Ever since the deregulation of the energy market, consumers have been given choices for their electricity needs. Not only can they choose their own energy provider, but they can also choose an energy plan that best suits them. Those plans include prepaid plans, variable rate plans, and fixed rate plans.
Prepaid plans are just what they sound like. You pay for your electricity up front, and have a certain amount to use for the upcoming month. Once you reach the limit, your electrical service will get shut off, unless you add more money to your prepaid account. These plans are good for strict budgeting, to keep you from going over your allotted electricity expenditures. These plans unfortunately tend to have higher rates than fixed plans.
Variable Rate Plan:
Variable rate plans offer no contract, so you can switch providers at any time. These month-to-month plans vary in cost each month as they are affected by the market price of electricity. If a natural disaster or production and supply issue occurs, your following month’s bill could be considerably more costly. Conversely, if supply is high and demand is low, you could see your cost plummet, while fixed rate plan users are still paying a higher rate. Since Dallas electricity providers know that you could switch at any time, they try to keep rates for these plans as low as possible.
Fixed Rate Plan:
Fixed plans have a contract that lasts anywhere from three months to three years, sometimes longer. When you sign up for a fixed rate plan, your initial rate is based on the market rate at that time. When you sign the contract, your rate is locked in for the duration of your contract term length. If some disaster befalls energy production, the market rate will go up, but your rate will remain unchanged. Other parts of your rate, like transmission and distribution charges could change, but this is not very common.
Some retail electricity providers (REPs) offer residential and business electricity plans powered by renewable sources. The electricity facts label (EFL) for green plans will tell you what percentage of the electricity used comes from renewable sources. Many green plans use 100% green electricity, but not all of them do.