Should I Lock In My Electricity Rate

Shopping for an electric rate by yourself is like trying to assemble complicated furniture… except you’ve lost the user manual. That means that you have to see which nuts fit best with which bolts. While you could do it without a manual, the entire process takes far too long.

Here’s our secret: we’ve got something even more powerful than a user manual to help you find the perfect electricity plan!

It’s Called the Power Wizard Shopping Tool.

It’s not just the manual, which you’d still have to spend time on – it provides you with custom assembly, leading you straight to the best electricity rate for your needs!

When you’re wondering, should I lock in my electric rate – let Power Wizard check for you.

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In this guide, you’ll learn all about locked-in rates and if locking in a rate is the best option for you.

What is a locked-in electric rate?

A locked-in electric rate is when you agree to a specific rate for electricity, and the rate doesn’t change even if the market does.

You are promising to pay a certain amount per kWh, and the electric company is promising not to change that amount for the length of the contract.

Advantages of a locked-in electric rate

If you are researching electric rates in Texas, then you know the rates can change from month to month, sometimes even day today.

You want to know how to get the best electricity prices.

If you can lock in a low rate, it could save you money all year long.

That means no surprises on your electric bill.

You know how much you will pay because the rate doesn’t change.

Advantage #1: Savings

You work hard for your money.

You don’t want to give it away or spend more than you have to.

So how can you make sure you are paying the lowest possible price?

Locking in a low rate can save you hundreds of dollars a year.

There are a few ways to find the lowest rate:

• Look at your bills over the last 12 months and compare
• Check the average rates from the US Energy Information Center
• Compare rates from Texas REPs

Locking in your rate at the right time of year can make a difference, too.

Rates are based on supply and demand, so prices are usually higher in the summer. You’ll want to think about locking in a rate between December and March when electricity usage is lower.

You can sometimes save money on your electric bill by locking in a lower rate.

Advantage #2: No Surprises

If you have ever opened your bill and been shocked by the total due, you know how scary an unexpectedly high bill can be.

No one likes surprises in their electric bill.

Locking in your rate can help prevent those surprises. You will know the rate in advance and can calculate your bill based on your usage.

No weird formulas or online calculators are necessary.

This also helps you control your bill because you can decide how much electricity you can use to keep your bill within your budget.

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Knowing how much you are going to pay shouldn’t be rocket science.

You deserve simplicity and an easy-to-understand rate.

Disadvantages of a locked-in electric rate

Locking in your electricity rate can sometimes save you money.

But if you lock in a high rate, you could actually end up paying more.

You want to know that you are getting the best rate, but there are so many electricity companies in Texas to choose from.

You need to know who has the lowest rates before you lock in.

And if you only have 6 months left in your lease or plan on moving soon, you don’t want to get stuck in a long-term commitment and end up paying cancellation fees.

While locking in a fixed-rate plan can be a good thing, there are also a few disadvantages you should consider.

Disadvantage #1: Stuck in a high rate

You want a simple plan with a bill that is easy to understand.

But if you lock in your rate during a peak season, you could be stuck paying a higher bill all year long.

The average electric rates in Texas are constantly changing, and what is a good rate this month might not be so good next month.

Knowing when to shop is important. If you are looking to find a fixed-rate plan in July and get locked in, you will probably be paying premium prices all year.

Electricity is a supply and demand market.

This means that when demand is higher, so are prices.

Disadvantage #2: Plan length

Fixed-rate plans vary in length.

If you are only going to be living in your house or apartment for a few months, you don’t want to choose a long-term fixed-rate plan.

You’ll be locked in a plan that is longer than you need.

If you won’t be in the same place for long, a month-to-month plan may be better for you.

If you know how long you will need your plan, it will be easier to get the best electric rates.

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Don’t lock in a long-term rate if you have short-term needs.

You also want to read the fine print and know how much you will pay after the plan is up. Some plans have a much higher rate at the end of the plan, and you don’t want the plan to renew at a higher rate.

Keep track of when your plan is up for renewal so you can shop for a new plan in advance.

What electric plan offers a locked-in rate?

If you live in Texas, you probably have deregulated electricity. That means you can choose your REP and electric rate plan.

