A fixed-rate electricity plan, as the name suggests, is an electricity plan that enables you to purchase electricity at a constant rate. The rate remains the same for a certain duration of time, normally 24 to 36 months. Even if the energy rates, distribution, or product cost goes up – the rate will remain the same. Another thing that you need to note about the fixed-rate electricity plan is that they attract a cancellation fee for early termination of the contract.
The reason for the cancellation fee is because when you subscribe for the fixed-rate electricity plan, the electric company purchases power for you for the period you signed for. When you terminate the contract early, the electric company will still have to pay for the power it bought for you. The cancellation fee, therefore, caters for these costs.
Fixed-rate electricity plans are the most favorable plans in Texas as they are predictable, convenient, and secure. They are predictable in the sense that, no matter what happens in the energy market, the rates remain the same. It is not susceptible to market forces. They are also convenient because you don’t need to track or monitor usage as is the case with variable-rate plans. Lastly and most importantly, fixed-rate electricity plans are completely secure because they have a constant rate and therefore you don’t need to worry about shocking bills or unexpected changes in electricity rate. In short, your electricity rate is completely dependent on your consumption rate.
Who is it meant for?
Fixed-rate plans are best suited for those customers who for one reason or another, think that energy prices are going to spike or, consumers who love the peace of mind that comes with fixed electricity plans. It is also the right plan for individuals who want a sense of security from the unpredictable energy cost. It however might not be ideal for individuals who don’t want long-term commitments, prefer the month-to-month payment option, and those who believe that the energy rates are going to drop.
What are the benefits of fixed-rate electricity plans?
There are many benefits of choosing fixed-rate electricity plans and they include:
- No unexpected disconnections; The beauty of fixed-rate electricity plans is that you are in control of your bill. It gives you the choice of choosing how much you want to spend on electricity in a month, and therefore, you don’t need to be concerned about a runaway electric bill or unexpected disconnections. Indeed, with this type of electricity plan, you are truly your own boss.
- Fixed payment schedule; One of the challenges that come with some energy plans, is the uncertainty of when next you’ll be making your payment. You see, you might have planned to pay at the end of every month, but due to hidden fees and changing rates, your credit ends before the scheduled time. With a fixed prepaid plan, you only make your payment once in a billing cycle, as long as you’ve calculated your consumption rate correctly.
- Predictable pricing; a fixed-rate electricity plan is predictable. Since the rate remains constant, the only thing that you need to concentrate on is your consumption rate. Once you know your consumption rate, you can easily predict what your next bill will be.
How to identify the best fixed-rate electricity plan in Texas
There are more than 50 electric companies that supply electricity to the residents of Texas, all have different plans with different rates. These plans have varied terms, requirements, and offer different benefits. Some of these electric plans have attractive offers that make them look like a good deal but later you realize that they are not what they appear to be. This, therefore, makes the task of identifying the best fixed-rate electricity plan a bit challenging.
However, here are some of the things that you need to be aware of when choosing a fixed-rate electricity plan.
Know your consumption rate
To identify the best electricity plan, the first thing you need to know before anything else is your electricity usage rate. Knowing your consumption rate will enable you to make an informed decision when choosing the right fixed electricity plan. You can find out about your electricity usage rate from your previous electricity bills or meter reading. All you need to do to average your three months electricity from your old electricity bills to get a rough estimate of your consumption rate. Some electricity providers offer bill credit for certain consumption levels, tiered rates, or a base charge for minimum usage. It’s only knowing your usage rate that you can make a decision on any of the above mentioned options.
Contract duration
Fixed-rate electricity plans have different durations ranging from 12 months to 36 months. When choosing a long-term contract you need to be sure the rates being offered are fair, true, and don’t have other hidden charges. This is important because most long-term contracts usually have a cancellation fee. Most electricity consumers prefer short term contracts like 6 months or 12 months as they give a bit more flexibility just in case there is a positive change in electricity prices.
Prepaid electricity plans
A prepaid electricity plan allows customers to pay in advance for electricity use, similar to gym memberships or a streaming service. Payless Power, one of the top retail electricity providers in Texas, offers two prepaid power plans: a fixed-rate plan and a variable rate plan.
Payless Power’s Premier 12 plan is a simple, straightforward plan: no credit checks, no deposit, and a fixed rate for the 12-month contract. The minimal connection fee isn’t a pricey deposit like those required by other electric companies, but an affordable upfront payment that goes directly toward the cost of electricity.
How to shop for the right fixed-rate plan
There are several websites that you can use to compare rates and eventually identify the right fixed-rate electricity plan for you. All you need to do is to enter your zip code.
Some have a calculator where you enter your estimated monthly electricity usage rate, and it calculates your estimated monthly bill. Note that these websites only help you to identify companies with the best electricity rates in the market, but you need to look beyond the rates. And to do that, you will have to study the whole package particularly, their terms and conditions.
When is the right time to shop for a fixed-rate plan
It is advisable to start looking for a better deal 30 to 45 days before your current contract expires. This gives you enough time to compare, consult, and identify the best deal that perfectly suits your needs. You can choose the start date to begin as soon as your current contract expires. It is best to have your new rate tied up as soon as your old plan expires.
If you let your contract run out, your electricity provider is likely to place you under the default, variable month-to-month plan. With this kind of plan, you can pay as much as 50 to 80 percent more than what you would have paid had you selected a fixed-rate plan. Therefore if you already are at a default rate; what are you still waiting for? Start shopping now!
Flat rate electricity plans
Flat rate electricity plans are a new type of electricity rates that involves paying a constant bill every month for as long as the contract is valid. This might sound similar to fixed rate electricity plans but they are not. The main difference between the two is that, unlike the fixed-rate plans, flat-rate electricity plans have a constant electricity bill and not a constant rate. What is fixed in fixed-rate plans are the electricity rates, what is fixed in flat-rate plans is the electricity bill.
You might be thinking that it’s a good deal – scrub that, perfect deal. Well, not really. The truth is that flat-rate electricity plans benefit the retailer/supplier more than it does the consumer. What you pay as a flat-rate fee is more or less what you pay (when you are on a variable plan) during the high peak period experienced mostly in the summer period. What most customers see is the constant price, and not the long term implication. They seem to forget that they pay this rate for only 4 months in a year for those under the variable month-to-month electricity plan. To cut the story short, flat-rate electricity plans are way more expensive in the long run than both the month to month and the fixed rate electricity plans.
Who has the cheapest fixed-rate electric plan in Texas?
Make sure you’re comparing apples to apples when finding the best fixed-rate electric plan. Research if the plan is prepaid, postpaid, or relies on gimmicks that may conceal hidden costs.
If you are looking for a fixed-rate electric plan in Texas, then Payless Power’s Premier 12 prepaid plan is a leading, hassle-free plan for Texas residents. The competitive, guaranteed rate and short contract length, plus no deposit and low-cost early termination fee, make Payless Power’s fixed-rate plan one of the best on the market.
Fixed-rate electric plans help consumers avoid high summer electricity bills and put the power back in consumers’ hands. You can lower your costs by adjusting your usage, plus pay in advance on a timeline that suits other household budget needs.
