Which flat-rate electricity plan can save you thousands each year?

How to find the best electricity plans in Houston

Do you ever look at your electricity bill and feel like the numbers fluctuate too much from month to month? Last month, it wasn’t a big deal, but this month, your electric bill is so high you might have to cut back on your streaming services to pay for it, and what’s the point of even having electricity if you can’t stream the latest comedy special on Netflix?

It’s inconvenient. It’s impossible to plan for. And what is up with the hidden fees and price spikes? Does it have to be that hard to find out what types of flat-rate electricity plans are available in Houston?

Power Wizard makes it as easy as clicking “Next Episode.” 

Our Shopping Tool can find the perfect flat-rate electricity plan for you to enjoy. In fact, you’ll probably enjoy it almost as much as you enjoy re-watching your favorite shows. 

What are you waiting for? Don’t watch your electricity bill go up again!

Click on a section to skip directly to it:

Why it’s important to understand the different types of electricity plans

The price you pay on your electricity bill varies GREATLY, depending on the type of plan you choose.

There are four main types of plans to consider: fixed-rate, flat-rate, indexed rate, and variable rate (we go into detail on these below).

Once you understand the major differences, you’ll get a better idea of which plan makes sense for you. BUT, there’s still a lot more research you need to do before you’re ready to choose the BEST plan.

For example, to find the best flat-rate electricity in Houston, you’d have to research all the available flat rates, create a spreadsheet to compare them all, read all their specifications, etc.

Why waste all this time when you can find the BEST electricity rate within seconds?

Power Wizard can save you hundreds each month – without any effort or hassle on your part!

We’ll manage your entire account for you from start to finish! You’ll always be on the best plan because we constantly monitor the market for you. Plus, you’ll receive a savings report every month, so you can see how much you’re saving – in real-time.

With Power Wizard, you never have to worry about overpaying on electricity again.

Scroll down to learn more about the four main types of electricity plans, to determine which is best for you.

What Type of Flat-Rate Electricity Plans are Available in Houston?

Houston has limitless options for homes, shops, restaurants, and entertainment.

But did you know the options for electricity plans are almost as limitless?

Houston’s electricity plans are as diverse as its population.

If you haven’t shopped around for an individualized electricity plan, you may be overpaying.

One common electricity plan in Houston is a flat-rate plan, but these can be really tricky to navigate.

This guide will teach you about flat-rate electricity plans in Houston and help you discover if this plan is the best option for you.

What Does “Flat-Rate” Electricity Plan” mean?

The first thing you do to find the best electricity rates in Houston is a quick internet search.

The results of your search read like a technical manual: long, confusing, filled with terms and words that don’t make sense.

Fixed-rate plans, flat-rate plans, indexed rates, and variable rates. What do these mean and how do they affect your electricity bills?

And what is the difference between fixed-rate and flat-rate plans? What are indexed rates and variable rates?

Don’t pull your hair out trying to decipher each term. Just keep reading, we will explain each type of electricity plan below.

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How Does it Work?

A flat-rate electricity plan allows customers to pay the same amount each month regardless of energy usage. The promise of this type of plan is no unexpected energy bills and the ability to budget a set amount of money each month.

Sounds perfect, right?

Maybe not.

There are several factors to consider before signing up.

A flat-rate electricity plan may cost you $150 a month for 12 months.

This means in the hot, humid Houston summers you might be paying less, but in the mild winters, you are most likely overpaying for electricity.

We will compare flat-rate billing vs fixed-rate billing later.

The Other Types of Electricity Plans in Houston

In addition to flat-rate plans, there are two other types of common electricity plans in Houston.

These include variable-rate plans and indexed-rate plans.

Variable Electricity Plans

A variable-rate plan fluctuates based on the cost of wholesale electricity. These plans do not lock you into a fixed rate.

When energy costs are lower, your rate will be lower.

When costs are higher, like the smoldering summers in Houston, rates skyrocket to meet demands.

But what do high temperatures have to do with a variable-rate plan?

As you crank up the air conditioner you use more energy creating more of a demand for the commodity.

Increased demand increases costs.

On a variable-rate electricity plan, rates may be .07 cents in cooler months but rates can double or even triple during the heat of summer. Share

Variable-rates plans can leave you, the consumer, with extremely high energy bills.

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Indexed Electricity Plans

Indexed electricity plans are like stocks. The price fluctuates as market values rise and fall.

If you find the stock market volatile and confusing you will feel the same way about indexed electricity plans.

This type of electricity plan is based on the wholesale price of electricity and the amount of electricity used.

Here are the two things that make these plans so intriguing to customers:

• No contracts
• Seasonally low rates

Here is the catch: Wholesale prices can change every 15 minutes.

