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Fixed Electricity Rates, Are They Worth It? [Pros & Cons]

what is a fixed rate for electricity

Before signing up for an energy plan, you’ll need to ensure that the one you picked suits your electricity usage pattern and budget. With different electricity plans to choose from, selecting the one that works for you can be challenging. 

Fixed-rate electricity is the more popular choice among power consumers owing to its many benefits. However, it will still be in your best interest to know more about other available plans and ascertain if a fixed-rate energy plan is indeed the best option. 

Let’s dig into the details of what fixed-rate electricity plans are. 

What is a Fixed-Rate Energy Plan?

With fixed-rate electricity plans, you pay a specified price per kilowatt hour every month throughout your contract’s term. That means even if energy prices in the market change, your electricity rate won’t be affected. When you enroll in a fixed-rate plan, you can easily estimate your energy costs without having to monitor if electricity market prices drop or surge. 

Fixed-rate electricity plans are the more popular energy plans because they’re more beneficial. Still, the plan type also has some drawbacks.  We’ll examine both the pros and cons to help you decide which is the better plan type for you.

Benefits of Fixed Rate Electricity

You can expect to enjoy some perks when you opt for a fixed-rate plan. Some of these perks are the following. 

Predictable electricity bill

You don’t have to keep checking market prices to determine how much you’ll pay per kilowatt hour with fixed-rate electricity. That’s because, with fixed-price electricity plans, your rate stays the same no matter how much the prices fluctuate in the energy market. As such, you won’t have to worry about price surges during the summer and winter months. Moreover, knowing your expected monthly bill also lets you budget around your electricity costs. 

The chance to get the cheapest power rates

If you sign up for a fixed-rate electricity plan when the per kilowatt-hour rates are low, you’ll get charged with that rate for the duration of your contract. This means timing is essential. If you’re serious about saving on your electricity costs, you can switch energy providers when power rates are on a downward trend. 

Get loyalty rewards

The deregulation of the electricity market allowed the entry of numerous power companies into the industry. Due to stiff competition, each energy provider seeks to entice customers using various promotional incentives. Many of these providers reward loyal customers, some with free electricity, others with gift cards, or other freebies. 

Drawbacks of Fixed Rate Electricity 

In analyzing which electricity plan type to choose, you’ll also need to consider the disadvantages each plan has. Let’s now check the downsides of choosing a fixed rate plan. 

No savings from lower prices in the market

Fixed-rate electricity plans lock in your per kWh rate until your contract expires. That means you won’t enjoy any savings on your utility costs because you’ll pay the same rate even if electricity prices in the market drop. 

Possible charges for early cancellation

Your utility company may charge early cancellation fees if you switch away before your contract ends. Take note that some electric companies impose hefty fees for breaking your contract.  

Can’t easily switch away from your power provider

Fixed-rate plans won’t let you switch easily to another electricity provider. You’ll have to wait for your contract to end or pay an early cancellation fee. So if you’re not satisfied with the service of your current power company, you either grin and bear it or pay a fee to switch to a new one.

Fixed-Rate Energy Rates

Before you shop for a fixed-rate electricity plan, we recommend that you first determine your energy usage. This will let you compare how much you’re currently paying against what you’ll need to shell out per month with a new fixed-rate plan.  

Here are some of the best Texas electricity companies and the fixed-rate electricity plans they offer. Check which one will help you save money on your monthly bill