It also means that you have to figure out which type of plan is best for you.

There are dozens of REPs in Texas, and they each have different fixed-rate plans to choose from. Plans can vary in length and price.

The price can vary based on:

• Time of year
• Average usage
• Location
• Market prices
• Energy outlook

Since most companies offer a fixed-rate plan, you’ll want to look at as many as possible to compare them and find the best plan for you.

Fixed-rate electric plans

A fixed-rate electric plan lets you lock in the price of electricity for a set period of time.

This allows you to pay the same price per kWh all year long.

Even in the sweltering Texas heat, you could potentially save on summer electric bills. By locking in your rate during lower-cost seasons, you can get a deal that won’t leave you ‘heated’ when you open that summer bill.

Compared to variable-rate plans, which can vary from month to month, you have the same price for electricity every day, week, and month.

From the hottest August day to the coolest December night, you pay the same rate.

After you’ve weighed the pros and cons, you may find that locking in a fixed rate is best for you.

How fixed-rate electric plans work

A fixed-rate electric plan gives you a guaranteed price per kilowatt-hour of electricity.

Your price doesn’t change, even if the market does.

Things that won’t change your rate:

• How much power do you use
• The weather
• Price of energy for the REP
• Size of your home
• What time of day do you use the most electricity

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A fixed-rate plan gives you a rate that won’t change for the length of the contract.

Even if you use a lot of electricity this month and almost none next month, you still pay the same rate.

If you use electricity all day and not just more at night and on the weekend, you will pay the same amount in the morning as you will in the late afternoon.

Let’s say you choose a fixed-rate plan that is 10¢ per kWh, and that plan lasts 12 months. If you use 1000kWh of electricity, you will pay $100 before taxes and fees.

If you know how much it will cost, you can figure out what your bill will be.

That can help you stay comfortable and on budget.

Who are fixed-rate electric plans for?

Luis and Michelle have a small, older house in Plano with their three kids. The kids have activities and events every day. Even the summers are busy.

Michelle stays home during the day with their youngest child and keeps up with laundry and housekeeping, so she uses electricity all day.

When the kids come home from practice, they really need to cool down. Michelle keeps the AC on to make sure that her family stays comfortable.

Sometimes that means the AC is running non-stop.

They picked this house so their kids could go to the best schools in the district, and they love their community.

They are on a budget, and Luis wants to make sure that his family is paying the lowest rate in Plano per kWh so his family can stay cool in the Texas heat.

A fixed-rate plan might be the best plan for them.

Sarah is recently divorced and will be moving out of her apartment as soon as her lease is up. Her REP plan is about to renew, and she needs to pick a new plan, but she will only be in her apartment for two more months.

She is still on a budget, and moving will cost a lot, so she doesn’t want to get stuck with additional fees for canceling her plan early.

Sarah saves money on her electric bill by setting the thermostat higher during the day. Since she is only home in the evenings and on the weekend, she doesn’t use much electricity during the day and doesn’t want to pay for something she isn’t using.

She needs a plan that will be more flexible so she can move without any added stress and fits her lifestyle.

A fixed-rate plan is probably not the best plan for her.

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Short-term vs. long-term locked-in electric rates

Even if you aren’t planning on living in your home forever, you can still lock in a good price on a fixed-rate plan.

Most REPs offer fixed-rate plans of varying lengths. You can choose three-, six-, or twelve-month plans. Short-term plans can be a great way to give yourself the security of a locked-in rate without a long-term commitment.

Just be careful when choosing the length of your plan.

You don’t want to renew during peak season when costs will be the highest. Summer is the peak season in Texas, so it is usually better to renew during cheaper seasons, such as spring or fall.

There are a few things to consider when comparing short-term and long-term fixed-rate plans:

• Energy cost forecast
• Current electric costs
• Season/month of plan renewal
• How often do you want to shop for a new plan
• What you want to pay

If you take these things into consideration, you might find a plan that meets your needs.

Who benefits from a short-term locked-in electric rate

Short-term fixed-rate plans can be the best option for some people.

Cassie is starting college in the fall and moves into her new apartment at the end of summer. It’s still really hot, and she wants to be comfortable while she gets ready for the school year.

