Is It Better To Shop Short or Long Term Electricity Now?
If you’ve bought or sold a home in the summer, you know the dilemma. Do you sign up for a long term electricity plan to get the shopping process behind you? Or do you get a short term plan to get you through summer’s high prices? Though the answer basically depends on your situation, we going to help you understand the factors at play so you can make the best decision.
Firstly, locking in a fixed rate electricity plan means you pay the same price for the duration of the contract. Consequently, locking in a rate now means paying this summer’s electricity prices year round and perhaps longer. Therefore, it’s safe to assume a long term plan is unlikely to be your best option. So, what do you do when almost all fixed rate plans are 12, 24, and 36 months long?
Two common courses of action can break this cycle. Firstly, you can select a short term fixed rate plan. For example, choosing a 6-month plan puts you shopping again in January. Secondly, you can choose a variable rate plan. In this case, you’ll very likely pay a much higher price in the short-term. However, you’ll be ready to shop in the fall when prices are usually lower. Therefore, you can ride out the high prices in July and August. Then, evaluate your options in September.
Of course, the route you choose is ultimately depends on how much you want to shop. For example, you can minimize your cost by comparing historical electricity pricing patterns. However, if you’re impatient or pushed for time, then get comfortable with with paying a little more for power over the next two or three years.
Long Term Electricity Plans
In spite of rising summer wholesale prices, several long term fixed rate electricity plans still offer solid rates for Houston residential electricity customers:
| Retail Electricity Plan | Retail Electricity Provider | Contract Term | Average Price at 1,000 kWh | Average Bill at 1,000 kWh |
| Price Protect 24 | Spark Energy | 24 months | 9.6 cents | $101 |
| Spark Green Secure 24 | Spark Energy | 24 months | 10.0 cents | $101 |
| 24 Month Fixed | Tomorrow Energy | 24 months | 10.1 cents | $102 |
Surprisingly, these plans have lower rates now than March when they ranged from 10.6 to 10.7 cents per kWh. Additionally, these plans let you forget about shopping for power for another two years. Sure, these prices may go lower during the fall shoulder months. On the other hand, you can never know for sure how the Texas electricity market will behave.
Short Term and Variable Rate Plans
While longer plans offer one solution, they’re not for everyone. Especially if they include a high early termination fee. Admittedly, both short term and variable rate plans currently have higher prices and higher average bills. Of course, this can be a problem for some customers during that short term. On the flip side, these plans give you the flexibility you need to jump on a low fixed rate plan later:
| Retail Electricity Plan | Retail Electricity Provider | Contract Term | Average Price at 1,000 kWh | Average Bill at 1,000 kWh |
| Eagle 6 | TriEagle Energy | 6 months | 11.8 cents | $118 |
| Flex Forward | TXU Energy | Variable Rate | 13.6 cents | $136 |
You pay a little more now for the chance at bigger savings later. But which strategy is best, long term or short term, depends in part on your circumstances. The rest, however, depends on the weather and the market. Of course, it won’t hurt to conserve summer energy.
Your Best Bet on Long Term Electricity
The issue of short or long term electricity is all up to you. But no matter which route you choose, you want the best information to use in the decision-making process. Shop https://www.texaselectricityratings.com to find the plan that best meets your needs.