If you live in Texas, then you can likely take advantage of a special kind of energy market that forces electricity providers to compete for your business. If that sounds like a good thing, well, it is!
One of the biggest benefits from these electric companies competing with each other is the different energy plans they offer to attract your attention. Texas energy plans come in many shapes and sizes, and we’re here to walk you through them — and to answer all of your questions.
Why Is the Texas Energy Market Special?
First things first, let’s talk about why the electricity market in Texas is different from energy markets in most other states.
In 1999, the Texas legislature passed a bill to deregulate the state’s energy market. When this bill was put into action in 2002, it meant that Texas energy companies had to start competing for their share of the electricity market.
This is still true today, with 85% of the Texas power market deregulated, including Houston and Dallas. This means that the vast majority of Texas residents have the power to choose where they get their electricity from — and the power to choose their Texas energy plan as well.
What Should Texans Consider as They Shop for Electricity?
Every great Texas energy plan is going to have three components worth paying attention to: the terms of the electricity plan itself, the electricity rate that’s being offered as part of the electricity plan, and the electricity provider offering the electricity plan.
To find the perfect Texas energy plan for you and your family (or your business), you’ll need to be satisfied with all three of those variables. We’ll take a look at each one of them in turn, to explain everything you need to know to make the most of your power to choose in Texas.
First: What Makes for a Great Texas Energy Plan?
For most Americans, the idea of being able to choose an electricity plan likely sounds strange. People who live in a regulated energy market lack options when it comes to electricity.
But in the Lone Star State — where everything is bigger — electricity customers have a wide variety of Texas energy plans to choose from. Here are some of the more popular energy plan incentives you’re likely to see if you’re shopping for electricity:
Free Nights
Free nights are one of the popular Texas energy plan offers you’re likely to see, and it’s not hard to figure out why. These plans won’t charge you for the energy you use after a certain time of day. If that sounds good to you — and why wouldn’t it? — then you’ll want to keep an eye out for Texas electricity plans that include a free nights provision.
Free Weekends
Free weekends is similar in concept to free nights: Your electricity provider simply won’t charge you for your electricity usage over the weekend. If you notice that your energy usage tends to go up on the weekends, then a plan that offers free weekends is a great way to help lower your monthly energy bill.
Renewable Energy Plans
Renewable energy plans are a great option for electricity customers who want to reduce their impact on the environment. Green energy plans are typically offered at a premium, and that premium is typically used to purchase renewable energy credits or carbon offsets.
If you’re concerned about your carbon footprint and climate change, then a green energy plan may be the right Texas energy plan for you.
Prepaid Plans
With prepaid plans, you’re able to pay for your electricity bill in advance. These plans often won’t require a credit check, so if you have low credit or no credit, a prepaid plan is a good option to keep in mind.
An Important Note About Contract Length
When you sign up for a Texas energy plan, you’re signing a contract for a specific length of time. Depending on your personal situation, you might prefer a longer or shorter contract length.
If you don’t expect to move anytime soon and you like the plan you’ve selected, a longer contract might be in your best interest. After all, there’s no guarantee that at the end of your contract that you’ll be able to find the same great Texas energy plan again, so you might as well extend it for as long as possible.
However, if you know that you’re going to be moving soon — say, for example, if you’re starting school in a different county in a year — then you won’t want to sign that longer contract.
This is because most electricity plans include early termination fees. You’re always free to cancel your current Texas energy plan and sign up for a new one, but if you cancel your plan before the contract is up, you’ll likely have to pay an early termination fee.
Second: What Makes for a Great Texas Electricity Rate?
On the surface, this question might seem like it has a simple answer — that the best Texas electricity rate is the lowest Texas electricity rate. After all, the lower your energy rate, the lower your electricity bill is at the end of the month, right?
As it turns out, it’s slightly more complicated than that. Texas energy plans can include different rate plans. Here are the three most common rate plans you’re likely to come across:
Fixed Rate Plans
Fixed rate plans are the simplest to wrap your head around: For the duration of your contract, you pay a single price per kilowatt of electricity that you use.
One of the benefits of a fixed rate plan is that you know what you’re getting upfront. There’s no risk of your electricity rate rising with a fixed rate plan, and for a lot of people that certainty means a lot less stress. And, because you know how much your electricity usage is going to cost ahead of time, you can better plan and budget for your electricity bill, based on your past energy usage.
