What Is Fixed-Rate Electricity?
Fixed-rate electricity plans allow consumers to select a plan and price that is appealing to them and lock it in over a set period of time.
Here’s how it works:
Let’s say you sign up for a 24-month plan at a rate of 9 cents per kWh and during the cooler months in Texas you use only 900 kWh per month, then your energy charge will be $81 for those months.
During the hotter months, when more electricity is required to cool your home, if you use 1200 kWh per month at the same rate, then your monthly energy charge will be $108 during these months.
This energy charge, along with applicable taxes and delivery charges, will be included in your monthly bill.
How Long Do You Have to Lock In a Contract With a Fixed-Rate Electricity Plan?
On average, fixed-rate plans range from 12-36 months. However, some companies offer as little as 3 months of fixed-rate electricity, while others offer as much as 60 months.
But, it can be risky going with a plan that locks you into a fixed rate for either a very short or long period of time.
When energy prices are at their lowest, some companies will offer a short-term fixed-rate electricity plan.
Gexa Energy’s 100% Green 12-36 month fixed-rate electricity plans cater to savvy consumers who are aware that locking in for too short or too long a period of time can end up being costly in the long run.
3 Advantages of Fixed-Rate Electricity
#1: Controlling Your Monthly Spending
One of the biggest advantages of fixed-rate electricity plans is the ability to budget and control monthly spending.
As long as you are tracking your monthly usage you’ll be able to easily predict what your monthly bill will be, limiting energy charge surprises.
With a variable rate, unpredictable price fluctuations could happen at any time as a result of supply shortages, extreme weather, and more.
#2: Protect Yourself From Rising Prices
Another great advantage to a fixed-rate electricity plan is that you’ll never have to worry about your kWh rate increasing during the term of your contract.
Locking in a rate means that even in the most expensive months for electricity, such as the summer months in Texas, your rate remains the same.
While you may use more electricity during these months, you’ll still be able to predict what your energy charges will be without the need to watch the daily rise and fall of variable rates.
#3: Usually Less Expensive Than Variable-Rate Electricity
While variable-rate electricity plans may seem to be less expensive at first glance, it’s important to know that many companies will advertise the lowest possible “starting rate” to entice consumers to choose that plan.During your contract term, variable rate energy charges could go up or down subject to changing market conditions.
A fixed-rate electricity plan may seem like a higher kWh rate but in reality, the fixed price plans offer peace of mind by locking in a fixed rate for a set period of time.
3 Disadvantages of Fixed-Rate Electricity
#1: Locked-In Pricing
Locking in one rate for 12-36 months may not be for everyone. If the energy market is experiencing falling prices, then a variable plan might save you more money in the short term.
However, variable plans could work best for consumers who actively keep up with the energy market and prefer to stay on the lookout for the best prices.
If this sounds like you, then Gexa Energy’s 100% Green Flex Plan could be your ideal choice for electricity.
But, if keeping up with energy markets sounds like a daunting task, or if you live in an area where there are many seasonal changes, a fixed-rate electricity plan could be the way to go.
#2: Early Termination Fees
Fixed-rate electricity plans can often include early termination fees, which means if the energy market prices are on the decline and you want to take advantage, you may have to pay a cancellation fee.
The Gexa Flex Plan allows you to switch plans or providers without having to pay a termination fee.
Having this flexibility may be appealing to you if you move out of service zones frequently and don’t want to lock yourself into a plan that will cost you money upon cancellation.
Gexa Energy offers a month-to-month, no commitment, variable-rate plan with no fees to switch. Plus, all Gexa plans are 100% green.
#3: Contract Renewals
With fixed-rate electricity plans, it’s a good idea to keep track of when your contract ends.
To avoid an increase in your electricity costs, it’s a good idea to start comparing plans approximately 60 days before your plan renewal so that you can be prepared to switch plans, or providers, as needed. You can switch providers within the 14 days prior to your contract expiration date with no early termination fee.
Contact Gexa Energy to learn more.
How Do You Know if a Fixed-Rate Electricity Plan Is Best for You?
After weighing the pros and cons of fixed-rate electricity vs. other types of plans, it’s time to decide what plan is best for you.
