Fixed Rate Electricity

When you bought your fixer-upper, you dreamed of many projects. You dreamed about installing bay windows, planting a garden, and maybe even putting a pool in the backyard. 

But you never thought that choosing an electricity plan would be such a chore. You have spent the week trying to understand different electricity plans and the companies that offer them…with little success. 

But wait! There’s a better way. 

With Power Wizard’s Shopping Tool, quit your full-time job shopping for electric plans and find your perfect plan in minutes!

Could a fixed-rate plan be right for you? Find out with our Shopping Tool first; then, you can come back to learn more about it.

 

In this guide, you will learn exactly what a fixed-rate plan is, how it works, and whether it might be the right plan for you.

What Is Fixed-rate Electricity?

As a result of electricity deregulation in Texas, electricity customers now have the ability to select both their own Retail Electric Provider (REP) and electricity plan.

Fixed-rate electricity is one plan type of the many plans that are available to consumers in Texas.

Under a fixed-rate plan, your electricity rate is fixed for the entire lifetime of your contract period.

How Does Fixed-rate Electricity Work?

Deciphering an electricity bill can often become a source of stress and frustration for electricity customers.

With electricity prices fluctuating on an almost minute by minute basis, it can be even harder for customers to anticipate what their electricity bill will be each month.

For customers who have tight budget constraints, unexpectedly high electricity bills can be an enormous financial burden and a source of great stress.

Fixed-rate plans may help alleviate many of these frustrations for some customers.

Advantages of Fixed-rate Electricity in Texas

Fixed-rate plans can offer a multitude of benefits for Texas electricity consumers.

With several different plan terms available, having a fixed rate can prevent unexpectedly high bills and allow customers peace of mind, knowing exactly what they will be paying each and every month.

Advantage #1: Set Price

Under a fixed-rate plan, customers are able to set their electricity rate for a specified length of time.

What does this mean, exactly?

This means that, no matter how much electricity is used each month, the cost per kWh used will remain the same each and every month.

For example, if a customer signs up for a fixed-rate plan offering a 9¢ per kWh price, they will be charged 9¢ for every kWh of electricity they use throughout the duration of their contract, no matter what the current market pricing per kWh may be.

This allows customers to have a sense of stability with the price protection offered by these fixed-rate plans.

Electricity prices can often be uncertain, with the possibility of increasing at a moment’s notice.

×

Locking in a rate with a fixed-rate plan can protect customers from unexpected spikes in electricity pricing.

Advantage #2: No Bill Shock

Since the pricing is set under a fixed-rate plan, this prevents bill shock resulting from an unexpectedly high electricity bill.

Fixed-rate plans give customers peace of mind, knowing that even in the summer months, when electricity usage is often at its highest, their rate will always remain the same.

Under these plans, customers have greater control over their budgets and monthly expenses.

For customers on a fixed budget, this is often the greatest advantage of a fixed-rate plan.

Advantage #3: Flexible Terms

The final main advantage of fixed-rate plans is the customers’ ability to choose their contract terms from a multitude of options.

Most fixed-rate plans can be set for as few as 3 months, going as long as 36 months.

The ability to choose the contract term that best suits their needs is another way customers are able to take control over their electricity bills under fixed-rate plans.

Perhaps you are a student who will only be staying in your apartment for one semester. You would probably want a shorter contract term of 3 or 6 months.

However, if you have a family and are living in your home without any plans to move, you may benefit from selecting one of the longest terms, such as the 36-month plan.

Often, slightly lower rates are offered with longer contract terms.

Disadvantages of Fixed-rate Electricity in Texas

Although the advantages of a fixed-rate plan may sound quite compelling and might have you itching to sign up immediately…

Don’t make up your mind just yet.

There are also some very important disadvantages that you need to consider before deciding if a fixed-rate plan will work for you.

Disadvantage #1: Potentially Higher Rates

The biggest disadvantage of locking in your electricity rate with a fixed-rate plan is the potential to pay higher rates as a result of this locked-in price.

When you sign up for a fixed-rate plan, you are taking a risk. If the market rates for electricity increase during your contract term, then you will save money.

But what happens if electricity market rates decrease during your contract term?

You guessed it.

If the market rates for electricity drop lower than your fixed-rate pricing, you will be stuck in your contract, paying rates higher than the current market rates.

