Month to Month Electricity That’s Not Prepaid

Looking for a month-to-month cheap Texas electricity plan? You’ve found it!

Month-to-month electricity plans, also known as variable-rate plans, are subject to frequent rate changes but have no contract. This can be a convenient option for consumers that don’t want to commit or that need a short term solution for energy.

Pro Tip: If you are moving soon, you don’t have to go month to month. You can get a fixed rate electricity plan instead. If you move before your contract expires, your early termination fee is waived as long a you provide a forwarding address as proof of your move.

Month to Month vs. Fixed Rate Texas Electricity Plans

We usually recommend fixed rate electricity plans for our customers. Because summer power pricing in Texas is risky business. Most of the electricity used at home is for your A/C. And when it gets hot in Texas, the electricity usage cranks up and and so do monthly power prices. A fixed rate plan gives you price certainty and protection against summer price increases.

A month to month electricity plan gives you flexibility of switching to a fixed rate plan at any time. That makes it a solid option if you want to shift your electricity contract expiration date to a different month.

How to View the Rate History on Month to Month Variable Electricity Rates

Electricity companies must also publish the rate history for any variable rate electricity plan. So you’ll be able to review their rate history and see if you are comfortable with the price fluctuations you may experience.

When you shop for month to month energy plans, the advertised rate is the price you pay for your first billing cycle. Review the rate history for insight on how the price changes each month, so you can set your expectations. You can find the rate history link on the Electricity Facts Label; it’s a legal requirement for any month to month plan.

The EFL will also tell you by how much your rate can change each month. Watch for language like “this price may change in subsequent months at the sole discretion of XYZ company.” And that’s the big warning we make on variable month to month plans. That statement means they can charge you any rate they want after the first billing cycle.

You can find the price for your next month of electricity by checking your online account, or by calling your electricity supplier.

Shopping for a new provider? Read our step-by-step guide to shopping for Texas electricity. And consider a 12 month electricity plan, or 6 month electricity plan, which is a cheaper option than month to month.

How do Variable and Fixed Rates Compare in Pricing?

Variable rates reflect the current market electricity pricing. Typically, retail electricity companies will look at the number of customers that they have on a variable rate. Their supply team will purchase, or hedge, a one month wholesale contract for that number of customers.

Most variable rate electricity plans look comparable to fixed rate plans when you are signing up. But, that sign-up offer? That’s only good for the first month of your contract, or until your next meter read. Then you’ll transition onto their standard variable rate plan that could be significantly higher.

Fixed rate plans reflect the cost of a 12-month wholesale electricity contract. These contracts include both summer and winter months, and a risk premium. They could be higher or lower than a variable rate contract.

So the positive about month-to-month variable rates is you have total control and can leave any time. But the negative is you can sign up for an low power rate and have it go through the roof the next month.

The variable rate you sign up for is just for that first bill cycle. After that, the rate will change. You can learn more about the differences between Fixed, Variable and Index rates in our other articles.

Moving? Don’t Limit Yourself to Short-Term Electricity Plans

Some consumers think that they need to go on a short term electricity plan if they are moving soon. After all, why enter a contract that you will have to break? Well go ahead and break your contract. That’s right. We said it.

If you are moving and under contract just give your electricity company proof of your move, such as a forwarding address for your last bill. They will automatically waive your early termination penalty if you move. That’s the law.