Go Long or Go Short? What's The Best Move When It Comes To Fixed Rates Electric Plans In Texas?

Go Long or Go Short? What’s The Best Move When It Comes To Fixed Rates Electric Plans In Texas?

Brian A.

Brian A.

Energy Advisor

signing-contract

The Texas electricity market today is like many other markets in the United States – high. Unfortunately, due to current economic and political situations, the price of energy is on the rise in the United States and the rest of the World. Here’s what you need to know about Texas electric rate plans and whether to lock in for a longer or shorter period.

 

Fixed Rate Plans: How They Work

 

First, let’s discuss how a fixed electricity rate works. Please reference the illustration below:

chart-of-prices-of-electricity-over-time-from-2022-to-2026

As you can see from the chart above, electricity trades similarly to a stock. Its prices move up and down minute-by-minute and are affected by a multitude of factors.

When an energy supplier wants to offer a fixed price for electricity to a customer, it must pre-purchase this electricity ahead of time. If it does not, the market prices where the supplier buys power could become higher than the customer’s fixed rate and the supplier would lose money.

Since energy suppliers pre-purchase electricity, they also put cancellation charges in their contracts so that customers cannot cancel early if the market prices become lower. This protects the supplier from losing money from owning power that was pre-purchased during a higher market.

What About Contract Lengths?

Energy suppliers will typically offer fixed rate contracts for a 1, 2, or 3-year period to a customer. In some cases, customers can even lock in a fixed electricity rate for a 5-year period of time. The prices of these contracts are directly correlated to the price of the electricity market over that period of time (reference chart above). So, when you are considering a fixed-rate contract, it is important to consider the future outlook on the electricity market. More on this below…

Long Term Contracts

Long-term electricity contracts are best suited for those who think market prices will continue to rise in the future. If you believe that to be true and you are right, then locking in a fixed electricity rate today for a 3-year period or longer, will benefit you in the long run. If and when the future price of electricity rises, you will still pay the rate that you signed up for today. These longer-term contracts are also great for businesses because it allows them to plan budgets multiple years into the future. Are you a commercial customer looking for a fixed electricity rate in Texas? Check out these commercial rates below:

 

Texas Commercial Electricity Plans – All TX Utilities

Best Texas Electricity Rates - Commercial
  1. 48 months

    Utility: AEP Texas Central (TX)

    View Plan Details

    7.05¢

    per kWh
    At 10000 kWH
    Get a Quote
    Plan Name: 48 Month Fixed
    Term: 48 Months
    Product: Electric
    Utility: AEP Texas Central (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

  2. 48 months

    Utility: AEP Texas Central (TX)

    View Plan Details

    7.05¢

    per kWh
    At 20000 kWH
    Get a Quote
    Plan Name: 48 Month Fixed
    Term: 48 Months
    Product: Electric
    Utility: AEP Texas Central (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

  3. 48 months

    Utility: Oncor (TX)

    View Plan Details

    7.09¢

    per kWh
    At 10000 kWH
    Get a Quote
    Plan Name: 48 Month Fixed
    Term: 48 Months
    Product: Electric
    Utility: Oncor (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

  4. 48 months

    Utility: Oncor (TX)

    View Plan Details

    7.09¢

    per kWh
    At 20000 kWH
    Get a Quote
    Plan Name: 48 Month Fixed
    Term: 48 Months
    Product: Electric
    Utility: Oncor (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

  5. 48 months

    Utility: AEP Texas North (TX)

    View Plan Details

    7.12¢

    per kWh
    At 10000 kWH
    Get a Quote
    Plan Name: 48 Month Fixed
    Term: 48 Months
    Product: Electric
    Utility: AEP Texas North (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

  6. 48 months

    Utility: AEP Texas North (TX)

    View Plan Details

    7.12¢

    per kWh
    At 20000 kWH
    Get a Quote
    Plan Name: 48 Month Fixed
    Term: 48 Months
    Product: Electric
    Utility: AEP Texas North (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

  7. 36 months

    Utility: AEP Texas Central (TX)

    View Plan Details

    7.27¢

    per kWh
    At 10000 kWH
    Get a Quote
    Plan Name: 36 Month Fixed
    Term: 36 Months
    Product: Electric
    Utility: AEP Texas Central (TX)
    Supplier: Constellation
    Early Termination Fee: $0
    Plan Description:

    You can obtain important standard information that will allow you to compare this product with other offers. Contact Constellation at 844-6-ENERGY and constellation.com.

 

Short Term Contracts

 

Shorter-term electric contracts are for those who believe market prices will fall in the future. If you think the price of electricity is going to become cheaper at some time in the next year or so, then locking into a long-term, 5-year contract does not make sense for you. If you sign up for a shorter term, such as 1 year, and you are right about prices, when your contract expires, you can then sign up for a lower rate.

Need help deciding what type of contract to sign up for? Contact us today to speak with one of our expert energy advisors and we can guide you through your options.

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