Texas electricity providers offer a wide range of electricity contract term lengths from 1 to 36 months, and in some extreme cases, even 4 or 5 years.

Choosing between them can become complicated — how do you know which one is the best deal offering the most savings? It’s all about finding a balance between security and savings.

Here’s everything you need to know about selecting the best term length for your budget.

Pros and Cons of Short Term Contracts

Upsides to Short Term Contracts

Short term contracts (such as those less than 1 year long) offer more freedom for people who enjoy shopping around for lower electricity prices. They are easier to get out of when you find a lower rate.

They are also great for folks who are staying somewhere for a short amount of time. You can sign a deal for the duration of your extended stay without worrying about a high cancellation fee.

The Downside to Short Term Plans

Short term plans are not without their drawbacks. If you sign a short contract, the entire market could swing in the wrong direction during the term. When it comes time to sign up again, you may get stuck with a high rate.

Pros and Cons of Long Term Plans

Advantages of Long Term Energy Contracts

The most significant benefit to signing a longer term contract (such as one longer than 2 years) is the stability. When your rate is locked in for the duration of your contract, you are insulated from negativity in the marketplace due to changes in cost of production and weather. This means you can better predict your finances for the foreseeable future.

Another benefit? You don’t have to worry about finding a plan. You can set your account to autopay and get on with the rest of your life.

Disadvantages of Long Term Electricity Plans

There are a couple downsides to a longer term plan. First, if you find a plan part of the way through your current contract with a lower rate, you may get stuck paying a high early termination fee.

Second, if you cannot afford the early termination fee while the market drops, you are stuck paying a higher rate for electricity until your plan ends.

Extra Long Energy Plans

Some Texas electricity providers may offer plans that are outrageously long with 4 to 5 year terms. These plans are backed by wild guesses, stabs in the dark, and crystal ball predictions about the distant future.

Providers offering these plans do not know how state, national, and global economics, weather patterns and climate change, or updates to the Texas power grid regarding renewable energy sources and battery storage will impact the cost of electricity that far in advance.

We do not recommend signing up for plans this long because the early termination fees may be astronomical and if the market swings in the right direction for the consumer, you will not be able to take advantage of the potential savings in your household.

The Best Term Length

The ideal term length for residential electricity is 9-24 months. Plans like these offer the perfect balance between rate stability, potential early termination fees, and flexibility to switch to another plan or provider. These plans are backed by much more reasonable assumptions about the future of energy production costs, updates to the Texas grid, weather, and climate change.

At BKV Energy, we take this one step further. Our Bluebonnet plan automatically enrolls you in our Blend & Extend program.

Our Blend & Extend software automatically searches for opportunities to lower your rate in the middle of your contract. If we find an opportunity, we’ll give you the option to switch and save without paying a cancellation fee.

When you sign up for BKE Energy’s Bluebonnet plan, you get the perfect combination of factors:

• Price stability
• Low early termination fees
• Opportunities to lower your rate for free
• Rates backed by realistic market data

Enter your zip code to explore plans and prices in your area. Contact us today if you have any questions.

The post Short vs Long Term Electricity Plans: Find the Best Contract Length appeared first on BKV Energy.

In this article we examine a couple of the most popular energy plans on the market in Texas – free nights or free weekends plans. Here’s the big question: do free nights and weekends plans really save money?

The pros

Free energy at night or on the weeekend

The word “free” certainly captures a lot of attention when shopping for electricity and these plans hold true to the name. When you examine the Electricity Facts Label before enrolling, you’ll find that you will have a reduced or $0 energy charge at night (usually from around 9PM to 6AM) or over the weekend (usually from Friday evening to Monday morning).

Potential savings

If you are able to adjust your electricity consumption patterns enough, you may be able to reduce your electricity bill in comparison to the other plans you could have signed up for. It’s not easy, but it is certainly possible for some households.

The cons

Increased daytime or week day kWh rates

Unfortunately, free nights and weekends plans are often marketing ploys to encourage you sign up with one company over another. While the plan offers free or reduced energy rates at night or on the weekend, your energy charge during the day or during the week is elevated to overcompensate for your savings.

Most households end up paying more with a free nights and weekends plan than if they had signed up for a simple fixed rate plan instead.

Adjusting usage behavior is difficult

Whether you live in a large home or an apartment, alone or with a family, changing your electricity consumption to take advantage of a free nights and weekends plan is hard.

To save big with one of these gimmicky plans, you have to shift a large percentage of your consumption to the night or the weekend, when most folks are sleeping or relaxing and enjoying themselves.

What type of plan should you choose?

For the large majority of Texans, we recommend signing up for a simple fixed rate plan instead. Why? Because they lead to lower energy bills. If you’re skeptical, check out the charts below.

We compared one of our simple fixed rate plans against competitor free nights and weekends plans to see how the bills would turn out at different levels of energy usage.

For both types of plans, our simple fixed rate plan leads to lower bills at 500, 1000, and 2000kWh.

If you’ve ever been enticed by an electricity plan offering free nights and/or free weekends, you’re not alone. It’s easy to find yourself wondering if the plan is too good to be true. These plans can be both intriguing and confusing, leaving potential customers like you scratching their heads as they try to determine whether free nights or free weekends electricity plans can actually lead to savings on your monthly energy bills.

• Free nights and weekends electricity plans are a form of marketing that are most often not beneficial to customers.
• Careful evaluation of the plan’s terms and your personal energy consumption is required to determine if free nights and weekends plans offer potential savings, as they generally come with much higher rates during non-free hours.
• Consider a simple fixed-rate plan as an alternative, or significantly adjusting your energy consumption habits, before enrolling in a free nights and weekends plan.
• Always, always, always check the Electricity Facts Label.

Learn more about other types of electricity plans

• Fixed vs Variable Rates: Which is Better?
• How Bill Credits Lead to Higher Electricity Bills
• What Are Base Charges on Electricity Bills?
• What Are Indexed Electricity Plans?
• Prepaid Electricity Plans: Higher Costs, Higher Risk
• Are EV Charging Plans Worth It?

