Is a variable rate plan a good idea?
Most Texas electricity customers prefer to sign up for fixed rate electricity plans. The primary reason for this is price stability. For the length of the contract, the price stays the same. With variable rate plans, however, price instability can work to a customer’s advantage.
Variable rate plans can give customers significant savings when electricity rates fall. A savvy Houston electricity customer with a variable rate plan can avoid being stuck by buying a fixed rate when prices are high. But once rates bottom out, customers can secure a low fixed price.
No one can be certain what the future holds for electricity rates, but historical Texas electricity rates are a useful guide. Spring and fall usually have the lowest rates of the year. If your Houston electricity contract is about to expire, waiting a few months to sign a new contract may work to your advantage. This year, high demand and low electricity reserve margins will likely make summer electricity rates higher than other times of the year.
Lowest Variable Rate Plans In Houston
Houston retail electricity providers have a wide variety of month-to-month electricity plans available.
| Plan | Avg Rate @ 500 kWh | Avg Rate @ 1,000 kWh | Avg Rate @ 2,000 kWh | |
| First Choice Power | Monthly Freedom Plan | 13.7 cents | 12.7 cents | 12.2 cents |
| Direct Energy | Bright Choice | 13.8 cents | 12.8 cents | 12.3 cents |
| Reliant | Clear Flex Plan | 16.4 cents | 13.8 cents | 13.6 cents |
All three plans have better rates at higher usages. First Choice Power offers the lowest cost plan variable rate plan across all usage levels. Since prices can change monthly, different retail electricity providers sometimes have the best price. Because these are no contract plans, customer are free to switch at the end of each month.
Remember that these plans differ from pre-paid electricity plans. Under variable rate plans, customers pay for electricity after it is consumed. With pre-paid plans, consumers purchase electricity at variable rates before they use it.
Shop Houston Electricity Rates
So here’s your game plan. Compare your current electricity bills to the rates shown for these variable rate plans. If you can get a better rate on a variable rate plan, consider switching. Make sure an early termination fee doesn’t wipe out the potential savings. Next, watch fixed rates as they begin to fall this spring at Texas Electricity Ratings. At that point, you can shop fixed rate electricity plans before Houston electricity rates increase for summer.