In addition to this possibility, there is also another way you can end up potentially paying more with a fixed-rate plan.

Just like you, as the customer, are taking a risk when signing up for a fixed-rate plan, the REP is also taking a risk by allowing you to lock in a fixed-rate for the contract term you select.

×

In order to offset this risk for the REP, they will often charge slightly higher rates for fixed-rate plans than they charge for variable-rate plans.

Disadvantage #2: Exit Fees

In addition to potentially higher rates, fixed-rate plans often come with exit fees, also known as early termination fees.

As previously mentioned, when you select a fixed-rate plan, you are also able to choose the contract term, which is the length of time that your rate will be locked in. In most cases, these term lengths vary from 3 to 36 months.

The disadvantage here is that most of these plans also have penalties for early contract termination written into their fine print.

This means that if you cancel your contract early for any reason, you may incur additional fees, which can sometimes be as much as several hundreds of dollars.

When Should You Shop For a Fixed-rate Plan?

Knowing when to shop for a new electricity plan is often just as important as knowing which type of plan you should sign up for.

In terms of timing, there are many different factors that you should consider in order to make the most cost-effective change possible.

30-60 Days Out From Contract Expiration

If you decide you want to opt for a fixed-rate electricity plan and plan to research your options on your own, you need to make sure you give yourself plenty of time to carefully consider and compare all of your options.

Keep in mind that there are more than 160 REPs that service the state of Texas, with each REP offering many different plan types. This can result in the need to research literally hundreds of plan options.

Since you will need to manually google search or call each REP to get the information you need, it’s best if you start your research between 30-60 days prior to the expiration date of your current plan.

This will give you plenty of time to compare plan options for a seamless transition because shopping the manual way can take days and tons of comparison time.

But what do you do if you don’t have the time needed to manually research your options?

Power Wizard has the solution you need.

In less time than it takes to track down your computer’s power cord and boot it up, Power Wizard can match you with the very best plan for your needs.

Simply input a few details into Power Wizard’s Shopping Tool and let us do the work for you in a matter of mere minutes.

×

30 days not required.

When Moving To A New Home

You will have all new factors to consider when picking a plan for your new home.

When it comes to figuring out which type of plan is best for you, many of your home’s details must be considered.

Some of these details include:

• Home size
• Age of home
• Usage
• Location

Obviously when you move into a new home, many of these factors, if not all of them, will change.

This makes moving into a new home a great time to re-evaluate your options and search for a plan that will better meet the needs of your new home.

Once again, you have 2 options when it comes to finding the best plan:

1. Researching manually
2. Power Wizard’s Shopping Tool

Don’t forget about all of the time, energy, and headaches that go along with researching your options manually.

Moving is stressful enough on its own. Do you really want the added stress of spending weeks online or on the phone researching your electricity plan options?

Probably not.

Enter Power Wizard on the scene.

Give us a mere 5 minutes of your time and a few easy details about your home and energy usage.

We will, in turn, do all of the research for you using our lightning-fast database to match you with the very best electricity plan for you.

With that checked off of your list, you are free to focus on more fun things like packing.

If You Aren’t in a Current Contract

Are you currently on a month-to-month electricity plan?

Or maybe your plan is already expired.

If you find yourself in either of these situations, now is the perfect time for you to shop for a new electricity plan.

You could choose to research all of your options on your own…

But why would you want to waste all that time on research when you could be saving money in a matter of minutes?

Earn the savings you deserve today by letting Power Wizard’s unbiased algorithm match you with the ideal plan for your own unique needs.

×

Is Variable or Fixed-rate Electricity better?

In addition to fixed-rate electricity plans, there are many other types of electricity plans available to you as well. It’s important that you shop around to make sure to get one that fits your needs the best.

Besides fixed-rate electricity plans, variable-rate plans are also a popular choice.

Unlike fixed-rate plans, variable-rate plans do not lock customers into a set rate for the term of the contract. Under a variable-rate plan, rates will fluctuate based on the current market rates for electricity.

This means that under a variable-rate plan, when market rates decline, you’ll pay less. When market rates increase, you’ll pay more.

Which option is best for you?

This can be a virtually impossible question to answer on your own. With so many options available and factors to consider, it could potentially take you weeks to answer this question.