The post Pros and Cons of Free Nights and Weekends Electricity Plans appeared first on BKV Energy.

For most drivers of electric vehicles, we do not recommend enrolling in an EV charging energy plan. Your monthly energy bills would likely be lower with a simple fixed rate plan that does not have time of use stipulations in the terms and conditions.

As electric vehicles (EVs) become increasingly popular, many potential and existing EV owners are left wondering about the best way to charge their vehicles at a low cost. Electric vehicle charging plans have been introduced as a solution to this problem, but are they worth it?

• EV charging plans are tailored energy plans that offer reduced rates over night specifically for charging electric vehicles to manage electricity costs
• Before enrolling, carefully analyze EV charging plans (or other Time-of-Use (TOU) options)
• Simple fixed rate plans come with lower prices per kWh hour and lead to lower overall monthly bills

What is an EV (electric vehicle) charging electricity plan?

An Electric vehicle (EV) charging electricity plan is designed to provide EV owners with special rates that cater to their unique energy usage patterns. These plans come in various types, such as Time-of-Use (TOU) plans and dedicated EV plans, tailoring to the diverse needs of EV owners.

Other time-of-use (TOU) plans

Time-of-Use (TOU) plans are designed to incentivize a shift in energy usage throughout the day, in order to reduce the load on the grid and promote sustainability. These plans offer lower energy rates during off-peak hours when the demand for electricity is low, and higher rates during peak hours when the demand is high, encouraging customers to use electricity when it’s more affordable and environmentally friendly.

Examples of other Time-of-Use plans include those that offer free nights or free weekends.

Dedicated EV plans

Dedicated EV Plans, on the other hand, offer reduced rates specifically for EV charging during designated hours. These plans recognize the unique charging needs of electric vehicle owners and provide them with a tailored solution to manage their energy costs. For example, the EV Plan offered by DTE Energy provides customers with reduced energy rates for EV charging during designated hours.

Enrolling in a dedicated EV plan can offer benefits such as potential lower monthly bills and a positive environmental impact through the promotion of electric vehicle use. Yet, considering your specific EV charging needs and comparing the available plans is a vital step before committing to a decision.

EV charging plans are marketing tools

EV charging plans are a niche marketing tool to encourage drivers of electric vehicles to enroll in a plan that is likely to lead to higher energy bills than a regular fixed rate plan. The idea is to entice drivers with potential savings by leveraging off-peak charging times.

It’s crucial to realize that EV charging plans are designed with higher kWh rates (between 5-10 cents more per kWh) during the day that may counterbalance free hours over night. Even with the free hours, you end up with a higher bill.

To help you ascertain whether an EV charging energy plan suits your needs, ensure to peruse the Electricity Facts Label to comprehend the plan’s details, including the price per kWh, contract terms, and other pertinent information. Furthermore, ponder over alternative options such as fixed rate electricity plans.

Higher kWh rates during the day overcompensate for free hours over night

Higher kWh rates during peak hours can overcompensate for lower rates overnight, leading to higher overall energy costs for consumers who use electricity primarily during the day.

You could pay 5-10 cents more per kWh

Some EV charging plans charge an additional 5-10 cents per kWh, which can significantly increase your overall electricity costs, even with the free hours for charging the vehicle over night.

Majority of electricity consumption happens during the day

The majority of electricity consumption for residential customers occurs during the day, largely attributed to people using their air conditioners and other appliances when they are at home. As a result, higher kWh rates during the day can significantly impact your overall energy costs, especially if your electricity consumption is primarily during peak hours.

Read the Electricity Facts Label before enrolling

Before enrolling in any energy plan, it is crucial to read the Electricity Facts Label to understand the details of the plan, including the price per kWh, contract terms, and any additional fees or discounts. This information will help you make an informed decision about whether an EV Charging Energy Plan is the right choice for you, considering how much energy you typically consume.

When evaluating different energy plans, consider factors such as the duration of the contract, the rate per kWh, and any additional fees or charges. Additionally, it is beneficial to compare the plan to other energy plans to ensure you are receiving the best value possible.

Alternatives to EV charging plans

If you find that an EV charging energy plan may not be the best fit for your needs, there are alternative options available, such as fixed rate electricity plans. These plans provide a consistent rate for electricity regardless of the time of day, offering stability and predictability in terms of pricing for the consumer.

Fixed rate electricity

Fixed rate electricity plans offer stability and predictability in terms of pricing, making it easier to budget energy costs. Their beauty lies in the stability they offer. Regardless of how much electricity you use or when you use it, your rate per kWh is locked in for the duration of your contract. This predictability can be a significant advantage, especially for budget-conscious consumers who value consistency over potential fluctuations in cost.

Is it possible to save money with an EV charging plan?

Before opting for an EV charging energy plan, it’s necessary to take into account factors such as your driving habits, home energy usage, and rate comparisons. Gaining a thorough understanding of your unique energy consumption patterns and needs will enable you to make an informed decision about the suitability of an EV charging energy plan for you.

To save money with an EV charging plan, it is recommended to:

• Evaluate home energy usage
• Adjust your home energy consumption habits

By considering these factors and implementing strategies to optimize your energy usage, you can potentially save money on your monthly electricity bills and make the most of your EV charging energy plan.

Evaluating home energy usage

When evaluating your home energy usage, it is important to take a comprehensive look at your electricity consumption patterns. Take into account the amount of electricity you’ve used on a monthly basis throughout the past year.

This historical data provides a clear picture of your energy habits. After gathering this data, compare your historical kWh usage to the rates outlined in the EV charging energy plan you’re considering. This comparison will allow you to calculate the potential cost of your energy consumption under the new plan. By doing this, you can estimate whether or not you’d experience savings with the EV charging energy plan.

Adjust your home energy consumption habits

In an ideal scenario, if you can shift over 45% or more of your electricity usage to the free hours provided by the plan, you might be able to save with an EV charging plan. However, this is often an unlikely scenario for most households. Here are some tips for how to reduce your energy consumption.

