Choosing Variable or Fixed Dallas Energy Rates

Dallas energy consumers have a wide selection of choices when it comes to choosing their Dallas energy providers and plans, thanks to the deregulation of the Texas energy industry back in 2002. One of those choices is whether to select a variable or fixed rate for their energy plan.

variable rate is just like it sounds; a rate that may change from month to month, depending on the rising and falling costs of energy and according to the provider's schedule. Providers have to let you know how much your plan is allowed to go up per month, and how you will be notified.There are also indexed rate plans, with variable rates that are tied to a particular index as defined by the provider.

A fixed rate plan provides one rate that you lock in for the plan term, which may be three months, six months or a period of up to three years. A fixed rate offer is usually slightly higher than the current variable rate, but may offer you savings in the long run.

When choosing between a variable or fixed rate, there are a number of things to consider. How long are you willing to lock in with this provider? Month-to-month plans will be variable rates, while the longer you are willing to commit to one provider, the lower your fixed rate offer may be.

Which is Cheaper in the Long Run?

Retail energy providers are not stupid; they are not going to offer you a rate that will cause them to lose money. Their fixed rates are based on their long term projections of the cost of natural gas and whatever other fuels they purchase to fulfill their obligations. In the long run, you will probably end up paying the same for your electricity whether you choose a fixed or variable rate.

In the short term, however, consumers with variable electrical rates are subject to the inconvenience of dealing with the sometimes drastic fluctuations of the energy market. After a major storm, for instance, fuel shortages may lead to drastic increases in the price of electricity. An exceptionally hot summer in Dallas can cause demand to skyrocket, along with electricity prices. Having a variable rate for your electric plan subjects you to the possibility of suddenly being hit with a very large electric bill.

Consumers who do not have the financial wherewithal to cover unforeseen costs such as an unexpectedly large electric bill here and there should avoid selecting variable rate Dallas energy plans.

Check your electric choices at ShopTXElectricity and find out how you could drop your Dallas electricity prices and avoid overpaying for your Dallas electric companies.

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