Which Energy Plan Length Should I Choose?
Find out which plan length is best for your energy needs.
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Understanding energy plan lengths and why they matter
Texas energy shoppers can choose from a wide variety of energy plan lengths, ranging from a couple of months to multiple years. The majority of contracts range from one to 36 months, with 12-month plans being the most popular.
Your contract length is one of the most important decisions because it determines how long you are committed to your plan and whether you’ll pay an early termination fee (ETF). Month-to-month plans have no penalty for canceling, whereas longer plans have varying fees depending on your provider and policy. To avoid paying unnecessary fees, pick a term you can reasonably commit to.
Most popular energy plan lengths
We dug into the last two years of our marketplace data to find out which contract lengths our customers prefer. According to our findings, most customers choose 12-month energy plans. Find out which other plan lengths are popular among our shoppers in the following table.
Match your plan length to your energy needs
While 12-month plans are preferred by most customers, other contract lengths may be a better fit for your lifestyle. Every shopper has a different set of needs and priorities. The challenge is figuring out which energy plan best suits your circumstances. Here’s how most term lengths meet the various needs of our Texas electricity shoppers.
12-month plans: A stable foundation
12-month energy plans are best for most Texans seeking a balance of stability and affordability.
Unsurprisingly, 12-month plans are the most popular contract length on our marketplace. This term delivers the most value for customers thanks to more options and competitive rates. It’s also a convenient time frame for both renters and homeowners.
If you want to secure an affordable energy plan without too much commitment, go for a 12-month contract. Many of these plans also offer bill credits, which can help you find extra savings if the usage requirements match your typical monthly consumption. Review the Electricity Facts Label (EFL) to determine if a bill credit plan complements your lifestyle.
Short-term plans: A flexible solution
Short-term plans are best for shoppers who need temporary energy with a flexible contract.
Month-to-month plans can be advantageous for those in a transition period. If you have a move coming up, a short-term plan gives you maximum flexibility because you can cancel at any time without penalty.
Our experts also recommend this contract length if you shop during peak seasons, like summer or winter, when prices may spike. Recalibrate when you’ll be up to renew your plan by waiting out the expensive season until prices drop. Then, switch to a more affordable power plan during a cheaper month.
Long-term contracts: Ideal for homeowners
Long-term contracts are best for homeowners with consistent energy usage and a stable living situation.
While committing to a long-term contract may seem daunting, it could be a great option for homeowners who intend to live in their homes for a while. Longer contracts typically provide favorable rates, protection from market spikes or renewal rates, and peace of mind. Consult your past energy bills to find out how much electricity you use monthly before committing to this type of contract.
Our experts’ advice: Shop for long-term plans during fall and spring, when prices are likely to drop. That way, you can secure a low rate that lasts multiple years.
Which term length is right for me?
The right contract length should deliver what you need most at the time of shopping. Our advice is to find a term length that:
- Aligns with how long you plan to live in your current home. Renters should consider 12-month plans (or shorter), whereas homeowners could spring for two- to three-year contracts.
- Offers a good price for your average monthly energy usage. Find a rate that fits your budget and matches your usage patterns. Check the EFL for the average price by usage tier.
- Matches your priorities. Do you need flexibility or stability? If flexibility is your top priority, choose a short-term plan. But if you want steady energy bills, consider a longer contract.
Choose Texas Power can help you determine which energy plan length is right for you. Take a quick quiz about your home and preferences to match with personalized energy plan results. If you prefer to chat with a real person, you can also call the number on your screen to connect with an energy agent who can steer you in the right direction.
Frequently asked questions about energy contracts
Is it risky to choose a long-term energy contract?
Not necessarily. For homeowners with consistent energy patterns, long-term plans are a great way to achieve affordable energy bills and peace of mind. But they tend to have high ETFs, which make them risky if you cancel early. Make sure you can stick with the plan for the whole term to avoid a penalty.
Are variable-rate plans expensive?
In general, yes, variable-rate plans are more expensive than fixed-rate plans. But you can cancel them at any time, which is a trade-off that might be worth it if your housing is in flux and you need a temporary energy solution.
How do I know which energy plan is best?
The best energy plan should comfortably fit within your budget and match your lifestyle. If you’re unsure how to determine the right fit, call our team for help. We can match you with a plan that complements your energy needs.
