Why spending a little more for energy now might make sense

May 3, 2018   By The SOE Team

Why spending a little more for energy now might make sense

Low prices trump all when it comes to energy, right? Well, not always. Sometimes paying a bit more to a retail electricity provider this month means you’re set up for larger savings later this year – or next.

If that seems counterintuitive, it’s because it is. Most of us constantly look for the cheaper price. But there’s really more to picking a competitive energy plan than just looking at the cents/kilowatt hour and going for the lowest.

Factors to consider when picking an energy plan

Of course, price must be a factor when comparing energy plans on SaveOnEnergy® or any marketplace. It just shouldn’t be the only factor. Here’s why:

Term Lives Matter. Typically, the lowest-price Texas electricity plans pair with the shortest terms – six months, in many cases. That’s fine if you’re willing to shop again in six months and find another low rate.

But here’s what happens with most of us: We get notification at least 30 days before that six-month plan runs out. We make plans to shop again before it happens. We forget those plans. And the retail electricity provider – which gave us full notice of what it would do – enrolls us at its default electricity rate.

What does default mean? In many cases, it means higher.

This is one reason why it often makes sense to sign up for a 24- or 36-month plan. That way, you have insurance – both against you forgetting to shop again for at least that long and for price spikes such as the ones predicted in Texas this summer and next.

Everyone Else Is Doing It. Your mom probably told you not to do something because everyone else is doing it. But when it comes to choosing the best electricity supplier, your mom might be … wrong. Recommendations from friends and experts – including SaveOnEnergy.com – should play a role in picking a provider.

You don’t want a provider that’s not stable, and you don’t want one that has poor customer service. Study recommendations and reviews before jumping to the cheapest provider – there might be a reason its prices are so low.

So Long, Fare Well. Unless you’re purchasing a variable-rate plan subject to month-to-month market fluctuations – and this is a bad idea right now considering the likely Texas price spikes – you’re committing to a plan for a set length of time.

Which is great until life gets in the way and you move to a new home for a new job or for some other reason. While most plans have cancellation fees for terminating a contract early, the Public Utility Commission of Texas specifies that contracts for electricity service are limited to service for a specific location and that you’re off the hook for early termination fees if you provide a forwarding address and, if requested, proof that you no longer live at the location in the contract.

All that said, before you sign up for a contract, it’s a good idea to ask what happens if you move.

Price is, and should be, an important consideration when you choose an electricity plan. But it shouldn’t be the only consideration – not for the savvy Texas electricity consumer. Paying a little more now can generate big financial benefits in the future if the price spike predictions come true.