There is no right or wrong answer, but here are a few things to consider before you lock in a fixed-rate electricity plan:
Do you live in a part of Texas that has seasonal weather fluctuations that could cause a big jump in your monthly spending? Having a fixed-rate plan will allow you to lock in a consistent rate per kWh even if there’s a spike in energy rates on the grid.
You live on a fixed income and a spike in the price per kWh might make it difficult for you to run your air conditioning on a hot day. Having a fixed-rate plan will give you peace of mind knowing that the price per kWh will stay the same.
Consumers looking for predictability and price protection should consider fixed-rate electricity.
How Do You Choose a Fixed-Rate Electricity Plan?
Choosing a fixed-rate electricity plan doesn’t have to be complicated.
Here are the steps to find the right plan for your needs:
Find out which plans are available in your zip code
Compare plans to find one that fits your usage and budget
Look at the electricity facts label to make sure you understand all associated fees
Determine which fixed-rate contract length is right for you
Some fixed-rate electricity plans may also offer perks, such as free smart thermostats to help you regulate your energy usage even more.
How Do You Read Your Fixed-Rate Electricity Bill?
Fixed-rate electricity bills may have some standard costs, such as:
Total From Last Bill – The total amount due from the prior billing statement.
Payment Received – The payments Gexa Energy has received up to the statement date.
Balance Forward – The amount owed from the prior billing statement (if none is owed, this will appear as “$0.00”)
Gexa Energy and TDU Charges - Totals of the amounts in the Gexa Energy Current Charges and TDU Current Charges sections
Sales Tax (if applicable) – Sales tax collected by authorized taxing authorities, such as the state, cities, and special purpose districts (may not apply in all locations or to all customers)
Miscellaneous Gross Receipts Tax Reimbursement (abbreviated as “Gross Receipts Reimb.”, if applicable) – A fee assessed to recover the miscellaneous gross receipts tax imposed on retail electric providers operating in an incorporated city or town having a population of more than 1,000 (The State of Texas imposes a Gross Receipts Tax (GRT) on utility companies, using a rate based on the location of the customer’s meter. Gexa Energy and your TDU pass this amount through to their customers for reimbursement. Customers who are located in an unincorporated area or in a city with a population of less than 1000 are exempt from this reimbursement fee.)
PUC Assessment – A fee assessed to recover the statutory fee for administering the Public Utility Regulatory Act (The PUCT imposes an Assessment Fee on utility companies for each of their customers’ Service Addresses. Gexa Energy and TDUs pass this amount through to their customers for reimbursement.)
Amount Due – Total amount due to Gexa Energy; derived from adding the Balance Forward to the Total Current Charges, taxes, and fees
Knowing exactly what to expect on your fixed-rate electricity bill will ensure that you’ve properly budgeted.
How Much Does a Fixed-Rate Electricity Plan Cost?
Fixed-rate electricity plans vary in cost from plan to plan and supplier to supplier. Below are examples of the fixed-rate electricity plans that could be offered by Gexa Energy in Houston, Texas.
Gexa EveryDay | EveryNight 12, 24 Fixed-Rate Electricity Plans
Available in both 12 and 24-month contracts, Gexa Energy’s EveryDay | EveryNight fixed-rate electricity plan includes:
Gexa Energy Saver 12, 24 Fixed-Rate Electricity Plans**
Available in both 12 and 24-month contracts, the Gexa Energy Saver fixed-rate electricity plan includes:
Up to 2 Free SensiTM Touch smart thermostats and professional installation - up to $550 value
Locked-in low price for 12 or 24 months
Offer only available to single-family homeowners
100% Green residential plans
Gexa Energy Saver 36 Fixed-Rate Electricity Plan**
Available in a 36-month contract, the Gexa Energy Saver 36 fixed-rate electricity plan includes:
Up to 2 Free SensiTM Touch smart thermostats and installation - up to $550 value
Locked-in low price for 36 months
Offer only available to single-family homeowners
100% Green residential plans
Gexa Energy’s Fixed-Rate Electricity Plans in Texas Are 100% Happiness Guaranteed: Make the Switch Today*
As one of the fastest-growing retail electricity providers in Texas, Gexa Energy is proud to serve both residential and commercial customers with affordable electricity plans.
All of our residential plans are 100% green to the consumer and backed by our Happiness Guarantee. *
If a fixed-rate electricity plan sounds right for you, then contact Gexa Energy or shop available plans and pricing for your area.
