How to find an affordable electricity plan to weather the hot Texas summer
As the summer heat rages on, electricity is the key to keep cool, but how do you know what provider or plan to choose?
The hot summer months are typically the busiest time of the year for electricity usage, according to the U.S. Energy Information Administration. Winter is the other season consumers see a sizable spike in usage. But the need for air conditioning in the summer takes the cake.
The Dallas-Fort Worth area will experience its hottest days of the year this week — and, most likely, for the remainder of July. This means air conditioner use will be in full force as families aim to keep themselves and their homes cool.
Texas has a wealth of energy providers, offering various rates and packages. But going through the options could be a tough task to land the best deal.
What should I know before choosing an electricity plan?
Knowing what you need before looking for an electricity provider is an important step in finding the best plan. Here are a few tips from the Public Utility Commission of Texas:
How much will I pay per kilowatt hour based on 1,000 kWh of average monthly use?
Does the rate include the transmission and distribution charges, electricity cost, monthly customer charges and any other recurring fees?
Will this be a fixed, variable or indexed rate offer?
How long is the contract for?
If a deposit is required, how much so?
What payment options do I have?
What happens when the contract expires?
What happens if I miss a payment?
Will I be penalized for breaking the contract?
Can I sell my excess renewable electricity to your company?
Where can I compare and find electric plans near me?
Since 2002, Texans have had the choice to choose what electric company to use.
This was created when the Texas electricity market became deregulated — meaning residents and businesses could choose their own plans and provider, instead of being under the thumb of one entity. Due to deregulation, there are a plethora of electric providers to pick from.
The Power to Choose website, owned by the Public Utility Commission of Texas, is a site for finding electricity. The website narrows down electricity plans and gives options to residents depending on their needs:
Enter in your zip code on the website and click “view results”.
You can narrow down the search by comparing pricing, contract length and company rating.
Shop and compare the best rates for you.
What’s the difference between a fixed and variable rate?
Something you might come across in your search for an electricity plan will be deciding between a fixed or variable rate plan.
A fixed-rate is essentially the set price that you will pay for during the duration of the contract. This doesn’t mean your electric bill will be the same price every month, under this plan it’s still charged per kilowatt hour used, according to Compare Power.
This plan has its own advantages and disadvantages, for example: if electric market prices rise you will not be subjected to increased costs, but if prices fall, it will not lower your bill since the contract is locked in.
Fixed-rate plans come with contracts that last anywhere from 6, 12, 24 or even 36 months. If you wanted to break your contract it would likely come with a fee from the electric company.
A variable-rate plan varies in cost every month depending on the rise and fall of electricity costs — such as the cost energy providers are paying to buy electricity from generators, according to Compare Power.
Variable plans can be enticing to consumers looking for cheaper power options, but again, it all varies on how the pendulum swings. Most consumers are switched to a variable-rate by energy providers when their fixed-rate contract expires.
Many consumers are set on a fixed-rate plan and that’s what many electricity experts recommend.
How does Texas’ electricity compare to other states?
Texas is the largest consumer and producer of energy in the country.
The industrial sector leads the way among energy consumers in Texas, including chemical manufacturing and petroleum plants. This sector accounts for more than half of the state’s energy consumption, according to the U.S. Energy Information Administration.
As for electricity, Texas is its largest producer and consumer in the U.S.
The largest percentage of electricity use in Texas is attributed to the residential sector, where three in five houses use electricity as their primary heating source.
Natural gas-fired plants contributed for more than half of the state’s electricity generated in 2021. Wind and coal followed right behind as electricity generators, along with solar, hydro, bio-mass and nuclear power.
Why does Texas have its own power grid?
Texas is the only state in the country to have its own state-run power grid, which is overseen by the Electric Reliability Council of Texas (ERCOT).
The Lone Star State has always had its own power grid, even going back to World War II when it was called the Texas Interconnected System. However, the state-run agency that oversees the grid, ERCOT, was founded in 1970 in the wake of a major blackout in the Northeast in 1965.
Ever since, ERCOT has maintained the Texas power grid and remains beyond the jurisdiction of the Federal Energy Commission.
ERCOT actually manages only around 75% of the land area in Texas and about 90% of its residents. El Paso, the northern part of the panhandle and a handful of eastern counties are not covered by ERCOT.
