When to Sign Up for 3 Month Electricity Plans
2 minute readThree-month electricity plans can be a smart choice if you time them right. In Texas, electricity prices fluctuate throughout the
How to Choose the Best Electricity Plan in Texas
The Most Comprehensive Guide to Selecting a Texas Electricity Plan
10 minute read • Last update March 2026
Shopping for an electricity plan in Texas can be overwhelming. After all, there are dozens of providers, hundreds of websites, and thousands of plans to pick from.
To choose the best electricity plan in Texas, focus on five things: your actual kWh usage, the energy charge on the Electricity Facts Label, the contract length, any hidden fees, and the plan type.
This simple yet comprehensive guide walks you through each step so you can compare confidently and find the best energy plan for you.
Here’s what we’ll cover:
- Find your kWh usage
- Types of electricity plans
- How to compare plans
- Fees and gimmicks to avoid
- The best time of year to shop
- Other factors to consider
Know your kWh usage
Before diving into electricity plan shopping, you first need to know your home’s kilowatt-hour (kWh) usage.
You need to know how much electricity you consume before you can start evaluating plans because your usage will determine whether a plan is right for you.
To find your kWh usage, you can:
- Check past bills from your current provider
- Create an account on Smart Meter Texas
Moving into a new place? Ask the property manager or current owner if they’re willing to share their electricity consumption history.
Types of electricity plans
The second thing you absolutely need to know before starting your search? The different types of plans available and how to identify them.
There are two main types of plans: fixed-rate and variable-rate.
When shopping for electricity, we always recommend looking for a fixed-rate plan.
Fixed-rate plans are the best option for most Texans because you’re locked into the same energy for the entire contract, even if market rates increase. That means you’re protected from the increased costs of electricity during summer months when demand on the grid is much higher.
On a variable-rate plan, the energy charge is typically very expensive and subject to change on a monthly basis. They are unpredictable, lead to high bills, and can become incredibly costly during the summer.
| Rate Type | Explanation |
|---|---|
| Fixed | The price per kilowatt-hour remains constant for the duration of your contract. They are not impacted by fluctuations in market prices. |
| Variable | The price per kilowatt-hour can change every month during your contract. When market prices increase, the rate increases and vice versa. These rates are set at the discretion of the provider. |
There are a few sub-categories of fixed-rate plans to know as well: bill credit plans and time-of-use plans.
- Bill credit plan: Bill credit plans have a fixed energy charge, but they offer a credit back on your bill when you hit a certain threshold – usually 1000 kWh.
- Time-of-use plan: Time-of-use plans also have a fixed energy charge, but at certain times specified in the contract terms, the energy charge will be zero — typically free nights or free weekends.
Bill credit and time-of-use plans can seem like a great idea. Who doesn’t like bill credits or free energy, right?
Unfortunately, bill credit and time-of-use plans come with very expensive energy charges and ultimately lead to higher bills for most Texans.
The energy charge is generally so high that it’s difficult to save money in the long-term, even with the bill credits and free power.
How to find the best electricity rates
Now that we’ve covered the essentials (kWh usage and plan types), let’s dive into the actual electricity shopping process.
Your number one tool for evaluating and comparing electricity plans is a document called an Electricity Facts Label or EFL.
Comparing plans with Electricity Facts Labels
An EFL is a standardized document that informs consumers about the details of an electricity plan, including average price at 500, 1000, and 2000 kWh, energy charge, delivery charges, and other fees and terms.
- Average Price – average price per kWh based on 500, 1000, and 2000 kWh usage levels (why are there three prices?)
- Energy Charge – price per kWh for electricity, which will be fixed or variable
- Base Charge – some companies include monthly base charges regardless of energy use (BKV Energy does not)
- Minimum Usage Fee – some providers charge you when you use too much or too little electricity (BKV Energy does not)
- TDU/TDSP Delivery Charges – fees from your local transmission and distribution utility (TDU). Providers do not set or profit from delivery charges; they go straight to your utility company.
How to Read an Electricity Facts Label
You can use your kWh usage history and the information from EFL documents to calculate estimated bills and determine which plan is best for you.
Here’s the formula to calculate a bill estimate:
Bill = kWh Usage x (Energy Charge + TDU Delivery Charge per kWh) + Monthly TDU Charge
Let’s walk through a few examples:
- Plan A: Simple fixed-rate plan
- Plan B: Fixed-rate plan with base charge
- Plan C: Fixed-rate plan with bill credit at 1000 kWh
| Bill Element | Plan A | Plan B | Plan C |
|---|---|---|---|
| Plan Type | Simple fixed-rate | Fixed-rate with base charge | Fixed-rate with bill credit |
| kWh Usage | 2000 kWh | 2000 kWh | 2000 kWh |
| Energy Charge | $0.075 per kWh | $0.075 per kWh | $0.15 per kWh |
| TDU Delivery Charge | $0.051683 per kWh | $0.051683 per kWh | $0.051683 per kWh |
| Monthly TDU Charge | $4.23 per month | $4.23 per month | $4.23 per month |
| Base Charge | $0.00 per month | $9.95 per month | $0.00 per month |
| Bill Credit | None | None | $125 at 1000 kWh |
| Estimated Bill | $257.60 | $267.55 | $282.60 |
Which term length is right for you?
