Fall in love with a new energy plan

February 8, 2021   By Caitlin Cosper

Fall in love with a new energy plan

It’s almost Valentine’s Day, so your plans may involve flowers and a nice dinner. But it could be time to show yourself some love with a new energy plan. Whether it’s switching to a plan with a better rate, seasonal perks, or renewable energy, your new electric plan could be the most meaningful gift of the year.

Why should I switch to a new electric plan?

We get it – it can be hard to break up with your current plan or provider. But switching to a new plan could pay off in the long run. The good news? In a deregulated market, you have the power to switch to a new electricity plan up to 14 days before the end of your current contract (or sooner, if you don’t mind paying an early termination fee).

When shopping for an electricity plan, there are a lot of factors to consider. To find the right plan for you – and ensure you aren’t unnecessarily overpaying for electricity – think about a plan’s features, where the energy comes from, and whether you can benefit from switching during a low-demand period of the year.

Rate structures

Perhaps the most confusing part of shopping for a new energy plan is dealing with different types of rate structures. The types of rate structures determine how your energy bill is calculated. So, if your electric plan’s rate structure doesn’t align with your energy consumption habits, you could wind up paying more than you need to. Consider these common types of rate structures:

  • Stable rate – You are charged the same amount for every kilowatt-hour (kWh) you consume. This is a very reliable option because you will be charged a consistent rate based on how much energy you use each month, but you won’t be able to benefit from market lows, or when the price of electricity dips throughout the year.
  • Flat rate – You are charged the same rate no matter how much energy you consume. Your energy provider will calculate your flat rate based on how much energy you normally use, and you will see that one rate on your energy bill each month.
  • Tiered rate – Tiered rates are more confusing. Depending on how much electricity you use, you will fall into a designated rate bucket. So, for example, your provider might charge $90 if you use up to 1,000 kWh but will charge another $90 for the next 1000 kWh used. In this situation, you would be charged the additional $90 for using 1,001 kWh – and you would pay the same amount if you used up to 1,900 kWh.

See how rate structures can be tricky? Depending on how much electricity your household normally consumes, you might be charged more with a tiered rate. Alternatively, a flat rate might cost more than a tiered rate if you fall into a lower rate bucket. It all depends on how much energy you normally consume. The bottom line here is that you should be in a relationship with a plan that matches your energy needs and you should always check a plan’s Electricity Facts Label (EFL) before signing up.

With the SaveOnEnergy marketplace, you can filter for different rate types to quickly find a plan that will work for you. Enter your ZIP code to explore the types of rate structures currently available.

Renewable energy perks

The ongoing climate crisis and growing renewable energy market in Texas has led to many consumers switching to a green electricity plan. But it’s not just an environmental choice – renewable energy plans can have financial perks, too!

Texas leads the U.S. in wind energy and consistently ranks in the top five states for solar power. This means there’s a surplus of inexpensive and environmentally friendly electricity available in the Lone Star State. Most providers have invested in green energy, and many offer plans sourced from clean power sources such as wind or solar.

In the SaveOnEnergy marketplace, you’ll find providers that offer plans sourced 100 percent from renewable energy, including Gexa Energy, Green Mountain Energy, Chariot Energy, and Iberdrola Texas. If you are interested in switching to an electric plan sourced by green energy, enter your ZIP code to explore available options in your area.

Seasonality

Another reason why consumers commonly switch energy plans is to take advantage of seasonal changes in the energy market. Throughout the year, electric rates change based on the market demand and value. This determines what you end up paying each month (depending on your plan type, rate structure, etc.).

The EIA keeps track of the average retail electric rates in Texas. The chart below shows these rates through February 2020 (which is the latest data released by the EIA):

Texas rate chart

Your electricity plan might have worked wonders in the fall but could leave you paying a higher rate in the summer. Normally, there are peak times of the year when rates are higher than normal. This is usually in the hot summer months. But if you switch to a new plan during an off-peak time of year, you could lock in a lower electric rate.

If your current plan isn’t working for you, it may be time to break up. As Valentine’s Day nears, consider treating yourself to a new energy plan. You may find that a different rate structure, green energy plan, or seasonal factor work better for your electricity needs.

If you’re curious about available rates, plans, and providers in your area, enter your ZIP code here.

 

Caitlin Cosper is a writer within the energy and power industry. Born in Georgia, she attended the University of Georgia before earning her master’s in English at the University of North Carolina at Charlotte.

[Dmitry Naumov]/Shutterstock