Electricity Plan Name and Electric CompanyEnergy Plan LengthEnergy Plan Rate
You Got This"! 24 (First Choice Power)24 months$0.129 per kWh
Clear Deal 12 (First Choice Power)12 months$0.199 per kWh
Power of One 24 (New Power Texas)24 months$0.238 per kWh
Power of One 12 (New Power Texas)12 months$0.270 per kWh
Smart Value 12 Online (Cirro Energy)12 months$0.236 per kWh
Texas Fixed 36 (Pulse Power)36 months$0.155 per kWh
Texas Green 12 (Pulse Power)12 months$0.193 per kWh
Gexa Eco Saver Plus 12 (Gexa Energy)12 months$0.136 per kWh
Gexa Saver Deluxe 12 (Gexa Energy)12 months$0.139 per kWh
Maxx Saver Select 24 (4Change Energy)24 months$0.125 per kWh
Maxx Saver Select 12 (4Change Energy)12 months$0.141 per kWh
Frontier Super Value 12 (Frontier Utilities)12 months$0.138 per kWh
Frontier NHF 12+ (Frontier Utilities)12 months$0.187 per kWh
Premier 12 - No Deposit & No Credit Check (Payless Power)12 months$0.218 per kWh
Simple 6 - No Deposit & No Credit Check (Payless Power)6 months$0.229 per kWh
Value Plus 24 (Discount Power)24 months$0.217 per kWh
Value Plus 12 (Discount Power)12 months$0.227 per kWh
Live Brighter 1K+ 24 (Direct Energy)24 months$0.237 per kWh
Live Brighter 18 (Direct Energy)18 months$0.250 per kWh
Go Local Solar 12 Preferred (Green Mountain Energy)12 months$0.251 per kWh
Basic Power 18 plan (Reliant Energy)18 months$0.237 per kWh
Truly Free Nights 100% Solar 12 plan (Reliant Energy)12 months$0.247 per kWh
Amigo Web Plan 12 (Amigo Energy)12 months$0.195 per kWh
Nights Free Plan 12 (Amigo Energy)12 months$0.209 per kWh
Energy Wise 24 (Just Energy)24 months$0.179 per kWh
Energy Wise 12 (Just Energy)12 months$0.199 per kWh
Tara Web 24 (Tara Energy)24 months$0.175 per kWh
Tara Web 12 (Tara Energy)12 months$0.195 per kWh
36 Month Usage Bill Credit (Constellation Energy)36 months$0.159 per kWh
12 Month Usage Bill Credit (Constellation Energy)12 months$0.189 per kWh

What is a Variable-Rate Energy Plan?

This plan type is a direct contrast to a fixed-rate electricity plan. While you pay a specified rate with a fixed-rate energy plan, the per kWh price of your electricity fluctuates from one month to the next with a variable-rate plan.  

Market prices dictate the electricity rates in a variable-rate plan, so if the per kWh price of electricity surges, so will your energy costs. That’s one reason why many consumers opt for fixed-rate electricity plans.  

Like fixed-rate plans, variable-rate plans come with some pros and cons. If you intend to switch to variable-rate electricity, it’s best to recognize the benefits and drawbacks of the plan type. 

Benefits of Variable Rate Electricity Plans

While fixed-rate plans are more popular among consumers because of the benefits that come with them, variable-rate electricity plans can also be ideal for you. Here are some reasons to opt for these electricity plans. 

Saving on your electric bill is possible

Although fixed-rate plans offer price certainty because you pay a fixed rate until your contract ends, that advantage can turn into a disadvantage when power prices in the market dip. With variable-rate plans, you’ll get lower rates when there’s a downtrend in electricity market prices. How much you save will depend on your electric usage.

It’s easier to switch electricity providers

Plans with fixed rates often have a lock-in period, meaning that you can’t terminate your contract without incurring some charges. With variable-rate plans, you won’t need to pay a cancellation fee. As such, you can quickly switch to a new provider with lower rates if you’re not happy with your current provider’s service. 

The Drawbacks of Variable Rate Electricity Plans

While it’s possible to get a better deal if you opt for variable-rate electricity, you should also know what makes power consumers wary of signing up for this plan type. 

Changing rates in the market can mean higher power prices

Electricity prices in the market fluctuate constantly. When the price of natural gas and other fuels surges, you’ll end up paying more for your electricity consumption

Unpredictable electricity expenses

Even if you know how much energy you use each month, you’ll still have trouble predicting your power expenses if you’re in a variable-rate plan. That’s due to the volatility of electricity prices. So, while plans with fixed rates let you easily budget your power expenses, variable-rate plans make it hard to get a firm grip on your electricity costs. 

Difference Between Fixed-Rate & Variable Rate?

The major difference between fixed-rate and variable-rate electricity is price certainty. Plans with fixed rates make it easier to budget your electricity expenses because your per kWh rate won’t change for the duration of your contract.  

Setting aside a budget for your monthly power expenses can be difficult with variable-rate plans because the per kWh rate follows the price of electricity on the market.  

Other Energy Plans

Aside from the fixed-rate and variable-rate plans, you have a choice among multiple energy plans offered by the different power providers. The good news is that you can often get a great price for your electricity with these options, which will help reduce your power bill. Check each one to find the best energy plan for your home. 