Texas electricity providers offer a wide range of contract lengths, ranging from 1 month to 3 years. Sometimes you may even find a 4 or 5-year plan.
How do you know which one is right for you? Well, each term length has its pros and cons, and some are more appropriate for one shopper over another. Let’s dive into the details of commonly offered plan terms.
| Term Length | Benefits and Considerations |
|---|---|
| 1 month | Variable plans offer short-term flexibility and are appropriate for folks who are planning to move in the near future. |
| 3 months | Similar to a 1-month plan, 3-month plans offer short-term flexibility for those anticipating a move. They are also useful for resetting your renewal cycle to the spring or fall when rates tend to be lower. |
| 6-9 months | A 6-9 month plans offers the same flexibility as shorter terms, with the added benefit of aligning your renewal period with the lower-rate seasons. This can help break a cycle of summer or winter renewals when rates are typically higher. |
| 12 months | Perfect for renters on annual leases or homeowners seeking a mid-term contract, 12-month plans offer stability without a long-term commitment. |
| 24-36 months | These longer-term plans generally come with lower rates compared to 12-month options, making them ideal for homeowners or long-term renters who prefer to avoid the hassle of yearly renewals. |
| 48 months or longer | Though less common, plans of 4 years or more can be advantageous for homeowners looking to lock in a long-term fixed rate and avoid frequent contract renewals. |
There’s no catch-all right answer for which term length is best because everyone’s circumstances are different. Weigh the pros and cons of each offering and select the option that best fits your needs and lifestyle.
Shop by energy charge instead of average price
When comparing plans, don’t compare average prices. Instead, look for a low energy charge.
Most electricity provider and plan comparison websites show the average price of a plan based on a standard usage of 2000 kWh per month.
This can be misleading, especially if your energy consumption varies from month to month or if your household uses significantly more or less energy than average. As a result, you may not be seeing the true cost of electricity for your specific usage needs.
How can you know what you’ll actually be paying? This brings us back to BKV Energy’s timeless mantra—always, always, always check the Electricity Facts Label.
When you look at the Electricity Facts Label, you’ll find a table showing the average price of electricity at usage levels of 500, 1000, and 2000 kWh. This breakdown helps you compare how energy prices vary based on consumption. Below that, you’ll notice a line labeled “Energy Charge” — this is the key figure to focus on when comparing plans.
Pay attention to early termination fees
Early cancellation fees or early termination fees are applied when you leave a contract before its completion date.
There are generally two types of early cancellation fees:
- Fixed: This ETF stays the same throughout your contract, regardless of how many months or days remain. They range from $150 to $300.
- Per remaining month: This ETF decreases as you get closer to the end of your contract. The most common cost of this type of ETF is $20 per remaining month on your contract.
Our recommendation? Choose a plan that has an early termination fee that decreases the longer you’re a customer.
That way, if you decide to leave for any reason, it’s easier to switch providers or plans.
When to start shopping for a new energy plan
30 days before your current plan ends, your provider is required to send an expiration notice. This is your sign to begin shopping for a new plan if you don’t want to renew with your current provider.
If you switch to a new provider in the final 14 days of your plan, you will not be charged an early termination fee. This is the best window to make the switch.
Gimmicks and fees to avoid
When reviewing a plan’s EFL, watch out for fees and gimmicks like base charges, minimum usage fees, time-of-use terms, and bill credits.
Many providers include these fees and marketing gimmicks, which can increase your annual spending on electricity by hundreds of dollars.
- Base charges – Base charges range from $4.95 to $14.95 per month, depending on the provider and/or plan. They are added to every bill and are not tied to your energy consumption. This means you could end up paying around $60 to $180 extra to your provider over 12 months.
- Minimum usage fees – Minimum usage fees are typical $9.95 and are added to your bill when you use less than 800 kWh during a billing period. This fee, in particular, punishes Texans who live in smaller homes or are good at conserving energy.
- Time-of-use – Time-of-use terms are typically advertised as free nights or free weekends. Plans with “free” time windows will have energy charges that are twice as expensive as a regular plan. It is incredibly difficult to shift enough energy consumption to the “free” windows and save money with these plans.
- Bill credits – Bill credits make electricity plans look very, very affordable when you hit an exact kWh usage, even though they have super high energy charges. When you don’t hit that exact usage, you either do not receive the credit or the credit “wears off,” and you end up overpaying.
The best time of year to shop for electricity
Typically, the best time of year to shop for electricity in Texas is during the spring (March through May) or fall (October through November).
These months generally offer lower rates because demand on the Texas grid drops.
- Air conditioners aren’t running full blast
- Heaters aren’t yet needed
- Wholesale energy costs come down
- Providers can pass those savings along in the form of cheaper plans
Summer (June through September) is usually the most expensive time to lock in a rate.
