conditioning. But winter usage often depends on whether you have gas or electric heat. It’s worth saying that electricity prices rise and fall during the year due to market conditions. There’s no guarantee that rates when you are shopping will be in the same range as they were last time you signed up.

What term length do you prefer?

Texas electricity market has a huge variety of term durations that differ in price points. If you’re looking for stability in prices, long-term contracts will meet your needs. On the other hand, shorter durations don’t tie you to an extended commitment. The most common plan duration is 12 months, but those that don’t enjoy shopping for electricity often select longer plans, to lock in a price and push off having to shop again. As long as you are getting a rate you like, there’s no real downside to a longer term length. If you are renting a home, it can be handy to match the term length to your rental agreement.

Determine if you want a fixed or variable rate

Most plans in deregulated power market come at either fixed or variable rates. 

Fixed rates are sometimes called Secure or Term. These provide you with a fixed price for the length of your contract. They provide price security, but they usually have a cancellation fee if you switch away before the term is up. The cancellation fee is usually not applicable if you move.

Variable rate plans are sometimes called Flex plans or Month To Month plans. In this arrangement, there is no term length and you can switch providers anytime. However, your electricity rate can change each month. These plans don’t lock you into a commitment, so they are great for consumers that are in a short-term situation.

Plans with extra

Most electricity providers have a wide range of plans. You may see plans with rewards or incentives – like cool technical gadgets or gift certificates or sports memorabilia. These plans may cost a little more, but you might find a great perk – like a signed football jersey.

Some of the perks can be altruistic. Several providers have plans that include making a charitable donation when you sign up. Reliant Energy has a

If these types of plans appeal to you, Everything Energy has filters to help you find plans with an incentive.

Compare electricity plans & providers

You can go to popular Retail Electricity Providers’ sites to shop individually. You’ll get lots of information, but it can be time consuming to shop each provider one at a time. You can also check Texas’ state-run Power to Choose website, and other relevant websites. Since you are here, check out our comparison engine. We partner with reliable, and trusted electricity providers with long histories of great customer service. Everything Energy makes it easy to shop these REPs with a wide diversity of plan selections. We’ve got helpful filters to help you narrow down your search based on plan types and term lengths, so you can see only the plans you are interested in. Finding the best electricity rate for your family has never been easier.

Where ever you choose to shop, look for these details:

Average Price per kWh: this is the all-in price you would pay at a given usage level – sites usually display 500, 1000, 2000. The price factors in the cost of the electricity, delivery charges from the utility company, and taxes and surcharges. Note that the taxes and surcharges can change over time.

Usage Level Selector: As noted above, most sites will display price at a couple usage levels – set it at the level closest to your usage to see pricing most relevant to your home.

Rate Type & Cancellation fee: Once you know which plan type you prefer, you can search and filter based on this information.

Go through the Electricity Facts Label (EFL)

EFL (similar to a Nutrition Facts Label) of each plan that your chosen provider offers allows you to ascertain your consumption’s price point. If you need help understanding a plan’s EFL, we have a guide for you.

What’s the TDSP charge?

While REPs sell you the electricity and bill you for what you use, the local utility company delivers the power over the lines and meters they maintain. The utility companies, also called Transmission and Distribution Service Provider (TDSP), own and maintain the poles, wires, and meters. They’re also responsible for reading the meters and reporting usage for each meter to the REP, who does the billing.

The charges from these utilies are passed on to the consumer via their electricity bill, and are known as the TDSP charge. In Texas, the TDSPs have to get permission from the PUC to raise their rates. This does happen occasionally, and when it does, even customers on a contract will see a higher average price on their bill once the new TDSP charge is factored in. The TDSP charge is calculated into the Average Price per kWh.

These TDSP charges apply to all electricity customers in the ulitity area, regardless of which REP the customer is with. So you can’t get out of this fee by changing REPs. The TDSP will usually bill this charge to your REP, who will, in turn, indicate it on your bill without any markup. To view TDSP charges from Texas Utility Providers in deregulated areas, click here to see a great resource from Cirro Energy.

What if I Change my Mind after Signing Up?

