Since energy deregulation in 2002, many Texas residents have had the opportunity to choose their own electricity provider. Instead of relying on their local utility to provide them with electricity, most Texas residents have many competitive providers to choose from, allowing them to shop around for the perfect electricity plan for their homes and lifestyles.
After electricity deregulation, more and more electricity providers have entered the market with various plans and products. Direct Energy and their affiliated brands: Bounce Energy , First Choice Power, and CPL Retail Energy offer a multitude of electricity plans and benefits so customers can find the electricity plan that best fits their needs.
While it’s great to have so many options, it can be difficult and confusing to choose an electricity plan. With choices like fixed-rate, variable-rate, and prepaid plans, as well as varying price options, term lengths, and rewards, shopping for an electricity plan can be an overwhelming task.
To help simplify the process of shopping for electricity plans, read this guide to choosing the right plan for you.
Check your contract.
Before you switch providers, you’ll need to determine whether you’re under a contract with your current provider, and if so, how long you have left on your contract. You can usually find this information by looking at your electricity bill or by calling your energy provider. If you choose to switch before your contract is up, your current contract may outline an early termination fee. However, according to the Public Utility Commission of Texas, customers can switch providers without paying an early termination fee if they schedule the switch no earlier than 14 days before their current plan expires. When you change providers, you’ll be able to indicate the date you want the switch to occur.
Look at your usage.
Look at your electricity bill or log into your online account manager to determine your average electricity usage. Prices and energy costs can vary based on usage, so knowing how much energy you use each month will help you determine the best price point for your home.
Many electricity plans offer rewards like free electricity and refer-a-friend credits, which can yield some attractive savings. If having a reward option is important to you, consider the rewards offered and determine which ones are a good fit and would be the biggest benefit to you.
Determine your preferred term length.
There are many different options for term lengths in the Texas energy market. Different term lengths often have different price points, so if you’re more flexible with the length of your contract, you could get a cheaper rate. Contracts with shorter term lengths are great if you prefer to avoid a long-term commitment while longer contracts usually provide the benefit of longer-term price stability.
Decide your plan type.
The three main plan types you’ll see are fixed-rate, variable-rate and prepaid:
- Fixed-Rate plan: With a fixed-rate plan, you’ll lock in an electricity rate for the term of your contract. The most common term lengths are six ,12 , and 24 months. Most fixed-rate plans charge customers an early termination fee if they switch providers before their contract expires, but your electricity rate will stay stable through the seasons. On the other hand, you may miss out on lower bills from a downturn in energy prices. If the price stability of a fixed-rate plan seems like the best option for you, lock in your electricity rate with Direct Energy’sFree Weekends plan, which provides free electricity on weekends from 6 p.m. on Friday to 11:59 p.m. on Sunday.
- Variable-rate plan:A variable-rate plan means the rate you pay for your electricity may fluctuate based on the market price of energy. Energy price depends on many factors, like weather, demand, fuel prices, the distribution system and the market. Variable-rate plans are flexible because you are not locked into a contract; however, you’ll pay a higher price in high-demand seasons like summer. A variable-rate plan might be ideal for you if you like to shop around and keep an eye on prices. Without a contract holding you back, you can easily change to a variable-rate plan like Bright Choice, a month-to-month plan from Direct Energy.
- Prepaid plan: Prepaid plans provide electricity service on a “pay-as-you-go” basis. You pay for your electricity before you use it, allowing you to budget exactly how much you want to spend on electricity. Because there are no credit checks, deposits or long-term contracts, a prepaid electricity plan is an attractive option for many. First Choice Power’s Power-To-Go plans allow you to easily place money on your account and receive alerts on your mobile device or via email telling you how much electricity you’re using and how much remains on your balance.
The Public Utility Commission (PUC) has a website to help you find and compare all the electricity plans and providers in your area. Visit www.powertochoose.org or call 866-PWR-4-TEX (1-866-797-4839). You can filter your options based on your usage, your preferred plan type, and several other factors. Once you’ve chosen the retail electricity provider that best suits your needs, you can sign up directly from their website.
Read the EFL.
The Electricity Facts Label, or EFL, will help you determine the price point a certain plan will offer based on your usage. This document will also provide other details of the plan.
If you’re thinking about looking for a better electricity plan for you, shop and compare retail electricity providers in your area. Our pick is Direct Energy. With plans like Free Weekends and Direct-Your-Plan, an electricity plan tailor-made to your lifestyle, you can find the perfect option for you. Direct Energy customers also benefit from rewards programs like Refer-A-Friend, energy saving insights from Direct Your Energy and access to home services and home protection plans. Visit www.directenergy.com/texas to find your perfect Texas electricity plan.