The reason being, the majority of our energy usage tends to happen during the day when we use air conditioning systems, appliances, and other devices. Therefore, while it’s theoretically possible to save with an EV charging plan by shifting a significant portion of your usage to off-peak hours, in reality, it may not be feasible due to our daily energy consumption patterns.

Pros and cons of EV charging plans

As with any decision, weighing the pros and cons of EV Charging Energy Plans is important before making a choice.

Pros of EV charging electricity plans

One of the major benefits of EV charging electricity plans is the provision of free electricity for charging your electric vehicle overnight. This not only caters to the unique charging habits of EV owners but also encourages responsible energy usage by promoting charging during times of low demand on the electricity grid.

Cons of EV charging electricity plans

While EV charging electricity plans do have their benefits, they also come with certain drawbacks that are important to consider. One of the most significant cons is the higher energy rates during the day when electricity isn’t free. This is a crucial factor to consider, especially for households that consume a lot of power during the day.

During the day, when most of our energy consumption tends to happen, these plans charge higher kWh rates. Whether you’re using air conditioning, appliances, or other devices, the cost can rack up quickly.

What to know before enrolling

In conclusion, EV charging energy plans can offer potential benefits for electric vehicle owners, such as cost savings, convenience, and environmental sustainability. However, it is crucial to carefully consider your unique energy consumption patterns and the rates of plan before enrolling.

To save on electricity, consider enrolling in a simple fixed rate plan from BKV Energy.

Learn more about other types of energy plans

• Fixed Rate vs Variable Rate Plans: Which is Better?
• Free Nights and Free Weekends: Are They Worth It?
• How Bill Credits Lead to Higher Electric Bills
• What Are Base Charges on Energy Bills?
• Prepaid Electricity Plans: Higher Costs, Higher Risk
• What Are Indexed Electricity Plans?

The post Should You Enroll in an EV Charging Electricity Plan? appeared first on BKV Energy.

Prepaid electricity plans are not the best option for most consumers. There are many drawbacks to signing up for a prepaid energy plan including higher prices, rates that can change month to month, risk of termination due to lack of funds, and minimum usage fees.

While prepaid plans may allow you to sign up without a credit check, entering your social security number, no long-term commitment, and no termination fee, you are likely to end up spending significantly more on electricity when your bill arrives each month. Prepaid plans can offer very flexibility during the enrollment process, but that flexibility comes at a price.

• These plans often allow enrollments without credit checks, social security numbers, or deposits
• They also generally do not require early termination fees or specific contract lengths
• However, prepaid plans often come with significantly higher energy rates that increase your monthly bills
• Prepaid plan energy rates can change month to month, so you never know in advance what you’ll be paying per kWh
• Potential for complete service disconnection if funds run out

What are prepaid electricity plans?

Prepaid electricity plans allow customers to pay in advance for their electricity, rather than at the end of the month. Prepaid electricity plans have gained popularity in Texas because they allow for:

• Upfront payments
• Flexibility in enrollment: no credit checks, no deposits, and no social security number
• Buy electricity as they need it, without the worry of long-term contracts or credit checks

These benefits can make prepaid plans an attractive option in the short term, but when looking further in the future, prepaid energy plans can hurt in the long run.

Billing and payments

One of the key features of prepaid electricity plans is their unique billing structure. Customers pay for their electricity usage upfront, and in return, they receive daily balance alerts that help them keep track of their energy consumption and costs. This pay-as-you-go approach eliminates the need for a traditional monthly bill and allows customers to manage their account balance more effectively.

Customers might find it simple and convenient to recharge their prepaid electric service account. With options to pay from their phone or online when the balance is low, they can even set up autopay to maintain a positive balance consistently. However, if you don’t setup autopay and you forget to pay, you run the risk of lapsing on available funds and your service may be shut off entirely.

Daily account notifications via text message or email might be provided by retail electric providers. This service helps customers closely monitor their electricity usage, energy costs, and account balance. This level of transparency empowers customers to make informed decisions about their energy consumption and make adjustments to save money.

Contracts and commitments

The absence of long-term contractual obligations or commitments stands out as a major advantage of prepaid electricity plans. Unlike postpaid electricity plans that often require customers to sign contracts for a fixed duration, prepaid plans provide the freedom to switch providers or plans whenever desired.

This flexibility allows customers to explore different electricity rates and potentially find better deals without being tied down by long-term agreements. One should consider that prepaid plans might not always provide the same discounts or incentives as traditional plans, and there may be additional fees or charges for customers.

Advantages of prepaid electricity plans

The absence of credit checks and deposits are among the few advantages of prepaid electricity plans. This makes it easier for customers with limited financial resources or varying energy consumption patterns to access electricity without the traditional barriers associated with postpaid plans.

Prepaid electricity plans also provide customers with the opportunity to monitor their energy consumption and expenditure closely.

Moreover, prepaid plans offer:

• Flexibility in billing, contracts, and consumption control
• The ability for customers to adapt their energy usage based on their needs and budget

Drawbacks of prepaid electricity plans

Despite the numerous benefits of prepaid electricity plans, some potential drawbacks need to be considered. One of the primary concerns is the risk of service disconnection if funds run out. This can be inconvenient, especially for customers who may not be able to recharge their account immediately. During the summer in Texas, it can be incredibly dangerous (especially for children and seniors) to go without electricity to power a home’s air conditioning system.

Another potential downside of prepaid electricity plans is the possibility of higher per-kilowatt-hour rates compared to fixed-rate plans. This means that customers may end up paying more for their electricity usage in the long run, depending on the market rates and their consumption patterns.

Customers should carefully balance the pros and cons of prepaid electricity plans prior to decision-making. While the flexibility and control offered by these plans can be attractive, potential drawbacks such as service disconnection and higher rates should be taken into account. Always read the Electricity Facts Label before enrolling in any energy plan.

How prepaid energy plans compare

A comparison with other options such as fixed-rate electricity plans can aid in better understanding the suitability of prepaid energy plans. This comparison will highlight the differences in billing, contracts, and consumption control, enabling customers to make informed decisions about their electricity needs.

