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How To Find The Best Electricity Rates In Houston, TX

In the past, residents of Houston, Texas, bought their electricity from the local utilities. Often, it was the only choice in the area. These utilities had only small incentives to keep rates low or to go the extra mile for their customers. 

Today, however, Houston boasts a competitive energy market, allowing residents to purchase power from different retail electricity suppliers and providers. With a deregulated electricity industry, consumers can compare different Houston electricity rates and choose from a variety of plans according to their needs. 

That said, with numerous electricity providers, how do you find and choose the best electricity rates for your home?  Here are some tips to follow.

Best Electricity Rates

  • Understand Your Electricity Usage

Before you start your hunt for the best electricity rates in Houston, TX, the first thing you need to consider is your needs. With full understanding of your requirements, you’re better equipped to choose the right plan for your home. 

Your past electricity bills can give you an idea of your home’s typical energy use. It’s best to estimate your future energy consumption based on your previous 12-month usage. It allows you to check for seasonal variations and helps you understand your lowest and highest energy use in a year. 

That said, here’s a quick estimate of the monthly usage level:

  • 500kWh for apartments and condominiums
  • 1,000kWh for small- and mid-sized homes
  • Over 2,000kWh for bigger homes

In general, electricity providers design each electricity plan to offer optimum pricing for various ranges of usage. Thus, make sure to calculate your expected monthly consumption and find the right provider.

  • Find And Compare Providers

Once you determine your average electricity usage, it’s time to start searching for the best rates and plans available. 

There are several ways to do this. You can ask your family, friends, and neighbors for their current electricity plans and their monthly expenses. These numbers should give you insights into which plans are most popular amongst your close circle. A quick Google search can also give you a list of potential electricity providers in your local area, so you can thoroughly check and learn more about each provider and their pricing plans. 

You can also find and compare Houston electricity rates using platforms such as ElectricityPlans, a shopping site that helps consumers make sense of different electricity plans. With this tool, you can easily compare and find the best rates and shop based on zip code or usage. 

  • Understand Different Plan Types

When comparing providers, you’ll come across several types of plans as well. Each type has its pros and cons, and the one you choose will determine how much you need to pay every month.

 Here are the four common types of electricity plans to help you find the right plan for you:

  • Fixed-Rate Electricity Plan

A fixed-rate plan means that you have a locked-in electricity rate for the term of the contract, which typically lasts six, 12, and 24 months. Fixed plans help avoid price hikes during the peak season, particularly during summer, when you’re air conditioning system is in full blast. However, it also means that you’ll miss out on lower bills when the lean seasons come. 

  • Variable Rate Electricity Plan

A variable rate plan is the opposite of a fixed plan, meaning you’re not locked into a contract and your electricity rates will be based on the current cost of electricity. While this type of plan offers more flexibility, it’s prone to fluctuating market prices. So, while you can enjoy lower prices during the lean seasons, you’ll also have to shell out more money during the peak seasons or when the market price increases. 

  • Indexed Electricity Plan

Closely similar to variable rate plans, an indexed plan offers flexibility and fluctuates monthly. However, instead of the current market price, indexed plan rates are directly tied to the pricing formula with a publicly available index. Make sure to ask the provider for the specifics of their pricing formula, and how and when you’ll receive notifications for index changes. 

  • Prepaid Electricity Plan

Similar to prepaid phone plans, a prepaid electricity plan allows you to purchase energy services in advance. It’s a pay-as-you-go service that calculates your energy usage daily via a smart meter. 

  • Check Hidden Costs And Fees

When comparing the best electricity rates in Houston, don’t assume that the advertised price will be the final cost you’ll have to pay. After all, your energy charge won’t be the only item on your electricity bill. 

Most plans may include extra recurring monthly charges, such as those incurred by the Transmission and Distribution Service Provider and your utility company. A reliable provider should disclose these fees and costs, but you should always ask for them. This allows you to get an accurate estimate of your monthly electricity cost and effectively compare providers. 

Takeaway

Finding the best electricity rates in Houston, TX, doesn’t have to be difficult or confusing. By following the above tips and methods, you can find the right plan for your home energy needs while ensuring that your monthly bill fits your budget. 

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