Variable Rate Plans
Unlike fixed rate plans, variable rate plans don’t charge a single price for your electricity. Instead, your electricity rate under a variable rate plan is tied to market conditions. If power supply is lower than normal, or if energy demand is higher than usual, then you’re likely going to pay a higher price for your electricity during that time under a variable rate plan.
However, if supply is up or demand is down, then at those times your electricity rate will be lower than normal. As you can see, there’s more risk inherent in a variable rate plan when compared to a fixed rate plan.
That said, if market conditions are right, it’s possible to save money on your electricity bill with a variable rate plan.
Learn more about fixed-rate vs. variable-rate plans.
Indexed Rate Plans
Indexed rate plans are similar to variable rate plans, with a twist. Instead of the electricity rate being tied directly to the ups and downs of supply and demand in the energy market, indexed rate plans tie the price for power to a benchmark price in the energy market.
For example, you could have an indexed rate that is tied to the benchmark price of natural gas. If the benchmark price of natural gas rises, you’d notice an increase in your monthly electricity bill; if natural gas prices drop, so too would your electricity rate.
These rate plans aren’t easy for the average customer to understand, but if you’re familiar with the ins and outs of energy markets, then an indexed rate plan might be the right choice for you.
Third: What Makes for a Great Texas Electricity Provider?
source
Thanks to deregulation, the state of Texas has more than 100 retail electricity providers (sometimes abbreviated as REPs). It goes without saying that these energy providers are not all created equal, so here are some ways to tell these different Texas electricity providers apart.
Start by considering how long the energy provider has been in business. In general, a long track record is a positive, since it suggests that a Texas electricity company has the experience necessary to provide reliable electricity service to its customers.
Read online reviews of the energy provider, too. These can be a good place to get an idea of the kinds of electricity service and customer service that you might experience if you choose their Texas energy plan.
Finally, talk to your friends and neighbors about which Texas electricity company they’ve chosen, and whether they’re happy with that choice. Nothing beats a personal recommendation from someone you trust.
If you’d like a head start on telling the many Texas retail electricity providers apart, here are the three companies you should really know: Tara Energy, Just Energy, and Amigo Energy all have extensive experience providing customers with reliable power and responsive customer service. You can’t go wrong if you choose one of these Texas electricity companies.
How Do I Shop for the Perfect Texas Electricity Plan?
Now that you know all of the ins and outs of your Texas energy plan options, it’s time to figure out how to shop for electricity. Thankfully, in Texas, this is an easy process.
Your first step should be to go to the website PowertoChoose.org. This is an unbiased website run by the Public Utility Commission of Texas. Once you enter in your ZIP code, it will generate a list of the different electricity companies in your area, along with the different Texas energy plans they offer and their best electricity rates.
You’ll be able to compare all of this information on one page, which makes shopping for electricity convenient.
If you want to learn more, look up the Electricity Facts Label for the Texas power company you’re considering. The Electricity Facts Label — also set up by the Public Utility Commission of Texas — is similar to the nutritional label on food. It provides a quick snapshot of all of the relevant information you need to make an informed decision about a Texas energy plan, and it allows you to make apples-to-apples comparisons between companies.
As you’re shopping for the best electricity plan, be sure to pay attention to the electricity prices on offer, the different kinds of rate plans, and any potential cancellation fees.
You’re Ready to Find Your Perfect Texas Energy Plan
We’ve learned why Texas residents have so many choices when it comes to their electricity, and we’ve also gone over the wide variety of Texas energy plans on offer. Along the way we’ve made sure to cover the FAQs about these topics.
Finding the perfect Texas energy plan is more than just looking for the cheapest electricity rate: It’s about matching your needs with the right electricity provider, the right electricity rate, and the right plan.
Energy Plans That Work for You
Find the plan that fits your life, not the other way around.
Now it’s time for you to find the right plan for your home or business. If you have any further questions about shopping for electricity in Texas, or if you want to learn more about a variety of other energy-related topics, be sure to check out the Tara Energy blog.
Brought to you by taranergy.com
All images licensed from Adobe Stock.
Featured image
