The Difference Between a Fixed- and Variable-rate Electricity Plan

The Difference Between a Fixed- and Variable-rate Electricity Plan

Knowing the difference between a fixed- and variable-rate electricity plan can help you choose the best plan for your family, but the ins and outs of each option can be confusing. These are the two most common types of electricity plans in Texas, so you will see them in nearly every plan offered by electricity providers. Here’s what you need to know to find the best plan:

Variable Rate Plans
Variable rate plan pricing will be dependent on the market. This means that the rate you pay for electricity per kilowatt hour (kWh) can change monthly and sometimes even hourly. Temperature, weather, and supply and demand influence rates. If you live in a very hot or cold environment, your bill can spike due to fluctuating rate costs.

Many people, especially those in moderate climates, can save over time with these plans, but changes in supply and demand or temperature can be them challenging to budget for. These plans often offer the incentive of rarely requiring long-term contracts and allowing customers to opt out without penalty fees.

Fixed Rate Plans
A fixed rate plan is much more simple. It offers a rate that generally stays the same for the duration of your contract, so you will always know what rate per kWh you are paying for electricity. This allows you to more easily budget your energy costs accurately. However, sometimes consumers may pay more than market value at some points during their contract. Always make sure you read the fine print so you know what you’re signing up for.

With Volterra Energy, choosing a plan is simple. We offered fixed-rate plans with low rates and no hidden fees. Our selections allow you to choose a predictable and affordable rate. Even better, for each new customer, we make a donation to a Texas charity at no cost to you. That’s why we call ourselves the electricity company with a heart!