The three rate types, without the jargon
Fixed
Your energy rate is locked for the whole term. Predictable, boring, and right for most people. The catch: 'fixed' only fixes the energy charge — TDU delivery fees (30–40% of your bill) can still move.
Variable
The rate floats month to month, and the provider decides. It often starts with a low teaser, then drifts up quietly. Fine for a month or two between plans — dangerous as a home. This is where most overpaying lives.
Indexed
The rate is tied to a formula — usually the wholesale market. Transparent in theory, a rollercoaster in practice. Only makes sense if you truly understand the index and can stomach a bad month. For almost everyone, skip it.
Term length: the real tradeoff
Longer terms lock your rate against future spikes but trap you if a better deal appears. Here's how to think about it.
3–6 months
Flexibility over price. Good if you’re moving soon or between plans. You’ll usually pay a premium for the short leash.
12 months
The default sweet spot. Enough stability to ride out a summer, short enough to re-shop yearly. Most people should start here.
24–36 months
A bet that today’s rate beats the future. Sometimes smart when rates are historically low — but a 3-year lock at a bad rate is a 3-year mistake.
The EFL three-price trap
Every plan has an Electricity Facts Label showing the average price at 500, 1,000, and 2,000 kWh. Providers design plans so exactly one of those numbers looks amazing — and it's almost never the one that matches your home.
- The EFL brags
Great price at 1,000 kWh!
What it meansBuilt to look best at exactly 1,000. Use 700 in spring? Your real rate is far higher.
- The EFL brags
Cheapest at 2,000 kWh in the whole market!
What it meansOnly if you’re a huge user. For a 900 kWh apartment, that same plan can be the most expensive one.
- The EFL brags
Low 500 kWh price for small homes.
What it meansThe 500 figure hides that base charges dominate small bills — a low per-kWh number, a high total.
Bill-credit math (where plans hide the catch)
A '$100 bill credit when you use 1,000+ kWh' looks like free money. It isn't. That credit is the only reason the advertised rate looks low — and you only get it if your usage clears the threshold every month. Use 999 kWh in a mild month? No credit. Your effective rate jumps 4–5¢/kWh. Bill-credit plans reward one exact usage pattern and quietly punish everyone else. If your usage swings with the seasons, they're a trap.
Green plans and no-deposit options, honestly
Green / renewable plans
In Texas, 100% renewable plans are often the same price as brown ones — sometimes cheaper, thanks to cheap wind. If the green plan wins on your real cost, take it and feel good. Just don't pay a meaningful premium for a label; verify the renewable claim on the EFL, not the ad.
No-deposit plans
Prepaid and no-deposit plans skip the credit check and the upfront cash — genuinely useful if a deposit is the barrier. The tradeoff is usually a slightly higher rate or prepaid balance management. Worth it to get powered on today; re-shop for a cheaper fixed plan once you can.
Straight answers
For almost everyone, fixed. It locks your energy rate against seasonal spikes and makes budgeting sane. Variable rates only make sense as a short bridge between plans — as a permanent home, they’re where most people quietly overpay.
Only if your usage reliably clears the credit threshold every single month. Miss it once — a mild spring, a vacation — and your effective rate jumps sharply. If your usage swings, a plain fixed plan usually beats a bill-credit plan once you price it at your real numbers.
Often not. Texas has enough cheap wind that renewable plans frequently match or beat conventional ones. The rule is simple: if the green plan wins on your true cost, take it. Don't pay a real premium just for the label — and verify the renewable percentage on the EFL, not the marketing.
Yes — prepaid and no-deposit plans skip the credit check and the upfront cash, which is genuinely helpful if a deposit is your barrier. Expect a slightly higher rate as the tradeoff. Get powered on today, then re-shop for a cheaper fixed plan once you’re able.
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