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When Is the Best Time to Shop for Texas Electricity Rates?

by Garrett Faden

Texas summers (and even some winters!) can wreak havoc on our electricity bills. And if you’ve elected the power to choose your own energy provider, you’ve probably seen firsthand how challenging it can be to know the best time to shop for electricity in Texas. You’ve likely reviewed yearly plans, 6 month energy plans and 3 month energy plans trying to figure out when is the best time to renew electricity contracts to keep your bill low. When really, we all just want answers to one major question: When is electricity cheapest? If we could nail down the answer to this question, choosing an electricity plan would be a lot easier. But perhaps unsurprisingly, this question leads to more questions—and luckily, we’re answering them all.

Table of Contents:

When Is the Best Time to Shop for Texas Electricity?

The simple answer? When you’re paying too much. But here’s a breakdown of three scenarios that better show what we mean:

Scenario 1: Your current provider is raising rates.

Often, we find that the great electricity rates we got at the beginning of our contract were part of some deal or special. But then once your current contract has switched to month-to-month “renewal rates,” your bill is not as low as it had once been—meaning it could be time to switch.

Scenario 2: You’ve looked at other providers and found a lower price. 

Though you may be hit with an early termination fee, it can still be the most financially responsible decision to switch plans mid contract—especially if you found an energy plan that’s significantly lower.

Scenario 3: It’s during off-peak season and rates are lower in general.

While it’s smart to keep a pulse on what other providers are charging for electricity (especially when you find a lower rate!), it can be pretty time consuming as the consumer. Energy Ogre is constantly monitoring the market and can automatically switch you to the cheapest available plan. 

Overall, the best time to lock in electricity rates may depend on where you are with your current contract. If your contract has expired and you’re paying month-to-month rates, it’s time to switch.

Should I Renew My Texas Electricity Contract?

Here’s the thing: Texas’ deregulated energy market can be a great thing—but only if you put in the effort to find the best deal. And when it comes to renewing your electricity contract, you have to remember that Retail Electric Providers (REP) provide you with a service, sure, but they’re designed to make money, too. Often, "renewal rates” are much higher than your contract rates because REPs know they can take advantage of their loyal customers who aren’t likely to research other (possibly lower!) electricity plans. 

If you're not checking your electricity plan at least once a year and comparing it to the current market, there's a good chance you may not have the best rates available. Of course, every case is different. Compare your electric rates with your neighbors here:

Compare Texas Electric Rates

Cheapest Time of Year for Texas Electricity Rates: When to Buy

When are energy rates the lowest? It’s difficult to pin down the absolute best, specific time. However, the normally good times would be after the peak of summer’s high temperatures or after the low of winter temps. This is due to the lower electricity demand during these more temperate months.

Why Do Texas Electricity Prices Fluctuate Year-Round?

In short, supply and consumption are the two main factors that affect the price of electricity the most. Other reasons include the type of fuel being generated into electricity, your geographic location, the cost to run power plants and distribution systems, and statewide regulations. 

Knowing this, it’s easy to understand why electricity rates peak in the summer for Texans—because that’s when we demand a ton of power for our home’s A/C units. Similarly, we see another spike in the winter—because although we don’t live in a super cold climate, we like our homes heated. This means you can expect “off-peak” rates during the fall and spring, making it most likely to be the best time of year to lock in a new electricity rate.

Summer and Winter Are the Most Expensive Times of Year for Texas Electricity Rates

Did you know that nearly half of all Texas electricity is powered by natural gas? As the cheapest energy source for REPs to buy and sell to us, it makes sense we’d rely on it so much. But its price fluctuates throughout the year. One major time of change is during the summer as we cool down our homes.  And now, while Texas still relies heavily on natural gas, more and more solar production has started to become part of ERCOT’s fuel mix. While solar absolutely has its benefits, electricity companies are trying to work out their pricing to factor in overnight low temperatures, and the cost of producing electricity at those times. This, combined with the after-effects of Winter Storm Uri in 2021, have made for higher pricing in the winter.