Fixed rate electricity

Fixed-rate electricity plans involve a contractual agreement that locks in a set rate for a specified period, offering stability and predictability in energy costs. With these plans, customers can plan their energy costs more efficiently, knowing that their rate will remain consistent throughout the duration of the contract.

This stability can be particularly appealing for customers who prefer to have a clear understanding of their monthly expenses, regardless of market fluctuations. However, one potential disadvantage of fixed-rate electricity plans is that customers may be locked into a rate that is higher than the prevailing market rate. This is why it’s important to sign up for a new plan when rates are low, such as in the spring or the fall.

In comparison, prepaid electricity plans offer greater flexibility and control over energy usage and electricity costs, but may come with the risk of service disconnection and potentially higher rates. The choice between these two options ultimately depends on the customer’s priorities, budget, and energy consumption habits.

What to know before enrolling in a prepaid energy plan

Various factors like your budget, energy usage habits, and need for flexibility will determine if a prepaid electricity plan is the right choice for you. For customers with limited financial resources or fluctuating energy consumption patterns, a prepaid plan may be a suitable option.

Additionally, if you value the ability to monitor and adjust your energy consumption in real-time, a prepaid plan can provide the control and transparency you’re seeking. On the other hand, if you prefer stability and predictability in your energy costs, a fixed-rate electricity plan might be a better fit.

A thorough assessment of your individual needs and priorities should ultimately guide your decision to enroll in a prepaid electricity plan. By considering factors such as budget, energy usage, and flexibility, you can make an informed decision that best suits your lifestyle and energy requirements.

Prepaid electricity plans offer a unique and flexible alternative to traditional energy plans, with benefits such as no credit checks, no deposits, and the ability to better manage energy usage and costs. However, potential drawbacks, such as service disconnection and potentially higher rates, should be carefully considered. By comparing prepaid plans with fixed-rate electricity options and assessing your individual needs, you can make an informed decision about the best energy plan for you.

Explore BKV Energy’s affordable and simple fixed-rate energy plans by entering your zip code.

Frequently asked questions

What are the disadvantages of prepaid electricity?

Prepaid electricity plans can come with higher per kilowatt-hour (kWh) rates and more variable rates than traditional post-paid plans, making them potentially less cost-effective. However, prepaid plans can be beneficial for those who want to avoid deposits, late fees, and other charges associated with post-paid plans.

Do you save money with prepaid electricity?

Prepaid plans typically come with significantly higher energy rates compared to a simple fixed rate energy plan and the rate can increase month over month because you are not locked in. While you may avoid a deposit or an early termination fee, your energy bills may eclipse those savings.

What are the main benefits of prepaid electricity plans?

Prepaid electricity plans provide flexibility, without any credit checks or deposits, allowing customers to better control their spending and contracts. This type of plan is ideal for those who want to avoid long-term contracts and have more control over their energy costs. It also allows customers to pay for their electricity in advance, which can help them budget

How do prepaid electricity plans differ from fixed-rate electricity plans?

Prepaid electricity plans allow customers to pay upfront for their electricity usage, offering greater control over consumption, whereas fixed-rate plans lock in a set rate for a specified contract term, providing stability and predictability in energy costs. These two types of plans offer different advantages to customers, depending on their needs. Prepaid plans are ideal for those who want to have more control over their energy usage, while fixed-rate plans are better for those who want to have a predictable energy bill.

Learn More About Other Electricity Plan Types

• Fixed Rate vs Variable Rate Plans: Which is Better?
• Free Nights and Free Weekends: Are They Worth It?
• How Bill Credits Lead to Higher Electric Bills
• What Are Base Charges on Energy Bills?
• Why Indexed Energy Plans are Banned in Texas
• Should You Enroll in an EV Charging Plan?

The post Are Prepaid Electricity Plans a Good Option for Texans? appeared first on BKV Energy.

Should you sign up for an indexed electricity plan?

In Texas, customers are not able to sign up for indexed electricity plans as of May 2021, when the governor signed bills banning this type of plan across the state. If you were able to, indexed rate electricity plans come with huge risk and electricity shoppers are better off enrolling in a simple fixed rate energy plan instead.

Navigating the world of electricity plans can be a daunting task, with numerous options and pricing structures to consider. Amidst the myriad of choices, how can you ensure that you’re making the best decision for your household or business? In this blog post, we’ll explore indexed, fixed, and variable rate electricity plans, delving into how they work, and their pros and cons.

• Indexed electricity plans offer potential cost-savings but come with risks of price volatility that can lead to incredibly high electric bills
• Fixed rate plans provide stability and budget certainty, while variable rate plans can be flexible but also have significant price fluctuations
• The Griddy Energy debacle serves as a warning to understand the pricing model, contract terms and consumer protections when selecting an electricity provider

Tying costs to market indicators

Indexed electricity plans, no longer allowed to be offered by retail electricity providers in Texas, tie costs to market indicators. This allows customers to potentially save money when energy prices are low. However, this comes at a cost, as indexed plans also expose customers to the inherent volatility of the electricity market.

Fixed and variable rate plans are much more common.

How indexed electricity rates work

Indexed rates are determined by underlying variables, such as wholesale electricity prices. This means that when wholesale prices are low, customers on indexed rate plans can potentially enjoy lower bills. However, when wholesale prices spike, as they did during the infamous Griddy Energy debacle, customers may be faced with astronomical bills.

One particular type of indexed rate plan, the “block and index” strategy, allows customers to lock in a portion of their electricity consumption at a fixed price, while the remaining portion is subject to market fluctuations. This hybrid approach provides some level of protection against price volatility while still offering the potential for savings when market prices are favorable.

Nevertheless, the potential risks of an indexed electricity plan outweigh the potential benefits due to exposure to market fluctuations.

