With low housing costs, great job oportunities, and the sweetest tea in the country, it’s no question why people are moving to Texas.

If you’re one of them, you’re probably excited about your new home, and less thrilled about the many expenses that come with it.

One of those expenses is energy. Fortunately, all it takes is a bit of research to get a great deal.

You can choose between two basic plan types: month-to-month, and fixed. Read on to learn about the differences and discover which type of plan will work best for you.

Variable vs. Fixed Rate Energy Contracts

A variable month-to-month plan can give you the lowest possible rate when prices dip. You’ll also have the freedom to shop around. On the other hand, the price can swing wildly. While it may drop in the fall, it will probably soar in the summer. The uncertainty can make it difficult for businesses to budget for energy.

You’ll typically pay less with a fixed rate plan than a variable one, when you average costs out over a year. The only time a variable rate is recommended is when you’re absolutely sure you’ll only be at a particular location for a month or two. Even then, you can typically lock in a month-long fixed rate.

Comparing Energy Plans Over a Three-Month Period

Exactly how much more will a month-to-month rate cost you? Let’s break down it down over a period of three months.


In the scenario above, going month-to-month with no termination fee costs more than locking in a three-month contract ($122 vs. $97), making the fixed-rate plan the better option.

Lock In Your Electric Rate for the Best Deal

You may be understandably apprehensive about committing yourself to a long-term contract. But keep in mind that a rollover or month-to-month plan is only the best option for those who need temporary power and want to avoid termination fees. If you’re looking for price security, locking in a low fixed rate is the way to go.

Avoid Termination Fees

Fixed rate plans may involve a termination fee if you move or end your contract early. Your supplier usually won’t charge you, however, if you roll the contract over to your new residence. You could also transfer the service to the new homeowner. Most suppliers will also waive the fee if you move to a state they don’t serve.

Understand Transmission & Distribution Charges

Your energy rate reflects two different services – the electricity you use, and the cost of delivering that energy to your home. Bear in mind that no matter who your supplier is or what type of contract you have, you’ll pay for both.

When you’re shopping around, be sure to check the average price (the total amount you’ll pay each billing cycle), and not just the energy price (for power only). Also look at the electricity facts label (EFL) to spot any other charges. For example, some plans may charge additional fees only when you hit a certain usage threshold. You may actually do better with one of these plans if you don’t use a lot of energy, even if it charges a higher base rate.

Can I “go green?”

We like that you’re thinking about the future; we are too! You can buy anywhere from 5%-100% of your power from renewable sources, including solar, wind, biomass, and more. Be sure to check out the pricing information on your EFL.

What do I do next?

While sites like make it quick and easy to find great energy plans, some contracts tack on usage fees. It’s all about how these websites present their rates. A super low rate isn’t necessarily everything it seems. Always check the EFL to find out how the supplier will bill you, and look for any for terms and conditions that may apply.