Comparing Fixed and Variable Electricity Rates in Texas

Comparing Fixed and Variable Electricity Rates in Texas

Texas residents in deregulated markets have a lot of options when it comes to power providers and plans. But not all plans are created equal.

Fixed-rate plans offer stability in energy costs and protect you from market volatility. Learn more about these plans and how to choose the electric companies in texas for your home or business.

Price Stability

You can choose your electricity provider in Texas from various Retail Electric Providers (REPs). This competitive energy market allows consumers to find a plan and provider that meets their needs. This is particularly true when it comes to fixed or variable rates.

With a fixed-rate plan, you will pay the same kWh per kWh as long as you remain in your contract term. This helps protect you from sudden increases in your kWh rates due to supply shortages, wholesale energy prices, extreme weather, and more.

This predictability makes it easier for consumers to create and maintain a budget. They can determine how much money they need to set aside for their monthly energy costs based on their usage rather than being surprised by an unexpectedly high bill. For this reason, many consumers prefer a fixed-rate plan to a variable plan. If you’re looking for a plan with fixed Texas electric rates, compare each supplier’s price and the available options before deciding.


With a fixed-rate plan, you’ll have the security of knowing your energy rates won’t change throughout your contract, typically six months or more. This helps you plan a more predictable budget and avoid any unpleasant billing surprises that might come with market fluctuations.

Texas operates under deregulation, allowing consumers to choose their Retail Electric Providers (REPs). The competition between these providers results in various plan options with different rates and prices.

For some, a variable rate might make more sense. It provides the flexibility to switch plans at any time without incurring any cancellation fees, which is helpful if you want to take advantage of cheaper rates during the winter. However, this also means your rates will shift monthly based on market conditions. This can result in expensive bills during high-demand times, such as summer. Ultimately, it’s up to the consumer to monitor rates closely and assess their needs before choosing an electricity plan.


Many factors exist when shopping for electricity plans and other deregulated Texas cities, including contract arrangements, rates, fees, bill credits, and other perks. With the wide variety of options available, it can take time to determine which plan will serve your needs best.

Many energy providers offer competitive incentive programs to lure new customers and reward existing ones for staying loyal. These incentives can include free energy or gift cards, to name a few ways providers can thank you for your business.

Variable-rate electricity plans, known as month-to-month energy plans, allow you to switch out of your current REP without incurring any cancellation fees. This flexibility may be better for those who prefer to keep their plan, but it is a great option to avoid price spikes during high-demand summer months and save on power bills during low-demand winter months. It is recommended to monitor variable rate plans regularly and select a term length that is long enough to avoid any potential price increases in transmission, distribution, and regulatory fees that are passed through to the customer.

Long-Term Incentives

Deciphering a monthly electricity bill can be difficult for some Texas power customers, especially with fluctuating energy prices. But fixed-rate plans can offer protection from these spikes by offering a set price per kilowatt-hour for the contract’s life, ranging from as little as three months to 60 months or more.

When a plan’s term expires, the electric company will usually notify you and provide options to re-enroll in the same plan or find a new one. However, it’s important to remember that any rate that comes up when you re-enrol is not protected from fluctuations in the market – you could see your price per kilowatt-hour skyrocket without realizing it.

With deregulation, most Texans can shop in the competitive market and choose the best energy provider, rates, and plan for their needs. But with so many options and factors to consider, finding the right solution can be overwhelming.


With a fixed-rate plan, you can more easily create and stick to a budget for your energy expenses. Variable-rate plans have few to no rate safeguards and are prone to significant price increases in the market, which could leave you scrambling for new energy options at the end of your contract term with little to no notice.

With the right plan, you can save money by adjusting your usage habits to align with off-peak rates. Many energy providers offer bill credits for customers using up to a set amount of kWh monthly. This can be a good option if you know that you’ll consistently fall into the provider’s discounted usage bucket.

When the term of your fixed-rate plan expires, your energy provider may contact you to discuss switching you to a variable-rate plan if it makes sense for your household. When this happens, it’s essential to understand your energy needs to find the best plan to meet them. Learn more about the different types of Texas electricity rates and plans available to help you make the most informed decision.

Written by
Cosmo Jarvis

Cosmo Jarvis is a multi-talented artist excelling in various creative realms. As an author, his words paint vivid narratives, capturing hearts with their depth. In music, his melodies resonate, blending genres with finesse, and as an actor, he brings characters to life, infusing each role with authenticity. Jarvis's versatility shines, making him a captivating force in literature, music, and film.

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