Pros and cons of indexed plans

There are a couple advantages to indexed electricity rates:

• Potential for savings compared when wholesale electricity prices are low
• Transparency, as customers can track market prices and directly see their impact on their bills

However, with these benefits come certain drawbacks. Here are the cons:

• Inherent price volatility, while customers may enjoy lower bills when market prices are favorable, they also face the risk of sudden and dramatic price increases when market conditions shift
• Lack of stability can make budgeting difficult and leave customers vulnerable to unexpected financial strain

The Griddy Energy debacle

The Griddy Energy debacle serves as a cautionary tale for those considering indexed electricity plans. When Winter Storm Uri hit Texas in February 2021, it caused massive price surges in the electricity market, leaving Griddy customers with astronomical bills. This resulted in:

• Public outcry
• Bankruptcy
• Liquidation
• A series of lawsuits against the company

Griddy Energy’s pricing model was based on wholesale prices, which meant that customers were exposed to the full brunt of the market fluctuations during the storm. While Griddy customers typically enjoyed lower prices compared to other providers, the storm highlighted the risks associated with this type of pricing model.

The Griddy debacle illustrates the importance of understanding the potential risks and benefits of indexed plans and making informed decisions when selecting an electricity provider.

Winter storm and price surge

When the winter storm hit Texas, it caused an unprecedented cold snap that led to a major power outage. This, in turn, caused electricity prices to skyrocket, reaching as high as $9,000 per megawatt-hour. Griddy customers, who were on indexed rate plans, experienced the full impact of these price surges, as their bills were directly tied to market prices.

The Public Utility Commission mandated the sale of electricity at the $9,000 rate for four days of frigid temperatures. This was done in an attempt to incentivize power plants to come online and restore power to millions of Texans left without it. This decision, however, had disastrous consequences for Griddy customers, who were faced with astronomical bills due to their indexed pricing model.

Griddy Energy bankruptcy and liquidation

As a result of the high electricity bills experienced by Griddy customers during the winter storm, the company faced financial turmoil, ultimately filing for bankruptcy. The bankruptcy process led to the liquidation of the company, leaving former Griddy customers to secure alternative electricity providers.

The Griddy Energy debacle highlights the importance of understanding and managing the risks associated with indexed rate plans. While these plans can offer potential savings during favorable market conditions, they can also expose customers to significant financial strain during periods of market volatility.

Lawsuits and regulatory actions resulting from Griddy’s failure

In the wake of the Griddy debacle, the company faced numerous lawsuits and regulatory actions. The Texas Attorney General initiated a lawsuit against Griddy under the Texas Deceptive Trade Practices Act, accusing the company of misleading customers about the risks associated with their pricing model. Additionally, customers filed class-action lawsuits against Griddy, seeking compensation for the exorbitant bills they faced during the winter storm.

Griddy has contested the legitimacy of the Public Utility Commission orders that set the electricity pricing at $9,000 per megawatt-hour and is also challenging a $30 million claim that the Electric Reliability Council of Texas is seeking in bankruptcy court. The ongoing legal battles serve as a stark reminder of the risks associated with indexed rate plans and the importance of understanding the pricing model and potential drawbacks when choosing an electricity provider.

Fixed rate plans: stability amid market fluctuations

For those seeking stability and predictability in their electricity costs, fixed rate plans offer an attractive alternative to indexed and variable rate plans. With a fixed rate plan, customers can:

• Lock in a set price for electricity throughout the duration of their contract
• Shield themselves from market fluctuations
• Have a sense of budget certainty

While fixed rate plans may not offer the same potential for savings when wholesale prices are low as indexed or variable rate plans, they provide peace of mind and allow customers to budget more effectively.

How fixed rates work

Fixed rate plans operate by locking in a set price per kWh for electricity for the duration of the contract, which can range from several months to several years. This means that regardless of fluctuations in the electricity market, customers on fixed rate plans will continue to pay the same rate for their electricity throughout the contract term.

Pros and cons of fixed rate plans

Primary advantage of fixed rate plans include:

• Ability to shield customers from market fluctuations and provide budget certainty.
• Customers can more accurately predict their monthly expenses and avoid the risk of sudden price spikes
• Protection against long-term price increases, as the rate remains consistent throughout the contract term

Disadvantages include:

• Fixed rate plans may not always offer the best value for customers if market prices fall below the contracted rate.
• Some fixed rate plans may come with early termination fees

Choosing the right fixed rate plan

Selecting the right fixed rate plan involves carefully considering factors such as contract length, renewable energy options, and tiered pricing structures. A thorough comparison of fixed rate plans should encompass an assessment of the contract duration, the rate offered, and any additional fees or charges.

To choose the right fixed rate plan for your needs, follow these steps:

1. Research different providers and plans
2. Compare rates and contract terms
3. Take the time to thoroughly investigate your options
4. Confidently select a fixed rate plan that provides stability and budget certainty while meeting your unique energy needs

BKV Energy strongly suggests that Texans sign up for simple fixed rate plans without gimmicks to maximize their energy savings. Enter your zip code to explore our plans.

Variable rate electricity plans: flexibility and risk

Variable rate electricity plans offer a unique blend of flexibility and risk, with prices that fluctuate based on wholesale electricity costs. These plans can be an attractive option for customers who are comfortable with price volatility and are willing to monitor energy prices to ensure they’re getting the best possible deal.

Just like indexed rate plans, variable rate plans bring along certain potential drawbacks such as price fluctuations and the risk of abrupt price spikes.

Up next, we discuss the workings of variable rate plans, their advantages and disadvantages, and provide insights on managing these plans in a deregulated market.

How variable rates work

Variable rate plans operate on a month-to-month basis, with the price per kilowatt-hour (kWh) changing each month based on current electricity market conditions. This means that customers on variable rate plans may see their bills fluctuate from month to month, depending on wholesale electricity prices.

While variable rate plans can offer potential savings when market prices are low, they also expose customers to the risk of price fluctuations and sudden spikes when market conditions change. This lack of price stability can make budgeting more challenging and may not be suitable for all customers.

Pros and cons

The main advantages of variable rate plans include:

• Flexibility, as customers can potentially benefit from lower prices when market rates drop below fixed rates
• Variable rate plans typically don’t have long-term contracts or early termination fees

However, the primary drawback of variable rate plans are:

• Inherent price volatility, which can lead to sudden and significant price increases when market conditions shift
• Lack of stability can make it difficult for customers to effectively budget for their electricity costs and may be particularly concerning for those on fixed incomes or tight budgets

Lessons learned from Griddy: protecting yourself in a deregulated market

The Griddy Energy debacle serves as a stark reminder of the importance of understanding your electricity provider and the potential risks and benefits associated with different types of electricity plans. By learning from the experiences of former Griddy customers, we can better protect ourselves in a deregulated market and make more informed decisions about our energy needs.

