Fixed vs Variable Electricity Plans: Which Is Right for You?

When shopping for electricity in Texas, you will encounter two primary plan types: fixed-rate and variable-rate. Understanding the difference is essential to making the right choice for your household.

A fixed-rate plan locks your energy supply rate for the length of your contract, typically 6, 12, or 24 months. Your rate will not change even if wholesale electricity prices spike during a hot summer or a winter storm. This provides budget certainty and protection from market volatility. The tradeoff is an early termination fee (ETF), usually ranging from $100 to $250, if you cancel before your contract ends.

A variable-rate plan has no fixed contract and no ETF. Your rate fluctuates monthly based on wholesale market conditions. This can mean lower bills during mild weather months but significantly higher costs during peak demand periods.

For most Texas households, a fixed-rate plan offers the best combination of predictability and value. Variable plans may suit customers who monitor the market closely or need short-term flexibility during a move.

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