Fixed-rate energy plans are a great way to help reduce big bill shocks and save money. At Home Energy Club, we offer a variety of low fixed-rate electricity plans from trusted providers like Gexa Energy, Reliant, Pulse Power, and more.
What is a Fixed-Rate Electricity Plan?
Fixed-rate energy plans remain locked throughout the entirety of one’s enrollment term. This means the energy rate that the company charges you when you enroll is the same rate you will be charged for each month under the plan.
Fixed rates ensure price stability, which protects against spikes in rates during peak power demand periods, such as during summer or extreme winter weather events.
With a price-protected, fixed-rate electricity plan, you can set an electricity budget that should generally fluctuate less every month. This takes the stress off of you and your financial planning.
Fixed plans typically come in the following term lengths:
- 12 months
- 24 months
- 36 months
You may choose the term length that you feel is best for you. This is usually determined by how long you plan to maintain your current living situation or your expectations for future energy rates.
The disadvantages of fixed-rate plans include the restraint of a term contract, meaning you may not be able to cancel your energy contract without an early termination fee if you wish to change plans. You may also miss out on lower rates if there’s a decline in market pricing during your contract term.
Summer and winter months tend to drive up pricing due to more energy demand as people increase air conditioning or heating usage. The peak use of energy of appliances will impact your bill.
Tip: Try to enroll in a fixed-rate energy plan in the late winter or early spring as rates will typically be lower during these times.
Is Fixed-Rate or Variable-Rate Better?
Variable rates have caused large numbers of consumer complaints, causing most energy providers to stop offering variable-rate plans. Variable rates fluctuate with the market price of electricity and the discretion of the power company.
Market rates for electricity are often influenced by:
- Weather
- Demand
- Commodity fuel prices that drive generation costs
- Energy generation plant and distribution system efficiency
- Decisions made by individual electric companies to increase pricing
Thus, your monthly electricity bill will change month-to-month depending on the new rate, even if your energy usage stays the same. This can lead to unpredictable bills, creating major bill surprises and affecting your finances.
We urge homeowners to be very cautious when enrolling in a variable-rate plan. To protect Home Energy Club members, we have never offered variable rate plans in Texas.
Choosing a Fixed-Rate Electricity Plan
After deciding on a fixed-rate energy plan, you’ll want to compare rates to find the best fit for your home.
First, determine which plan is right for your home size based on your kWh usage. A typical apartment uses an average of about 600 kWh per month, a small house uses about 1,200 kWh per month, and a larger home uses 2,000 kWh or more per month. If you want to dive deeper, you can calculate your average electricity usage by estimating the energy of your appliances in your house in addition to your home size.
Next, you should decide what term length you prefer. This could depend on your current finances, the time you plan to live in a certain place, or the expectations of future market prices. If market prices are expected to rise and keep increasing, you may want to opt for a longer-term plan.
However, if you don’t wish to enter a long-term contract or you’re a renter, you may consider a shorter term, such as a 6-month plan. Be sure to read the terms and conditions, and make sure they match your needs.
For more tips on how to choose the best energy plan, use our Savvy Shopper’s 10-Minute Guide.
Top Texas Electric Companies With Fixed Rates
Below are some top trusted light companies that offer affordable fixed-rate energy plans:
- Gexa Energy: offers low rates, 100% green plans, and a 60-day guarantee
- 4Change Energy: a Vistra Energy company (Fortune 500) with cheap rates on fixed plans
- Pulse Power: high-quality customer service offering low rates plus bill credits (owned by Shell Energy)
- Reliant Energy: highly-trusted provider with top-quality customer service offering affordable fixed rates
- Express Energy: a Vistra Energy-owned company with price-protected plans