The upcoming sections will shed light on some key takeaways from the Griddy episode, encompassing the importance of understanding your electricity provider, keeping track of energy prices, and proactive measures to protect oneself in a deregulated market.

Always read the Electricity Facts Label

One of the key lessons from the Griddy debacle is the importance of understanding your electricity provider’s pricing model, contract terms, and consumer protections. By taking the time to research your provider and the various plans they offer, you can make more informed decisions about your energy needs and minimize the risk of unexpected financial strain. Always review the EFL before signing up.

Additionally, familiarizing yourself with your electricity bill can help you better understand the charges and usage associated with your electricity plan. By staying informed and asking questions about your provider and plan, you can protect yourself from potential pitfalls and ensure you’re getting the best possible deal on your electricity bill.

Monitoring energy prices

Another crucial lesson from the Griddy debacle is the importance of monitoring energy prices and market trends. By staying up-to-date on market conditions and investigating alternative electricity plans, you can take advantage of opportunities for lower electricity prices and protect yourself from potential price spikes.

Various methods for monitoring energy prices include:

• Utilizing smart plugs or smart meters
• Installing an energy monitoring system
• Exploring energy monitoring apps
• Examining real-time electricity trackers

By staying informed and actively monitoring energy prices, you can make more informed decisions about your electricity plan and potentially save money in the process.

Avoid indexed electricity plans to save on energy bills

The world of electricity plans can be a complex and daunting place. However, by understanding the differences between indexed, fixed, and variable rate plans, as well as the potential risks and benefits associated with each, you can make more informed decisions about your energy needs. The Griddy Energy debacle serves as a valuable reminder of the importance of understanding your electricity provider, monitoring energy prices, and protecting yourself in a deregulated market.

Remember to stay informed, ask questions, and weigh the potential risks and benefits of each type of electricity plan. With the right knowledge and tools at your disposal, you can confidently select an electricity plan that meets your unique needs and provides the stability, savings, and flexibility you desire.

Frequently asked questions

Is Griddy Energy still in business?

No, Griddy is not still in business. Griddy Energy filed for Chapter 11 bankruptcy protection in March 2021.

When did the Texas power grid fail?

In February 2021, Texas experienced its worst power crisis due to extreme weather, leading to failures in natural gas and coal power plants.

The crisis caused widespread blackouts and left millions of Texans without power for days. It also caused an estimated $195 billion in economic losses.

What is the difference between fixed rate and indexed electricity plans?

Fixed rate electricity plans provide stability with predictable bills, while indexed plans tie costs to market prices, allowing customers to potentially save money but also increasing their exposure to price volatility.

Indexed plans can be a great option for customers who are willing to take on the risk of price volatility in exchange for the potential to save money. However, fixed rate plans provide a more stable option for customers who want to avoid the risk of price fluctuations. Indexed plans are not available for residential customers in Texas.

What caused the Griddy Energy debacle?

The Griddy Energy debacle was caused by the 2021 Texas winter storm that led to massive price spikes in the electricity market, resulting in exorbitant bills, bankruptcy, liquidation, and lawsuits.

How can I protect myself in a deregulated electricity market?

To protect yourself in a deregulated electricity market, understand pricing models, contract terms and consumer protections, as well as actively monitor energy prices and market trends. Look for fixed rate electricity plans that provide stability.

Learn more about other electricity plan types

• Fixed Rate vs Variable Rate Plans: Which is Better?
• Free Nights and Free Weekends: Are They Worth It?
• How Bill Credits Lead to Higher Electric Bills
• What Are Base Charges on Energy Bills?
• Prepaid Electricity Plans: Higher Costs, Higher Risk
• Should You Enroll in an EV Charging Plan?

The post What Are Indexed Electricity Plans? appeared first on BKV Energy.

If you can, avoid signing up for an electricity plan with a base fee or a base charge. There are other plans that do not include these extra fees that can help you save more money on your monthly bills.

Are you puzzled by the base charge on your electricity bill and wondering “what is a base charge?” Wondering whether you should enroll in an electricity plan with a base charge at all? Here are the basics of what you need to know.

• Base charges are fixed monthly fees imposed by electricity companies regardless of how much energy you consume.
• Review and compare Electricity Facts Labels to determine which plans have or do not have base charges.

What are base charges or base fees?

Base charges refer to the fixed monthly fees imposed by electricity companies to supposedly cover administrative costs. They are separate from and unrelated to how much electricity you consume throughout a billing period.

Some electricity providers include base fees on all of their plans, others include them on just a few of their plans, and providers like us at BKV Energy, never include a base fee in our plans.

How much are base fees?

Base fees on electricity bills can range anywhere from $5 per month to $20 per month depending on the plan. There are also plans that will waive the base fee if you consume a minimum amount of energy. That is then called a minimum usage fee.

What do base fees cover?

When asked, energy companies that include base fees on their contracts typically explain the fees are needed to cover the costs of:

• Billing
• Customer service
• Account maintenance

The explanation makes sense until you notice how many plans there are without base charges included. Clearly, they are a necessary part of an electricity plan.

How base charges impact your monthly electric bills

Depending on your home’s overall energy consumption, the percentage of your bill dedicated to the base fee varies.

For example, if you live in a one-bedroom apartment that uses around 500 kWh per month. Your energy bill will be very low, potentially less than $100 per month depending on your price per kWh. If you were enrolled in a plan that required a base fee, then between 10-15% of your bill goes directly towards paying for something other than your electricity usage. That’s not a very good deal.

The impact of the base fee decreases as your energy consumption increases along with your total monthly payment. Regardless, there is no reason to pay a base fee when there are other plan options without them.

