Electricity 101

How to Pick the Right Electricity Plan

Gexa Energy
April 26, 2023
minutes read
Gexa Energy
Publication Date:
October 20, 2023
Last updated:
March 8, 2024

Whether you’re new to Texas or looking to switch to a more suitable plan, having an electricity plan in place is vital to ensure uninterrupted service. However, choosing a plan can seem daunting. From confusion about comparing plans to difficulties understanding terms and conditions, the process can be fraught with challenges.

In this guide, you’ll learn how to choose an electricity plan that aligns with your needs. With the right information, setting up electricity in your home can be a breeze.  

Let’s explore how to choose the best electricity plan.


Before You Begin: Essential Information

Before you start your search, you need to have a few pieces of necessary information.  

  1. Average Monthly Electricity Usage: Understand your usual household electricity consumption patterns. Previous electricity bills will have this information. It helps you choose a plan tailored to your usage and avoid overpaying.
  1. Current Plan Details: If switching providers or plans, be aware of your existing plan's terms, prices, and expiration date. It can influence your decision and save potential early termination fees. Additionally, if you have felt frustrated with your current plan in any way, this is a good time to find a new plan that works better for you.  
  1. Types of Electricity Needed: Determine whether your appliances are electric-only, or if some require natural gas.

Types of Electricity Plans to Consider

When learning how to choose the best electricity plan for your household, it’s important to understand the various types of plans available. Here is an overview of some of the most common types of electricity plans:

  1. Fixed-Rate Electricity Plans: This type of plan locks in your electricity price for a set term. It's beneficial when you expect the prices to rise or prefer stability in your monthly bills. If you're wondering, “What is a fixed-rate electricity plan?”—it's a plan where the price doesn't change based on market conditions. Fixed-rate plans provide stability and predictability, allowing you to budget and plan your energy expenses without surprises. It is important to note that fixed-rate electricity plans may have cancellation fees if you decide to switch or terminate the contract before the period ends.
  1. Variable Rate Plans: Unlike fixed plans, variable rate plans fluctuate depending on market conditions. It could be cheaper some months but more expensive during high-demand periods. While it can be beneficial if electricity prices go down, it can also be risky as prices may increase unexpectedly. It is important for consumers to carefully consider their energy usage and budget before choosing a variable-rate electricity plan.
  1. 12-Month Electricity Plans: One of the most common plans, it locks in a fixed price for a year. This is ideal for those who don't want frequent changes and value predictable monthly bills. This can provide peace of mind and stability, especially if you are on a budget.
  1. Night-Free Electricity Plans: A night-free electricity plan is a type of electricity plan where customers are offered free electricity usage during specific hours at night. This plan is usually offered by retail electric provider to incentivize customers to shift their energy usage to off-peak hours, which helps to balance the load on the power grid.  This type of plan is beneficial for households that use more electricity during nighttime hours. You can significantly save on your electric bill if timed correctly. It is important for customers to carefully review the terms and conditions of such plans to understand the specific time window during which the free electricity is applicable and any additional charges that may apply during other hours.
  1. Prepaid Electricity Plans: With a prepaid electricity plan, you pay upfront, and it operates much like a pay-as-you-go phone. You’ll typically purchase a certain amount of kilowatt-hours (kWh). It's useful for those who want to avoid deposits or credit checks. With this plan, you can monitor your energy consumption more closely and have greater control over your monthly bills. Once you have used up your prepaid kWh, you will need to purchase more credits to continue using electricity. It can be a convenient option for budgeting and managing your energy usage effectively.
  1. Month-to-Month Plans: These plans offer ultimate flexibility without a long-term commitment but can have fluctuating prices. They typically have variable prices that are subject to market conditions, so it's important to regularly review and compare offers. Month-to-month plans are beneficial for those who are uncertain about their electricity usage or are unsure about their long-term plans in Texas. However, it's essential to carefully read the terms and conditions to understand any potential fees or penalties associated with these plans.

How to Choose an Electricity Plan: Terms to Understand

  1. Contract Length: Contracts can range from a month-to-month basis to several years. While longer contracts offer price stability, they might have hefty termination fees. A 12-month electricity plan is quite common since that’s the typical length of a home lease, but it’s important to consider what works for you. For example, if you’re on a month-to-month basis at your current home, you might not want to lock yourself into a 2-year contract.  
  1. Renewable vs. Non-Renewable: Decide if you want a portion or all of your electricity to come from renewable sources. Renewable electricity plans in Texas are becoming increasingly popular as people are looking for ways to reduce their carbon footprint and support clean energy sources. Texas is blessed with vast renewable resources such as wind and solar power.  
    Many electricity providers in Texas offer renewable electricity plans. In fact, all Gexa Energy electricity plans for the home are 100% green.*
  1. Fees: Understand all potential fees, including early termination, monthly minimums, and deposits.

Questions to Ask Yourself

  1. How much electricity do I use monthly, especially during peak times?
  1. What is my monthly budget for electricity?  
  1. Do I prefer stability or potential savings with some price fluctuation?
  1. Am I okay with a long-term commitment, or do I need flexibility?
  1. How important is renewable energy to me? Do I need EV charging? Do I have solar panels?
  1. Can I shift my major electricity usage to nighttime to benefit from night-free plans?
  1. Am I comfortable with a prepaid system, or prefer post-paid?

Electricity Plan Comparison: Making the Right Choice

Before making a final choice, it's crucial to conduct a thorough electricity plan comparison. The Texas electricity plan comparison process ensures you get the most bang for your buck. Gexa Energy electricity plans offer a diverse range of options tailored for Texans. By considering your needs, understanding different plan types, and armed with the right questions, you'll find the ideal plan. If you're new to this, reading our guide on choosing an electricity provider can also be a handy resource.

Ultimately, understanding how electricity gets to your home and the various intricacies of the Texas electricity markets empowers you to make informed choices. With the right electricity plan, you not only enjoy uninterrupted service but also ensure optimal savings and convenience. Remember, the best plan for you caters to your unique electricity consumption habits and preferences.

Learn More about Gexa Energy and their 100% renewable plans from environmentally friendly renewable sources.

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Gexa Energy purchases renewable energy credits (RECs) from renewable generation resources throughout North America to match 100% of the energy sold under your electric plan. The RECs Gexa purchases represent the renewable attributes of power generated from a variety of renewable energy sources, including, but not limited to, the sun, wind, geothermal, hydroelectric, wave or tidal energy, and biomass or biomass-based waste products, including landfill gas.