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A Quick Guide to Texas Energy Plans

Kimberly Hutchings
May 17, 2023

Did you know that Texas is the nation's number one energy-producing state? It's true! In fact, Texas' energy production is nearly double that of Florida, which ranks second on the list.

The state is also heavily reliant on renewable energy sources (go Texas!), producing a ton of solar energy and ranking fifth in the world for wind power generation. 

If it sounds awesome, that's because it is. But if you're living in the state (or planning to move there sometime soon), you should know a few things about Texas' energy market to set yourself up for success. Here's a quick guide to get you started.

What Sets Energy in Texas Apart

To begin with, it's essential to understand what sets Texas' energy marketplace apart from the systems used by most other states.

The first thing you’ll need to know is that Texas has a largely deregulated energy market, which means consumers must select a provider, otherwise known as a Retail Electric Provider (REP), to source their electricity. REPs package electricity into plans and sell it to consumers at varied rates to power their homes. 

This deregulated market is in direct contrast to how most other states operate, where the electric provider and the company producing the electricity are typically one and the same.

This deregulated system means consumers are presented with a wide range of options to choose from when it comes to how they power their homes and the costs associated with it. These options are presented as energy plans, agreements between you and your electricity provider outlining the services you'll receive and the amount you’ll be expected to pay for them.

An overview of energy consumption and production in Texas.

Understanding Your Energy Plan Options in Texas

Electricity plans and associated costs are measured in kilowatt-hours or kWh. Kilowatt-hours represent the amount of energy you consume each month, so understanding your consumption habits is a vital first step in choosing the energy plan that will best suit you. 

Smart plugs and smart thermostats are both great ways to begin taking more control of your energy use, providing you with the power to build automatic schedules, assess your needs and turn on and off devices both at home and on the go with the simple touch of a button.

You may also want to ask yourself some additional questions to get a better understanding of your energy needs and whether a particular plan is right for you. Consider the following:

  • What is the average price per kWh in your area?
  • Is the plan fixed-rate or variable-rate? Is there a pre-pay option? More on this in a minute.
  • Do you have any special electricity needs? For instance, do you own an electric vehicle?
  • Are there any incentives associated with the plan in question?
  • What are the conditions associated with terminating your contract?
    Note: By Texas law, you can switch out of your existing electricity contract up to 14 days before your contract end date without penalty.
  • Where does your power come from — renewable resources? Fossil fuels?

Beyond understanding your energy habits and electricity needs, the biggest thing you'll want to determine is the type of plan that best suits you. In the above questions, we mentioned a few different options: fixed-rate, variable-rate and pre-paid.

Here's a short breakdown of each of these.

Fixed-Rate Energy Plans

In a fixed-rate energy plan, your electricity provider will set you up with a predetermined billing rate per kWh. This price will remain fixed in place for the length of your contract.

Like having a fixed-rate mortgage on your home, predictability is the most significant benefit of a fixed-rate energy plan. You'll always be able to ballpark how much you're spending each month (providing your consumption habits don't fluctuate too much), making things like budgeting relatively easy. Plus, if there's an unexpected weather event in your area, you'll benefit from not having to pay higher rates when there's increased demand on the grid.

The only real downside to fixed-rate energy plans is that if electricity costs in your area drop, you're unlikely to benefit from any price reductions.

Variable-Rate Energy Plans

In contrast to fixed-rate energy plans, variable-rate energy plans, as their name implies, offer more variation in terms of the rates you're paying to power your home month to month.

Variable-rate energy plans allow your provider to raise or lower your per kWh rate each month, meaning sometimes you'll be paying more and sometimes less than previous months. This may sound enticing when you consider potential savings, but these energy plans don’t support any kind of budget certainty and can be risky, especially if your area experiences unexpected spikes in demand.

Pre-Paid Energy Plans

And finally, we have one more notable energy plan type — the pre-paid energy plan. Pre-paid energy plans work differently than fixed or variable-rate energy plans because they're based on a predetermined dollar amount rather than measuring how much energy you consume each month and billing accordingly. With a pre-paid plan, you’ll pay a set amount in advance and be able to use power until you’ve maxed out that pre-paid value.
This type of plan is an excellent option if you’re on a stricter budget because you're in total control of what you pay for with the convenience of paying as you go, but the downside is if you go over, your power will get cut off until you top up your account.

Finding the Right Plan with OhmConnect Energy

Now that you understand how energy plans in Texas work, its time to choose your plan! Luckily, OhmConnect Energy has a ton of different options available to suit your needs.

Tips for saving on energy bills in Texas.

We offer 12, 14, 24, and 36-month fixed-rate contracts at low kWh rates that are great if you’re looking for budget predictability.

Wanting to go green? OhmConnect Energy can do that too! Our GreenConnect 12 - 100% Renewable plan runs at a low-fixed rate with energy generated entirely from clean, renewable sources — it’s electricity you can feel good about! 

There are even options available for those with special energy needs! For instance, if you have an electric vehicle, consider opting for the EVConnect 12 plan to take advantage of half-price charging between the hours of 9:00 pm and 4:59 am — win! 

Want to know more about OhmConnect Energy’s plans? Click here to explore what’s available in your area.

The rise of renewable energy sources in Texas.

Monitor Your Energy Consumption and Get Rewarded with OhmConnect Energy

And once you've found the energy plan that's right for you, you can take things one step further by getting rewarded for your energy-saving efforts too!

As an OhmConnect Energy customer, you’ll be automatically enrolled in our free energy-saving program, designed to empower community members to know when to power down by alerting them to times when electricity is most expensive in their neighborhood. 

As a member, you'll receive an email or text when demand (and prices) spike, giving you the opportunity to unplug your devices, saving energy and money.

Just by participating in these energy-saving events, you'll get rewarded with Watts, points that can be cashed in for gift cards, prizes, bill credits and money right back into your wallet! That's because OhmConnect Energy takes the energy you save and sells it back to the grid, sharing those profits with YOU! It's a win-win! Click here to learn more and sign-up today. 

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