Other components of your electricity bill

In addition to the base charges, your electricity bill may include:

• Energy Charges: The price per kWh charges applied by the electricity provider for the electricity consumed.
• TDU Delivery Fees or TDU Pass Through Charges: There are two. One is a price per kWh charge and the other is a flat monthly fee. Both are from the TDU (Transmission and Distribution Utility) in your region. These fees are passed straight to the utility company.
• Taxes: Fees assessed by the state of Texas.

TDU delivery charges encompass the expense of supplying electricity to customers, whereas TDU meter charges encompass the expense of maintaining and reading the meter. Both charges contribute to your monthly bill and are applicable to all electricity customers in the TDU’s delivery area. Bear in mind that TDU delivery charges stay the same across all providers in the same delivery area, irrespective of the retail energy provider you opt for.

Why base charges are gimmicky

Base charges can be deceptive because the providers that add these fees to plans will claim they are necessary to cover the cost of administrative expenses, customer service, and billing. This story fails to stand on its own when other companies, like BKV Energy, do not include these fees in their terms.

These fixed fees are charged regardless of the actual energy usage, making it possible for customers to be charged for a service they are not fully utilizing. This perception of gimmickry arises from the disparity in base charges between different utilities or service providers, which makes it difficult for customers to make accurate comparisons.

To avoid the base charge pitfall, carefully review and compare the Electricity Facts Labels of various plans, considering not just the base charges but also other fees and charges. This will allow you to choose an electricity plan that best suits your energy usage patterns and financial situation.

Look for electricity plans without base fees

Opting for electricity plans without base fees can be advantageous as it eliminates the fixed monthly charge regardless of energy usage. This can be beneficial for individuals with low energy consumption or those who desire to have more control over their electricity costs.

Advantages of plans without base fees include:

• Increased flexibility and options
• Higher potential savings on your monthly electricity bill

Exploring such plans offered by your electric company could lead to potential savings on your monthly electricity bill and allow you to customize your energy consumption to better suit your needs and budget.

In conclusion, understanding base charges and their impact on your electricity bill is crucial in choosing the most cost-effective energy plan for your needs. Remember to carefully review and compare the Electricity Facts Labels of different plans and take control of your energy consumption to make the most of your hard-earned money.

Learn about other types of energy plans

• Free Nights and Free Weekends: Are They Worth It?
• How Bill Credits Lead to Higher Electricity Bills
• Fixed vs Variable Rate Plans: Which is Better?
• What Are Indexed Electricity Plans?
• Prepaid Electricity Plans: Higher Costs, Higher Risk
• Should You Enroll in an EV Charging Plan?

The post What Is the Base Charge on Your Electric Bill? appeared first on BKV Energy.

For most Texans, electricity plans with bill credits are not recommended. You are more likely to receive lower electricity bills when you opt for a simple fixed rate plan without a bill credit.

Every month, as you receive your electricity bill, you might wonder if there’s a way to save on those ever-increasing costs. One option that often catches the eye is enrolling in an electricity plan with a bill credit. But are bill credit electricity plans worth it?

• Bill credits are promotional strategies that do not always lead to energy bill savings.
• Evaluate the Electricity Facts Label before enrolling in a bill credit plan for an informed decision.
• Fixed rate plans should be considered as a primary option when selecting an energy plan.

How bill credits work

Understanding the workings of a bill credit electricity plan and its potential impact on your monthly payments is key when considering this option.

Here’s how a bill credit plan works:

1. The plan offers a fixed dollar amount credit on your energy bill when you utilize a specific amount of energy, either a minimum usage with no maximum, or a range with a minimum and a maximum.
2. To qualify for the bill credit, you must maintain electricity usage that satisfies the requirements laid out in the plan’s EFL.

Choosing an electricity plan solely based on a bill credit might not be the best decision for everyone. Factors such as your monthly kWh usage, the rate per kWh, and potential tiered rate structure of the plan play a crucial role in determining whether you’ll save money. Comparing electricity prices per kWh with other plans, evaluating your historical kWh usage, and understanding the plan details is necessary for an informed decision before enrollment.

Bill credits are marketing tools, not savings opportunities

Bill credits are used as marketing tools by electricity providers to attract customers. If you use the right amount of energy, you get money back on your bill, but that does not mean you’ll end up spending less overall compared to another plan.

These plans are typically marketed as fixed-rate plans, ensuring that the rate you pay for electricity will remain constant, even with market fluctuations. However, the energy usage charge for a bill credit plan is comparatively higher than other plans. This means that if your usage falls above or below the specified range of the bill credit plan, you will be subject to a higher rate for electricity than anticipated. To avoid this, it’s important to monitor your usage closely.

Identifying the optimal usage and staying within that range is key to maximizing the benefits of a bill credit plan. Should your usage fail to meet the standards set in the bill credit plan EFL, there will be no bill credit applied. Understanding your electricity usage before choosing a plan is vital, as going beyond the upper limits of the bill credit plan can lead to much, much higher bills.

Higher kWh rates lead to higher bills even with credits

Bill credit plans can lead to increased bills, compared to a simple fixed rate plan, even with the application of bill credits. This is because the price per kWh for a bill credit plan is comparatively higher than other plans. You can find that the price per kWh for your electricity usage can be 5 to 10 cents higher with a bill credit plan. As a result, even with the application of the bill credit, your total cost of electricity may still be higher than anticipated.

Evaluate the Electricity Facts Label before enrolling

The Electricity Facts Label (EFL) is an important document that provides essential information about an electricity plan, including rates, fees, and other associated details. Before enrolling in a bill credit plan, it’s crucial to review the EFL to understand the true costs and potential savings of the plan. This will help you avoid any surprises on your electricity bill, such as higher rates due to fluctuating usage or hidden fees. Here’s what to look for:

• The bill credit amount
• At what usage is the bill credit applied
• Look for increased prices per kWh at 500 and 2000 kWh levels

Alternatives to bill credit electricity plans

While bill credit plans might seem attractive initially, considering alternative electricity plans that match your needs and usage patterns is crucial. Two popular alternatives include fixed-rate plans and renewable electricity plans. Fixed-rate plans offer price stability and protection from market fluctuations, making them a popular choice for consumers.

