What Is Fixed Rate Electricity?

A fixed rate electricity plan allows the consumer to select a plan and price that is appealing to them and lock it in over a set period of time. 

Here’s how it works:

Let’s say you sign up for a 12-month plan at a rate of 9 cents per kWh and during the cooler months in Texas you use only 900 kWh per month, then your energy charge will be $81 for those months.

During the hotter months, when more electricity is required to cool your home, if you use 1200 kWh per month at the same rate, then your monthly energy charge will be $108 during these months.

This energy charge, along with applicable taxes and delivery charges, will be included in your monthly bill. 

How Long Do You Have to Lock in a Contract with a Fixed Rate Electricity Plan?On average, fixed rate plans range from 6 to 36 months in Texas and 3 to 12 months in Northeastern states. However, some companies offer as little as 3 months of fixed-rate electricity, while others offer as much as 60 months.When energy prices are at their lowest, some companies will offer a short-term fixed rate electricity plan. 

Choose an electricity plan that fits your budget and electricity needs. With Frontier’s fixed rate electricity plans we are aware that locking in for too short or too long a period of time can end up being costly in the long run.

3 Advantages of Fixed Rate Electricity

            #1: Control Your Monthly Spending

One of the biggest advantages of fixed rate electricity plans is the ability to budget and control monthly spending.

As long as you are tracking your monthly usage, you’ll be able to predict what your monthly bill will be, limiting energy charge surprises.

With a variable rate, unpredictable price fluctuations could happen at any time as a result of supply shortages, extreme weather, and more.

#2: Protect Yourself from Rising Prices

Another great advantage to a fixed rate electricity plan is that you are protected from   rate increases during the term of your contract. The only circumstance in which your price could change during the minimum term is to reflect actual changes in law or regulatory charges.

Locking in a rate means that even in the most expensive months for electricity--your rate remains the same.

While you may use more electricity during these months, you’ll still most likely be able to predict what your energy charges will be without the need to watch the daily rise and fall of variable rates.

               #3: It’s Usually Less Expensive Than Variable Rate Electricity Plans

              While variable rate electricity plans may seem to be less expensive at first glance, it’s important to know that many companies will advertise the lowest possible “starting rate” to entice                consumers to choose that plan. During your contract term, variable rate electricity charges could go up or down and are subject to changing market conditions. A fixed rate electricity                    plan may seem like a higher kWh rate but, a fixed-priced plan offers peace of mind by locking in a fixed rate for a set period of time.