Variable vs Fixed Residential Electricity Plans

Variable and Fixed rates

If you live in a city, town or region in a state that offers a deregulated energy market, you can choose a retail electricity provider (REP) to supply electricity plans to your home. If you have just bought or rented a new home and are not familiar with the power providers in your new hometown, your realtor can probably refer you to good REP serving your area. You can also contact local utility companies or call the consumer information offices of your local government to obtain names and contact data for recommended REPs.

There are two major plan-types of electric supply accounts for residential power—fixed-rate and variable-rate. Once you understand their main differences, you can compare features and benefits before making choice based on your specific preferences and needs.

Choosing the Best Type of Residential Electric Power Plan: Fixed-Rate vs. Variable-Rate

Before making a choice between variable-rate and fixed-rate plans, you should carefully compare the benefits and drawbacks of each plan type, including the following:

Fixed-Rate Plans

  • Fixed-Rate Electricity Plans Are Dependable. Many customers favor this type of plan because the rates they are charged for their monthly usage do not vary, regardless of market fluctuations. The rate the customer pays remains the same for the duration of the contract. This can be of great help during times when balancing your budget is a challenge, especially when other expenses seem to escalate. The ideal time to secure a good price for a fixed-rate account is during early springtime, following peak winter demand and before summer begins. Electricity prices closely align with the price of the natural resources (commonly coal or natural gas) used to produce it. If the price of the resource increases, the cost of a new fixed-rate plan will also rise.
  • Fixed-Rate Electric Plans Can Become Expensive. If you have a long-term fixed-rate contract with your power provider and the price of electricity suddenly drops, you may not be able to break your contract to take a less expensive plan. In fact, some long-term agreements may keep you from changing to another plan for three to five years. In addition, it may cost a few hundred dollars for early termination of your current contract. For this reason, many consumers opt for a short-term fixed-rate agreement lasting three to nine months.

Variable-Rate Plans

  • Variable-Rate Electricity Plans Fluctuate in Cost. With a variable-rate electric plan, your charges can differ each month since rates fluctuate according to changes in the wholesale rates for electricity. Some people select this type of plan if they do not want to commit to a longer-term plan. Other customers choose a variable-rate plan if fixed-rate plans have increased in price at the time they open an electric service account. One advantage of having a variable-rate plan is no cancellation fee for closing an account since most of these plans are based on a month-to-month billing schedule and contract. These plans can be helpful if you are renting a home or apartment temporarily or waiting for better prices on a fixed-rate plan.
  • Variable-Rate Electric Plans Can Become Quite Costly. If you choose a variable-rate plan, your monthly electric bill may increase suddenly and significantly according to fluctuating electricity costs. Many power providers post graphics on their company websites showing electricity cost changes during different years and seasons. If you are selecting a variable-rate plan at the end of the summer, especially in warmer climes, be aware that the cost of these plans may riseby as much as 50 percent during August. If your current financial situation makes it difficult for you to handle a large and rapid increase in electricity service costs, a variable-rate plan may not be a good choice for you.

Selecting Prepaid Lights as Your Innovative New Electric Power Provider 

If you choose Prepaid Lights, which offerscost-effective electricity for your home with no deposit, as your new electric power provider, you will enjoy the convenience of paying your electric bills in advance. With its prepaid electricity plans, this innovative, customer-oriented REP serving many locations throughout Texas does not require a new customer deposit, credit check, long-term contract or personal ID for opening an account and selecting your electricity service plan. This type of account enables customers to pay into their accounts as they like, and a Smart Meter system will notify you whenever your prepaid balance is low so that you can replenish funds for your account.

By contacting a friendly and helpful staff member at Prepaid Lights today for full information on prepaid electricity plans, you can join the growing number of satisfied customers now benefiting from prepaid electric power services throughout the year. For further information or to open your new efficient and cost-effective electric power services account, you can reach a member of the Prepaid Lights team today by phone, email or on the company website at

Summary: Choose a fixed-rate or variable-rate electric power service or open a prepaid account with Prepaid Lights today. Enjoy quality home electric service with no deposit, credit check, long-term contract or personal ID verification.

Disclaimer: © April 2021 PayGO Distributors, LLC. This is an advertisement for prepaid electric service from PayGO Distributors, LLC., an independent energy sales organization. Energy services are provided by Young Energy, LLC DBA Payless Power REP#10110 and Brooklet Energy Distribution, LLC DBAs Acacia Energy, Snap Energy Latino, and Now Power REP#10137. There is a minimum required payment to establish a connection. Call for more information on minimum required payments, balances, and specific terms of service and promotional details. Utility fees may also apply and may increase the total amount that you pay. Offers subject to termination or change without notice. Se habla Español.

* Rates quoted are at 2,000 kWh per the Electricity Facts Label for Oncor. Please check EFL for your effective rate.

** Order must be placed online before 4pm CST. Meter must not be subject to a switch hold.

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