No-Deposit Plans

Most power companies review your credit history before they provide electricity service. In most instances, your credit score will determine how much you need to put down as a deposit. No-deposit plans let you avoid the hassles of a credit check and a long-term contract. These plan types work best for those who don’t have an ideal credit score or have no credit history. What’s more, no-deposit plans often offer easy sign-ups and let you get same-day service. 

Business Energy Plans

Business owners have much higher power usage compared to residential customers. Power providers consider that and create plans to help business enterprises manage their energy costs. The rates of these plans suit the power usage of commercial users and allow them to remain competitive despite rising power prices.  

Green Energy Plans

Green energy plans use electricity coming from self-replenishing or renewable sources. These include hydropower, biomass, solar, and wind energy. Opting for one of these plans gives you a chance to lower your carbon footprint and help protect the environment. Moreover, some of these plans come with lower rates than electricity sourced from traditional power suppliers, such as oil, coal, and natural gas. 

Top Energy Companies

There are over 60 electric providers in Texas. You can take your pick from any of these companies for your electricity needs. Whatever the type of plan or contract length you want, you’re likely to find one from these providers. 

Here are some of the most popular power companies in the Lone Star State. 

Electricity Company Contact Number
Amigo Energy866-526-7192
4Change Energy855-550-6663
Champion Energy800-692-4776
Chariot Energy855-524-2746
Cirro Energy800-692-4776
Constellation Energy877-997-9995
Discount Power855-236-1309
Direct Energy866-550-1550
Energy Texas855-461-1129
Engie Resources866-693-6443
First Choice Power855-534-3881
Frontier Utilities866-763-5084
Gexa Energy855-639-8210
Green Mountain Energy866-785-4668
Just Energy866-587-8674 
New Power Texas866-448-2720
Payless Power855-854-8482
Pulse Power888-853-4522
Reliant Energy855-887-2194
Rhythm Energy877-649-0354
Tara Energy866-217-5179
TriEagle Energy877-933-2453
TXU Energy855-752-0086
Veteran Energy888-367-7470

Switching Power Providers

Energy deregulation makes it easy for you to switch power providers. Around 60 days before your contract with your electricity company expires, you may want to start shopping for a new plan. Here’s how you can easily transition to another energy company. 

  1. Get the ball rolling by reviewing the rates of other power providers. Each of their plans has a corresponding per kWh rate. 
  2. Review the plan details. Pay attention to the rates, contract lengths, and other charges associated with each energy plan. 
  3. Check the status of your current electricity plan. Switching before your contract’s end might involve paying early termination fees. 
  4. Contact your chosen provider and sign up. Your new power company will take care of the other details of the switch.  


Is it Better to Get Fixed or Variable Electricity?

Which is better between fixed or variable electricity depends mainly on your needs and lifestyle. For example, if you don’t have an ideal credit score or move around a lot, variable-rate plans may suit you best. On the other hand, if you want predictable monthly power bills, then fixed-rate electricity will be a better option. 

Is it Worth Changing Energy Suppliers Now?

Timing plays a role in whether you’ll get a good deal when it comes to your electricity needs. You should change suppliers when power prices are lowest, provided your contract with your current provider is about to expire. If you want to switch suppliers before your agreement ends, compare the cost of cancellation fees vis-a-vis the new plan’s lower rates. 

How Many kWh Per Day is Normal?

The average residential power consumption in the US falls at 10,715 kWh a year. That translates into about 893 kWh per month or 29 kWh a day. Meanwhile, the average kWh usage of commercial consumers is 6,066 kWh a month or 202 kWh per day.

Does Unplugging Things Save Electricity?

It does. Electronics or devices that remain plugged into the socket continue drawing power. The amount may be small but the costs add up over time. All those gadgets sucking up electricity day in and day out will impact your electricity bill so unplugging those power-draining electronics can help save you several kilowatt-hours a year.


Fixed electricity rates are a popular choice among power customers owing to the benefits these plans offer. Fortunately, most energy companies that operate in states with deregulated electricity offer excellent fixed-rate plans.

However, this type of plan type isn’t for everyone. Those who move a lot or don’t want long-term contracts can opt for variable-rate plans. Although the per kWh rate for variable-rate electricity plans can vary each month, they can also let consumers save on their bills when the price of electricity in the market dips.

Which plan type is for you? Review your usage level and pattern to determine whether a fixed-rate plan or one with variable rates will give you greater savings on your bill.

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