She starts shopping for an electric plan but notices that the month-to-month plan is higher than she wants to pay. She is home a lot since classes haven’t started yet, so she needs to plan that will suit her steady usage.

As she compares rates, she realizes that locking in a short-term fixed rate for just three months will allow her to change her plan in a few months and save money instead of getting stuck at a higher rate all year.

A short-term fixed-rate plan may help Cassie save money in the long run.

Who benefits from a long-term locked-in electric rate

For some people, a long-term fixed-rate plan can give them the security and savings that they need.

David and his family are looking to save money on their electric bill.

The market is great, and the prices are very low.

He and his family want a plan that will let them control their bill by monitoring their electricity usage. He wants to be able to estimate his bill so his family can stay on budget and not be caught off-guard by a high bill.

David wants to lock in the current electric rate and benefit from the low prices for as long as possible. He owns his home and doesn’t plan on any major life changes over the next few years.

A long-term fixed rate might help David enjoy the benefits of low electric prices for the next couple of years.

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Things to consider when shopping for a locked-in electric rate

If you are shopping for a new electricity plan, there are a few things to consider.

Remember that not all plans are great for everyone.

You deserve a plan that meets your unique needs.

Some plans offer low rates, but only for a few months. Others might be great for the length of the plan, but the renewal rate is much higher.

Don’t get stuck with something that doesn’t work for you.

Beware of locked-in “introductory” rates.

You’ve seen the commercials or billboards for unbelievably low rates. It’s almost too good to be true, right?

If it sounds too good to be true, it probably is.

Some plans offer super-low introductory rates, but when you read the fine print, you find out that after a few months, the price goes up, and your savings go out the window.

Other plans might offer that nice, low rate for a while, but when the plan renews, you open your bill to find out that your rate went from 10¢ per kWh to almost 15¢ per kWh.

You end up with a high bill and feel tricked.

Be sure to read the fine print to make sure there aren’t any surprises in your future.

The best time to lock in electric rates

Texas summers are hot.

It feels like a million degrees in the shade, and the only relief comes from the air conditioning vent.

When the heat just won’t stop, and people are using record-setting amounts of electricity, costs are going to be the highest.

Summer is not a good time to lock in your electric rate.

On the other hand, winter is fairly mild in most of Texas. People are using less electricity because they don’t have to keep the heat as high as in other parts of the country.

December through March is the best time to shop for a new fixed-rate plan.

If your bill is at the lowest of the year, it might be a good time to lock in a rate because energy prices are not likely to be lower later in the year.

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How to find the cheapest locked-in electric rates in Texas

You’re wondering, “Should I lock in my electric rate?”

Well, the answer is maybe.

You want a plan and rate that meet your needs and will save you money.

So, that means you just look for the cheapest rate and sign-up, right?

Hold on just a minute.

Cheap is not the same as low-cost.

While the cost of electricity per kilowatt-hour does play a big part in determining your electric bill, it is not the only factor.

You need to consider:

• The length of the plan
• Additional fees and charges
• Rates after renewal
• Charges for canceling or changing the plan

There are hundreds of plans to compare, and you can’t just pick the lowest price without looking at the whole plan.

Looking at every fixed-rate plan from every REP takes time and a really good understanding of contracts and fine print.

You could spend hours or even days shopping for a new fixed-rate electric plan.

Trade in sleep for endless nights of manual research

If you plan to research fixed-rate plans on your own, you could end up stressed out and frustrated.

Having to contact every REP to find out their best rates and the terms of each rate takes a ton of time.

And you have to find a way to record and keep track of your research.

Your free time is too valuable and too limited to spend it comparing electric plans.

Spend 5 minutes with Power Wizard and sleep well knowing you’ve made the best choice

Power Wizard can do all that work for you and find a plan that is right for you in just a matter of minutes.

All you need to do is input a few simple factors such as:

• Zipcode
• Home’s size in square footage
• Home’s age (to determine energy efficiency)
• Historical energy usage (you can even submit your previous electricity bills)
• And more

Power Wizard will compare every available REP and plan in order to save you as much money as possible.

It’s so easy. It’s like magic.