What time of year has the cheapest electricity rates?

One of the greatest benefits of the deregulated Texas energy market is the ability to choose your own energy provider and your electricity plan. However, a quick search will show you that rates can vary significantly between providers as well as plan types. Where are the cheapest electric rates you ask?

Power Wizard can make the process of comparing your options and all the rates easier. We show you plans that make sense for your needs and feature affordable rates.

There are many factors that determine energy prices, including the time of year. That can leave many customers wondering what time of year has the cheapest electricity rates. Here’s what you need to know.

Time of Year and How it Affects Finding the Cheapest Electric Rates

Like many other goods and services, the cost of electricity fluctuates with supply and demand. When demand increases, rates follow and vice versa. And one of the biggest factors affecting demand in Texas is the time of year.

Electricity Prices in the Fall and Spring Are Better Than Winter and Summer

Generally, electricity demand in Texas is highest in the summer. The sweltering heat has many residents cranking their air conditioners to stay comfortable, usually all at the same time of day. In the cold winter months, many people turn on their heat.

HVAC systems rely on electricity to cool and heat homes. Even the most efficient units can pull quite a bit. As a result of the increased demand on the grid, electricity prices — and rates — go up.

On the other hand, electricity demand tends to be lowest in the fall and spring. The milder weather means most people won’t need to worry about heating or cooling their homes. With less demand, prices fall.

Time of Day and Peak Demand Can Also Impact Energy Costs

The time of year isn’t the only factor that affects demand and the cost of electricity. The time of day plays a role, too. Demand is generally highest when more people are home — which tends to be late afternoons and early evenings — and lowest when they’re sleeping, at work, or school. In other words, electric prices typically increase when most people are active at home and decrease when they’re out.

Where You Live Determines your TDU and Your Rates

Your location can also impact your rates. That’s mostly due to the rates a transmission and distribution utility (TDU) charges for delivering energy. Along with getting electricity from a power generator to your home, a TDU is responsible for maintaining power lines, fixing outages, and reading your meter to determine how many kilowatt-hours you’ve used.

There are five TDUs in the deregulated areas of Texas. However, unlike being able to choose your retail energy provider, you don’t get to choose your electric utility. The one that delivers your electricity depends on the location of your home, and you pay for their service as part of your monthly electricity bill. That cost consists of:

• A fixed charge: Every person in your area pays the same amount on monthly basis for the TDU’s services.
• A variable charge: The TDU also charges a set rate per kilowatt-hour delivered. The more electricity you use, the more you’ll pay for its delivery. Rates change twice a year, and they’re the same for every customer regardless of your energy provider.

How to Combat Price Fluctuations and Get the Cheapest Electric Rates

Rate fluctuations can have a substantial impact on your monthly electric bills. That doesn’t mean you have to be stuck paying high prices for electricity. Here are a few things you can do to avoid falling victim to the energy market:

Review Your Options and Types of Plans Available

In addition to getting to choose an energy provider, energy consumers also get to choose an energy plan. There are several types of energy plans, each of which can affect the rate you pay:

• Fixed-rate plans allow you to lock in your electricity rate for a set period of time. Your rate stays the same even when the price of energy increases (or decreases) with seasonal changes in demand.
• Variable-rate plans feature a rate that can fluctuate month to month based on the whims of the Retail Electric Provider.
• Time of use plans have rates that change based on the time of day. In other words, peak rates occur during periods of high demand, while rates are lower during non-peak times.
• Flat-rate energy plans charge the same price for electricity every month, regardless of your usage.
• Prepaid energy plans require you to pay in advance for the electricity you’ll use in the future. You add funds to your account, and your energy provider deducts the cost for your daily usage.

Note: Not all retail energy providers offer every plan type, nor do they service every area of Texas. Additionally, energy providers can charge different rates for similar plans.

Use an Online Marketplace to Find Cheap Electricity Rates for You

Whether purchasing a plan for the first time or  switching energy providers, comparing your options can be a time-consuming process. Fortunately, you don’t have to do it alone. An online marketplace like Power Wizard can make finding cheap electric rates in Texas a much more pleasant experience.

Power Wizard’s online tools can show you the best cheap electricity rates in Texas within seconds. We use your zip code and service address to customize your results based on your location and your home’s historical energy usage.

Monitor Your Electricity Consumption and Change Your Energy Habits

Even with a great plan and the affordable electric rate, you can still end up paying a lot for electricity based on your consumption habits. For instance, leaving your lights on all day or maintaining a low thermostat setting during the summer can lead to expensive energy bills.

You can maximize the benefits of an energy plan with cheap rates by monitoring your electricity consumption and making changes to become more energy-efficient. A tool like an electricity usage monitor can be helpful here.

Some monitors attach to your power box, allowing you to track your overall energy consumption. Depending on the one you choose, you may even be able to monitor large appliances like your HVAC and refrigerator.

Alternatively, you can use a plug to track the consumption of individual appliances and devices. No matter which type you choose, these monitors can give you a better look at your usage and help you pinpoint ways to improve.

Speaking of ways to improve, here are a few tips that can help you reduce your energy consumption and costs:

• Schedule annual maintenance for your HVAC system.
• Check your air conditioner’s filter monthly and replace it when it’s dirty.
• Replace old, worn-out appliances with more energy-efficient models.
• Ensure your home is properly insulated.
• Alter your thermostat settings a few degrees up (during the summer) or down (during the winter). If you don’t have one yet, consider investing in a programmable or smart thermostat to adjust your settings automatically based on your schedule.
• Turn lights off when you leave a room, or install motion sensor light switches to do this automatically.

Don’t Fall Victim to the Electricity Market

Just because energy rates fluctuate during the year and some energy providers charge higher rates, or tack on additional fees, doesn’t mean you have to suffer expensive energy bills. The freedom to choose your electricity provider and plan is one of the main benefits of Texas’ deregulated energy market. Researching and comparing your options can help you secure the best plan with a low rate, helping you save big on your energy costs.

If you need help narrowing down your energy plan options, Power Wizard is here to help.