In order to get the most savings from an indexed electricity plan, you must perform the following steps:

1. Know the real-time electricity prices every 15 minutes
2. Adjust your energy usage: use less electricity when the price is high and more energy when the price is low
3. Now repeat steps one and two every 15 minutes of every day

Unless you have hours of free time to spend tracking energy costs and your usage an indexed plan will not deliver the savings it promises.

Is a Flat-Rate Plan in Houston the Best For Me?

Let’s compare a flat-rate plan vs a fixed-rate plan:

David saves around $41.00 per month in the summer but spends an extra $100 a month in the winter.

Over a three-month period David will spend an extra $300 in the winter but only save a total of $124 in the summer.

Flat-rate plans are attractive because they give the illusion of enormous savings when energy usage is highest.

But remember those “savings” don’t always equal extra money in your pocket.

Power Wizard constantly monitors fixed-rate electricity. We provide a Monthly Savings Flash to show the daily usage and costs plus your overall savings.

You will always know how much extra money is going into your pocket.

Benefits of Fixed-Rate Electricity Plans in Texas

Some Retail Electric Providers (REP) purchase energy in bulk at the average market price, then pass this rate on to their customers. This is a fixed-rate electricity plan.

Fixed-rate plans lock in a kWh rate for a specific period of time no matter the season or amount of energy used. The rate per kWh used remains the same.

Don’t Get an Outrageous Energy Bill in the Summer

Practically everything in your home uses electricity:

TVs, electronics, laptops, dishwashers, air conditioners, lights, kitchen appliances, phone chargers, wireless routers, smart speakers, we could go on but you get the idea.

The bulk of the energy usage in Texas homes comes from the air conditioner. It is the MVP of home appliances!.

On average, an AC unit uses 3000-5000 watts of energy per day.

Average summer temperatures in Houston are middle to high 90’s. Add in the usual 70-80% humidity and now it feels like 105 outside.

The extremely hot weather doesn’t just drive up the temperatures.

It drives up demand which drives up energy wholesale costs.

This past summer some Texans with indexed electricity plans paid nearly $100 a day for energy usage!

Houston residents with fixed-rate electricity plans don’t have to worry about outrageous energy bills.

Fixed rates are locked in and not subjected to market fluctuation.

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Problems with Fixed-Rate Electricity Plans in Houston, Texas

Fixed-rate electricity plans in Texas seem like the obvious choice. They offer several benefits:

• Stable rates
• No surprise bills
• Budget-friendly

Are fixed-rate electricity plans too good to be true?

Continue reading to learn what other factors should be considered when choosing a fixed-rate electricity plan in Houston:

Hidden Fees

Have you ever taken a close look at your electricity bill?

Have you seen any of these weird charges on your flat-rate electricity bill in Houston?

• Energy efficiency recovery charge
• Franchise fee charge
• Rate case expense charge

You glance at the confusing fees, not sure what they are.

You see a $2.00 fee here, a $1.50 fee there. It may not seem like a lot separately but they can increase your electricity bill by $20.00 or more when added up.

What are these fees and why are they are showing up on your electric bill?

Hidden fees.

These are the fees tacked on by your electricity provider, the state and the federal government.

These fees are charged in addition to the fixed-rate per kWh.

Cancellation Costs

Imagine under your current electricity plan contract you pay 9.1¢ per kWh. You find a plan that offers a 7.2¢ per kWh rate.

Before you make the switch be sure to check the Terms of Service contract. You may be subjected to a cancellation fee.

Fixed-rate electricity plans require you to sign a contract in order to lock in the rate. We will talk more about contract lengths below.

These plans allow you to pay a consistent rate but will hit you with huge cancellation fees if you terminate the contract early.

If you are under contract with your current electricity provider, you may still be able to get a better rate.

Power Wizard factors in cancellation fees when searching for the best available rate plans for you.

Length of Commitment

Lengths of commitment vary from company to company but typically range from 12-months, 24-months, or in some cases 36-months periods.

Before you sign a contract read the fine print

• Find the exact length of the required commitment
• Find the cost of cancellation for terminating the contract early

The “Best” Plan in Houston Will be Different for Every Person

Understanding electricity plan options is great, but you want to know “What is the cheapest electricity plan in Houston?”

Energy usage is unique to each household so there is no such thing as a one size fits all plan!

These factors must be considered:

• The square footage of your home
• The age of your home
• Your energy usage
• Current kWh rates
• Available electricity plans

If you review and calculate these factors it will take you hours. In the end, you still may not be able to figure out which plan is the cheapest.

There is a way to find the best electricity plan for you and still keep your sanity: Wizard uses these factors to build your home’s unique electricity usage profile. Then we plug it into our streamlined proprietary technology to scan hundreds of available plans.