Though the summer and winter seasons aren’t the most ideal times to lock in a new rate, if it’s your time for a new contract, there are ways to find the right electricity providers during peak times:

Number one, you could rely on Energy Ogre to compare plans for you. We’re constantly checking for the lowest rates and identifying any hidden fees, so you can feel confident you’re getting the most cost-effective plan available for you. Use our electricity savings calculator to find out how much Energy Ogre can save you.

Energy Savings Calculator

Number two, you could educate yourself on the market. This ensures you aren’t being taken advantage of by overpaying for your electricity or getting trapped in a less-than-ideal contract. 

And number three, you can try and negotiate with your REP. You could see if they have an option to bring down your price if you commit to more time in a contract. Attempting to do this may or may not work, and can be tricky to do.  In the end, you are always able to leave a contract, but you may be subject to an early termination fee if it’s not in the proper window. 

Remember, if you work with Energy Ogre, we handle some of this negotiating for you behind the scenes. 

At times, Energy Ogre will work with providers to “blend and extend” contracts to move your contract end date to a more favorable time. This strategy often happens because we negotiate with the provider to add a few months to your contract at an improved rate. We handle all this so you can enjoy a lower electricity rate without any of the hassle or stress that comes with switching.

When Is the Best Time to Switch Electricity Plans?

Like we’ve mentioned earlier, the best time to switch is normally right before your current contract ends, so you can begin to start another. Most REPs let you schedule your next contract 30 days out, and you have a 14-day window before your contract end date to switch to a different plan or provider without penalty.

Why Your Electricity Plan’s Contract Length Is So Important

Based on what we said above, the length of your contract can dictate how much you’ll pay for electricity rates. As you consider the length, it’s critical to figure out when you’ll be coming out of one plan and entering a new one. You may consider signing a contract that is for shorter or longer, but then gets you into a better renewal cycle.   

There are pros and cons to both part-year and yearly electricity plans, so it’s going to come down to personal needs when it’s time to choose.

Need a reminder? Plug in your info below, and we'll email you when it's time to switch!

Contract Expiration Reminder

How Do Part-Year Electricity Plans Work?

Part-year plans can come in 3, 6, 9, or 18-month long terms. Recently, we haven’t seen as many short-term plans that come at a lower price than 12-month ones. If you do look at these shorter plans, you have to think about when they will end. At times, the shorter plans may be cheaper initially, but then when you’re ready to sign up for your next contract, the rates could be much higher if it’s the wrong time of year.

Full-Year Electricity Plans: 12-Month and 24-Month Contracts

The upside (and downside) to full-year electricity plans is that you know what you’re signing up for. You’ll be paying the average of both off-peak and peak rates, which can be reassuring for those that want to know, with some level of certainty, what their electricity bill will look like. These are often the more fiscally responsible plans.

Make Sure You’re Choosing the Right Type of Plan

Now that you’ve figured out when to switch plans, it’s time to decide which is the  best type of electricity plan for you. In Texas, the primary types are fixed-rate and variable rate plans. Every plan has its set of pros and cons, but here’s a brief breakdown of each plan:

Fixed-rate plans: 

  • These plans guarantee you the same price per kilo-Watt hour (kWh) for the duration of your contract. 
  • If you can find a low, cost-efficient plan that is 9-12 months long, you will typically benefit from being locked into that price. Therefore, you will have saved a fair amount of money during that contract when comparing your plan to a variable-rate plan.

Variable-rate plans: 

  • The prices of variable-rate plans change monthly, and the rate changes at the discrepancy of each REP.  
  • In Texas, these month-to-month energy plans have no long contracts or cancellation fees, but the rate you’re locked into for the month can vary wildly between months depending on a variety of factors, including demand, weather, supply-chain, grid problems, etc. 

Understanding the best time to shop for electricity in Texas will help you save money in the long run—and luckily, now you know when electricity is cheapest, normally. At Energy Ogre, it’s our mission to lower your energy bills, so trust us to find the right plan (at the right time!) for you.

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