A fixed rate electricity plan is just what it sounds like—a plan that allows you to buy electricity at a fixed rate. This rate is locked in for a certain amount of time, usually between 12 and 24 months*. Even if the costs to generate electricity go up, customers on fixed rate electricity plans have peace of mind of knowing their rate will stay the same. With natural gas prices at recent historical lows, locking in on a 12- or 24-month fixed rate electricity plan can save you money on your electricity costs in the long run.
If you are a homeowner or a long-term renter, you might like the stability and peace-of-mind of a fixed-rate plan. Fixed rate plans usually have a cancellation fee if you end your plan before the contract is up. Here’s why: When you sign up for the plan, your residential electric company buys power for you for the length of the term at the guaranteed rate (this is how your rate can be guaranteed for the length of the contract). If you cancel early, your provider still has to pay for the power it purchased for you. Cancellation fees help cover these costs.
You might like fixed plans if you:
Think energy prices are going to rise
Like the peace of mind of locking in a rate
Want protection from rising energy costs
You might not like fixed plans if you:
Don’t like to make long-term commitments with service providers
Like the freedom of month-to-month pricing.
Think energy prices are going to fall
*Our lawyers make us put this next part: The only circumstances in which this price can change during the contract term are to reflect actual changes in TDSP charges; changes to the ERCOT or TRE administrative fees charged to loads; or changes resulting from federal, state or local laws or regulatory actions that impose new or modified fees or costs on First Choice Power that are outside our control. Any pricing change made in these limited circumstances may be made without prior notice.