And even then, how can you be 100% sure that you’ve made the best choice?

The short answer is that you can’t. Not unless you use Power Wizard’s, Shopping Tool.

Power Wizard’s unbiased tool can, without question, match you with the best plan for your individual needs.

Who Fixed-rate Electricity Is For

The Jacksons are a young family that recently moved into a new apartment in Waco. Their family consists of Mark, who works full time outside of the home, and Jessica, a stay-at-home mom of 11-month-old twins.

Mark and Jessica are on a tight budget, with Mark often working overtime in order to meet their financial needs.

Living paycheck to paycheck, the Jacksons can’t afford to be surprised with a huge spike in electricity costs. They feel more comfortable with the price protection provided to them with a fixed-rate electricity plan.

But is a fixed-rate plan truly saving the Jackson family money overall?

Without using Power Wizard’s Shopping Tool, they may never know.

Who Variable Electricity Is For

Monica recently moved into an apartment down the hall from the Jackson family. Monica is a young professional dedicated to her career. She often works late nights at the office and frequently brings her work home with her on the nights she leaves the office early.

Monica is a pessimist and doesn’t usually trust any type of marketing campaign. She feels like fixed-rate plans are a way to lock customers into paying higher rates than they should.

Due to this belief, Monica has selected a variable-rate plan, which allows her to be billed according to current market prices of electricity.

Even though this type of plan requires Monica to constantly monitor the market changes in order to know what her bill might be, she prefers this to a fixed-rate plan that could potentially charge her rates that are higher than the current market rates.

Is a variable-rate plan really the one that best meets Monica’s individual needs?

Unless she allows Power Wizard to find the best plan for her, she may actually be paying higher rates in the long run.

×

How Much Does Fixed-rate Electricity Cost?

At the end of the day, you just want to save as much money as you can.

What you’re probably looking for is the cheapest electricity plan available to you.

It’s important to realize that the cheapest plans may not be the best fit for your individual needs.

So, how much does fixed-rate electricity actually cost?

When thinking about the actual cost of electricity, there are many factors that must be taken into consideration, such as:

• Home size
• Age of home
• Usage
• Contract length
• Fees
• Location
• Etc.

Where To Find the Cheapest Fixed-rate Electricity in Texas

The “cheapest” could change every 15 minutes as the market fluctuates. One day you have a great rate because it is fixed. But if the market drops down you could be grossly overpaying.

The cheapest will depend on your personal circumstances.

Remember, the cheapest does not equal the best.

The cheapest plan for you will be the plan that best fits your own unique electricity needs.

Alternatives to Fixed-rate Electricity Plans

We’ve already discussed both fixed-rate and variable-rate plans, but there are a few other plans that you may want to consider.

Some of the other popular plans are:

• Prepaid plans
• month-to-month plans

Prepaid plans

With a prepaid electricity plan, you pay for electricity as you go.

Prepaid plans require that you maintain a minimum balance on your account. Your account is then deducted according to the electricity that you use.

These types of plans are great for people who:

• Want to avoid credit checks or large deposits
• Don’t want to commit to a long term contract
• Want to avoid other fees, such as early termination fees

There are, however, some pretty significant downsides to this type of plan, including:

• Customers must constantly monitor their account, adding funds when their balance gets low
• The possibility of service being disconnected if the account balance drops too low

×

Month-to-month plans

Month-to-month electricity plans allow customers to avoid being locked into a contract for an extended period of time.

When you are not contractually bound to a specific REP or plan, you have the ability to shop around and find a plan that better meets your needs.

Month-to-month plans could be a good option for those who travel frequently, who are in between other types of plans, or who only need service for a short amount of time.

Should You Sign Up For a Fixed-rate Electricity Plan in Texas?

So, the question remains…

Should you sign up for a fixed-rate electricity plan?

Maybe it is for you and maybe it isn’t.

The important thing is that you sign up for the best plan available on the market that matches your unique energy needs.

The best way to find a plan that matches your individual needs and saves you the most money is by using Power Wizard’s Shopping Tool.

All you need to do is provide some basic information about your home and electricity usage.

No headaches.

No hassles.

In less than 5 minutes, Power Wizard’s unique and unbiased program will match you with the perfect plan for you.