- High temperatures drive up electricity demand across the state, which pushes wholesale prices higher.
- If your contract happens to expire during the summer, you may want to sign a short-term plan (one to three months) to bridge the gap, then shop again in the fall when rates typically come back down.
Beyond seasonal timing, pay attention to your contract expiration date. Providers are required to send you a renewal notice 30 days before your plan ends. That notice is your signal to start shopping.
If you wait too long to switch and let your contract expire, most providers will automatically roll you into a month-to-month variable rate that can be 30 to 50% higher than what you were paying.
More deciding factors to consider
There are a few more factors to pay attention to when comparing electricity providers in Texas:
- Payment options: Some providers have more bill payment flexibility than others. Look for a provider that offers your preferred method: credit card, debit card, check, online, or in-person.
- Average billing: Want the same bill every month? Ask before you sign up if a provider offers average billing.
- Customer service: Have a specific way you like to interact with a customer support team? Look out for providers that allow you to get in touch via email, phone, text, Facebook Messenger, WhatsApp, and more.
- Plan benefits: A few providers go above and beyond for their customers by offering additional ways to save. Check for customer loyalty and rewards programs that include prizes such as gift card giveaways and exclusive shopping discounts if you want to make the most of your home’s energy.
- Renewable energy: If green energy is important to you, look out for providers that offer plans backed by 100% renewable power from Texas solar and wind farms.
- Deposit: Look into whether a deposit is required to begin service and whether you qualify for a deposit waiver. Waivers can be applied for customers who are 65 and older, have a good history of paying bills on time, or are victims of family violence with a signed letter from the Texas Council on Family Violence. Texans with high credit scores will likely not need to pay a deposit to begin service.
- Provider reputation: Check Google and TrustPilot reviews to get a sense of the quality of service and reputation of the provider. Some providers have very low ratings online, and you may want to avoid them.
- Satisfaction guarantee: If you’re looking for flexibility to make a switch after signing up, some providers offer a trial window or satisfaction guarantee that allows you to switch within the first 30 days without incurring an early termination fee.
Frequently asked questions about Texas electricity plan shopping
What is the best type of electricity plan in Texas?
For most Texans, a simple fixed-rate plan with a low energy charge is the best option. Fixed-rate plans lock in your energy charge for the duration of the contract, which protects you from summer price spikes when grid demand is the highest. We recommend avoiding plans with variable rates, as well as fixed-rate plans with base charges, minimum usage fees, bill credits, or time-of-use terms.
Should I choose a fixed or variable rate plan?
We recommend fixed-rate plans for the vast majority of households. Variable-rate plans offer month-to-month flexibility with no long-term commitment, but the rate is set based on wholesale market conditions, and they are typically much more expensive than fixed-rate plans. Variable-rate plans may make sense in scenarios where you need electricity temporarily for a short-term lease or if you’re about to move.
How do I know how much electricity I use?
You can find your monthly kWh usage on your past electricity bills, listed as “usage” or “kWh used.” For more detailed views, you can create a free account with Smart Meter Texas (https://smartmetertexas.com), which provides daily and monthly usage data. Knowing your monthly usage data helps you more accurately compare plans and determine which one is best for your household.
What is a good electricity rate in Texas?
A good energy charge for a fixed-rate plan in Texas will fall between 5-9 cents per kWh, depending on the time of year, plan length, and overall market conditions. Keep in mind that the energy charge is only one component of your bill. TDU delivery charges, base charges, and other fees will impact your total cost and all-in average price. Always compare plans by looking at the energy charge on the Electricity Facts Label rather than the advertised average price.
Why is the advertised rate different from what I actually pay?
The advertised average price you see on plan listings is calculated at three specific usage levels: 500, 1000, and 2000 kWh. If your usage doesn’t exactly match one of those levels, your average price per kWh will differ. Plans with base charges, minimum usage fees, time-of-use terms, and bill credits are especially prone to this because the fixed fees and credits shift the average price significantly at different kWh consumption levels.
Do I need a deposit to sign up for electricity in Texas?
Some providers may require a deposit for new customers, typically ranging from $100 to $400, depending on the plan length, your credit history, or your expected kWh usage. Many Texans qualify for deposit waivers with proof of 12 months of on-time bill payments, if they are 65 years or older, or if they are a victim of family violence. Some providers also offer no-deposit or prepaid plans, although these often come with higher prices.
Can I choose an electricity plan if I’m renting?
Yes, if you pay your own electricity bill, you have the same ability to shop and choose a plan as a homeowner. Your lease or apartment management should not restrict or require you to select a specific provider, although they may recommend one.
Simple and affordable electricity with BKV Energy
At BKV Energy, we work hard to offer electricity plans that meet all of the above criteria to help Texans save big on their monthly energy bills. If you’re interested in switching to a provider with affordable fixed rates, no unnecessary fees, great customer service, a robust rewards program, and much, much more, then enter your zip code below.
Related articles
