What is the difference between fixed-rate and variable-rate electricity in Texas?
Texas PUC rules define a fixed-rate product as a contract of at least three months where the price stays the same each billing period, apart from specific pass-through changes such as TDU charges. A month-to-month product lasts 31 days or less and may not contain a termination fee. This page explains terms. It does not rank them.
Fixed-rate
A fixed-rate product runs for at least three months. The price is the same each billing period for the whole term. The rule allows exceptions for TDU charge changes, certain ERCOT fee changes, and new or changed fees from laws beyond the provider's control.
If you have one, your bill shows the end date in bold, underlined type. See When does my Texas electricity contract end?
Month-to-month
A month-to-month product lasts 31 days or less. The rules say it may not contain a termination fee.
Anything else
A contract where the price can change between billing periods is not fixed-rate. The rule defines a "variable price product" as one for which "price may vary according to a method determined by the REP." For residential customers, a variable price product can be only a month-to-month contract. Your contract documents say how yours works. The Electricity Facts Label is one of them. See What is an Electricity Facts Label?
Where to find it on your bill
- Fixed-rate: look for a contract end date in bold, underlined type.
- Any type: your Terms of Service and Electricity Facts Label say what kind of contract you have.
Example only. Made-up bill excerpt. Not a real bill.
| Label on the bill | What to look for |
|---|---|
| Contract end date | A date in bold, underlined type (example: "Your fixed-rate term ends 12/31/2099") |
Common Questions
What is a month-to-month contract?
A product that lasts 31 days or less. Texas rules say it may not contain a termination fee.
Can the price on a fixed-rate contract change?
Only in the ways the rule allows. The rule lets the price vary from the disclosed amount only for TDU charge changes, certain ERCOT fee changes, and new or changed fees from laws beyond the provider's control. Otherwise the price is the same each billing period.
How do I know which kind of contract I have?
Read your contract documents: the Terms of Service and the Electricity Facts Label. Or call your provider and ask. A fixed-rate contract also shows an end date on your bill in bold, underlined type.
Is one kind better than the other?
This page does not say. What fits depends on your situation and your contract. The page only explains what the rule's terms mean.
Related Questions
- When does my Texas electricity contract end?
- What is an Electricity Facts Label (EFL)?
- Why did my Texas electric bill go up this month?
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