We examine each plan to find the best available plan for you.

Ready to get started finding the best plan for you? Put your zip code into our Shopping Tool and let our unbiased algorithm take care of the rest.

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Cheapest Electric Company in Houston with Flat-Rate

Texas has over 160 retail electric providers, many of which advertise cheap flat-rate plans.

But just because it is the “cheapest” plan does not mean it is the best plan for you.

Electricity Rates Houston

Finding the cheapest electricity plan is easy, you just look for the plan with the lowest kWh rate, right?

Not exactly.

Some plans may advertise the cheapest kWh rate at 7.1¢ per kWh but require a monthly usage of 1000 kWh per month.

If you live alone in a 500 sq ft apartment, you may not reach 1000 kWh per month.

The fine print in the Terms of Service contract you signed states if the required usage is not met the rate will increase to .15 cents per kWh.

If you picked the “cheapest” rate your costs will double. Your bill may be more than a plan with a higher rate but no usage requirements.

Power Wizard considers all aspects of each plan including rates and usage requirements to find the best plan for your individual electricity needs.

How Do Companies Set Electricity Rates in Houston?

Retail Electric Providers purchase electricity in large chunks from the companies that generate it.

The price that a REP pays depends largely on supply and demand.

Wait! REPs don’t generate electricity?

No, the majority of energy consumed in the US is generated by fossil fuels, nuclear, biomass, geothermal, and solar thermal energy.

REPs are like buyers and sellers of energy, the middle man. They buy energy from companies that generate it, then sell it to you.

The rates of energy can change every 15 minutes.

REPs look at several factors:

• Energy markets
• Trends in energy usage
• Weather patterns.

They purchase electricity at the lowest possible rate. Then sell it to their customers while still making a profit.

For a deeper dive into how Retail Electric Providers (REP) calculate rates check out this blog.

Is Wholesale Electricity in Houston the Same as Fixed-Rate Electricity?

Not at all!

Wholesale electricity prices change dramatically based on supply and demand. Which is often drastically affected by the weather, market trends, and usage patterns.

Wholesale rates fluctuate so much it is difficult to accurately budget monthly electric bills when using these plans.

Wholesale electricity may be cheaper than fixed-rate plans when demand is low. But as demand increases wholesale rates can easily double or triple compared to the cost of fixed-rate plans.

What Company Has the Best Electricity Rate in Houston?

There are nearly 60 individual electricity providers in Houston alone. Each provider offers dozens of plans.

Searching through the combination of providers and plans seems daunting. You just want to know what company has the best electricity rate in Houston.

The answer is not black and white. Here’s why:

Your brother, John, tells you he gets a great rate with his electricity provider. You pick the same provider and plan. But you soon discover you are paying double the price John pays.

How is this possible? John lives in a new 3,000 sq ft home. He has a fixed-rate plan with an electricity provider that offers free energy on nights and weekends.

This is the best plan for him because the majority of his energy usage occurs on the weekends and at night when he and his family are at home.

Your 2,000 sq ft house was built 10 years ago. You work nights and weekends so the majority of your energy usage occurs during the week.

Your electricity bill costs more because:

Your home is probably not as energy efficient as your brothers

You are not taking advantage of the free electricity times

Why are we using this example?

To show you that the best electricity plan for your family members, neighbors, and friends may NOT be the best electricity plan for you.

Your electricity plan should be as individual and unique as you are!

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How Do You Compare Electricity Prices in Houston?

To compare electricity prices in Houston on your own you will need:

• A list of REP (160+) in Texas
• A detailed list of the over 2,000 electricity plans available
• Your unique electricity profile
• Endless hours
• Endless hours

Price it Out By Researching Each Company

To price rates for each company you will need:

• Superb excel skills
• Wicked math skills
• Tissues to wipe away the frustrated tears

Did you remember to factor in each company’s special offers, perks, and contract terms?

It doesn’t have to be hard to find the best plan for your individual electricity needs.

Save time, headaches, and tears by letting Power Wizard do the work for you.

Let the Work be Completed For You

Power Wizard uses our technology to scan hundreds of energy rates and plans to match you with the best one. We consider the fine print, the hidden fees, and the set rate before choosing the right plan for you. Our process is automated and effortless on your part. You can relax knowing we are constantly monitoring the market and your electricity needs to ensure you are always on the best available plan for you. Getting started with Power Wizard is as simple as clicking the Shopping Tool and plugging in your zip code.

We will take care of the rest.

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Power Wizard
20455 State Highway 249, Suite 200, Houston, TX 77070, Houston, TX, 77070
(713) 322-8533