You can ask your power provider to cancel your enrollment within three business days from when they delivered the Terms of Service agreement to you, whether you got the deal in the mail or signed it online. You’ll then receive a confirmation to cancel your plan (alongside the information on how to cancel) through the mail.

According to the state directives, your retail electricity provider should allow you between 3 to 14 days to cancel the plan without charging you any penalty. If you do so after this period has elapsed, you may pay the cancellation fee. 

Wrapping Up

You now have an idea on how to shop around for the best electricity plan. If you are ready to shop, it’s as easy as entering your zip code to see the best electricity plans in your area.

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How to compare electricity plans by reading the EFL

Apr 07 2021

An EFL or Electricity Facts Label is a lot like the nutrition label on the back of food products at the grocery store. When you pick up a can of corn and turn it to the back, you can read about everything that the can has inside it. The EFL is the same way. It will tell you everything that is inside a particular electricity plan from a particular provider. The EFL is am important tool to help you compare electricity plans.

Lady shopping at a laptop.

What is an EFL?

An Electricity Facts Label is a document that electricity providers are required to provide to the public. It helps to break down every part of a retail energy provider’s electricity plans. This way, you can make sure you understand what’s in a plan and why it matters in terms of what you’ll pay and what you get.

EFLs have standard components so that all companies offering plans provide the same information – even though it might look slightly different. This allow you to easily compare energy plans of all electricity providers. This is specifically standardized in Texas for deregulated areas by the PUCT (Public Utility Commission of Texas).

How does an EFL help you compare electricity plans?

To compare electricity plans, you have to understand the details of each plan you are looking at.

At the top of the EFL you’re going to see information like the name of the REP, the name of the plan, and the date this EFL went into effect.

How to compare the price of electricity plan

In the Pricing Disclosure, you will see a breakdown of all the components of the Average Price. Energy charge is what the REP charges for actual electricity. You may see a base charge or usage charge, which are monthly fees from the REP. If they are included in the price of the plan, they have to be listed here. So, if you don’t see those, they don’t apply to your plan.

The pricing disclosure will also include Delivery Charges from the company that owns the poles & wires in your area. Those utilities charge their fees to the REP, who passes them to consumers each month. These fees are fixed by the PUC, and you can’t change them by looking for a different plan or REP. Delivery charges could be per month, per kWH, or both. You can learn more about TDSP charges from this post.

You’ll also see here the Average Price per kWh, listed at three usage levels: 500, 1000, 2000. This average price factors in all the elements of price, and determines what a customer would pay per kWh at each of those usage levels. That number is an easy way to compare electricity prices across different electricity providers and plans.

On average, Texans used about 1,140 kWh per month in 2019. Remember that your usage probably varies month to month, so make sure to understand your usage over the year and look at the pricing for those levels.

Other Plan Details in the EFL

Towards the bottom of the EFL, you’re going to see details about the plan It’s often in a question format, but not always. You’ll see information related to whether the plan is a fixed rate or variable and the term length, for example.

In other words, you can see whether the plan has its rate change from month to month or whether it’s always the same. You’ll also see how long your contract will go for, called the “contract term.”

There could be data about the “termination fee” if you want to quit your contract before it expires. Many providers may actually waive this fee if you show them that you’re actually moving away.

You’ll see a question related to whether your price can change during the contract period. Usually, the fact sheet will indicate that the answer is “yes,” it can change. The next line indicates why and how your price could change. Even fixed price plans can have price changes if the PUC allows the TDSP to increase their rates, which are factored into the price.

This section of the EFL also includes information on how much renewable energy the plan contains.

Summing Up

The EFL is a very helpful guide when shopping for electricity and we definitely encourage you to review while you are comparing electricity plans. By learning to read the EFL, you understand the exact rates for the electricity plans available in your area, and it will be easy to compare one plan’s rates to the rate from another plan. You’ll be able to see what their tiered plans look like and whether plan A has a lower starting rate for the first tier up to 1000 kWh than plan B. Which one is best for you will depend on how much your household actually uses, so this is important to keep in mind when you’re reading all of these different sheets. Learning to do so will greatly increase your understanding of the situation. If you want to learn more about comparing electricity plans, check out this guide.

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