On the other hand, renewable electricity plans are an eco-friendly option that can help reduce your carbon footprint. By exploring these alternative plan options and assessing your historical kWh usage, you can make an informed decision about the best electricity plan for your needs, taking into account the energy charge.

Remember, when looking for the right electricity plan, it’s important to consider the following factors:

• Understanding the true costs and potential savings
• Bill credits and incentives
• Your usage patterns and energy needs
• Alternative plan options available

Fixed rate plans

Fixed-rate plans are electricity plans that offer a fixed rate for the duration of the contract, ensuring that the rate you pay for electricity will remain constant, even with market fluctuations. This price stability can be particularly beneficial for consumers who want to avoid unexpected changes in their monthly electricity bills.

However, it’s essential to note that some fixed-rate plans may include termination fees, which are charged by the provider when a fixed-rate electricity plan is cancelled prior to the expiration of the contract.

Reviewing the contract terms and conditions, along with the Electricity Facts Label (EFL), helps understand any potential fees and the contract duration while considering a fixed-rate plan. By doing so, you can ensure that you’re selecting a plan that meets your needs and provides the desired level of price stability.

Renewable electricity plans

Renewable electricity plans are another alternative to bill credit plans, offering electricity sourced from renewable energy sources such as solar, wind, and hydroelectric power. These plans can help reduce your carbon footprint while providing reliable electricity. In addition to the environmental benefits, renewable electricity plans can also contribute to the growth and development of the renewable energy sector, supporting the transition to a more sustainable energy future.

Reviewing the Electricity Facts Label (EFL) and understanding the renewable content of the plan, along with any associated fees or contract terms, is important when considering a renewable electricity plan. By doing so, you can ensure that you’re choosing a plan that aligns with your environmental values and provides reliable electricity at a competitive price.

Is it possible to save money with bill credit plans?

While it is possible to save money with a bill credit plan compared to a simple fixed rate plan, those savings are difficult to achieve in Texas. The wide range of temperatures we experience across the state during the year lead to large variations in usage between cold and warm months, and extra high usage for most of the year thanks to our long and hot summers. If you carefully analyze your past kWh usage and thoroughly understand the plan’s terms, then you can determine whether a plan will help you find lower electricity bills.

Assess your historical kWh usage

Analyzing your historical kWh usage can help determine if a bill credit plan is suitable for your consumption patterns and if potential savings can be achieved. By reviewing your past electricity bills and comparing them to your current usage, you can identify any fluctuations in your electricity consumption and assess whether a bill credit plan is the most suitable option for you.

For example, let’s take the hypothetical example of a bill credit plan offers a $50 credit that applies when you consume between 1000 and 1500 kWh of electricity. If you look at your last 12 months of electricity usage and find that your electricity always fell between 1000 and 1500 kWh, then it’s possible this plan could be a good option for you.

Let’s take a look at another example of a hypothetical bill credit plan that offers a $30 credit when you consume more than 800 kWh of electricity. If you looked at your last 12 months of electricity consumption and found that your usage never exceeded 800 kWh, then you would not want to consider this plan. You’d never receive the credit on your bill.

It’s important to understand how your historical electricity usage impacts whether you’d receive a bill credit, but that’s not the whole story. You also need to compare the price per kWh between plans.

Compare rates and calculate bills

Determining whether you’d receive the bill credit at all is only half of the equation. You also need to factor in differing kWh rates at different levels of electricity consumption.

It is very common for bill credit plans to have a wide range of rates at different levels of usage. For example, we’ve found EFLs that list the following prices:

• 22.4 cents at 500 kWh
• 9.4 cents at 1000 kWh
• 15.5 cents at 2000 kWh

It’s the huge differences in prices per kWh when comparing bill credit plans and simple fixed rate plans that make the bill credit plans more expensive when you pay your monthly bill.

Pros and cons of bill credit energy plans

Weighing the pros and cons is important when considering a bill credit energy plan for an informed decision. The advantages of bill credits include the potential for savings for those with consistent usage patterns and the potential secure a lower electricity bill. However, the disadvantages of bill credits include the risk of higher bills due to varying usage, potential hidden fees, and the complexity of understanding the true costs of the plan.

By carefully evaluating the pros and cons of bill credit energy plans, you can determine if this type of plan is the right fit for your needs. Remember, the key to choosing the best electricity plan is understanding the true costs and potential savings, as well as considering factors such as bill credits, usage patterns, and alternative plan options.

Pros of bill credits

Pros of bill credits include:

• Potential savings for those with consistent usage patterns
• Eligibility for bill credits by maintaining consistent electricity usage within the specified range

These benefits make bill credit plans an attractive option for some consumers.

However, it’s important to note that these potential savings are not guaranteed, and success largely depends on your ability to manage your electricity consumption within the specified range. If your usage falls outside of this range, you may not reap the full benefits of the bill credit, and your overall costs may be higher than anticipated.

Cons of bill credits

Cons of bill credits include:

• Risk of higher bills due to fluctuating usage, hidden fees, and the complexity of understanding the true costs of the plan.
• Amount of the bill credit may not be sufficient to cover the entire cost of the electricity, potentially leading to higher overall costs.

To avoid these potential pitfalls, it’s crucial to review the Electricity Facts Label (EFL) before enrolling in a plan and to assess your historical kWh usage. By doing so, you can ensure that you’re making an informed decision and avoid any surprises on your electricity bill.

Making an informed decision on bill credit electricity plans

By considering factors such as bill credits, usage patterns, and alternative plan options, you can ensure that you’re selecting the most suitable plan for your needs and potentially saving money on your monthly electricity bills. Reviewing the Electricity Facts Label, evaluating your historical kWh usage, and comparing electricity rates among different plans is crucial for the best possible decision.

While bill credit electricity plans may seem like an attractive option, it’s crucial to weigh the pros and cons and consider alternative plan options such as a simple fixed-rate plans. By doing so, you can make an informed decision and choose the best electricity plan for your needs.

Learn more about other types of plans

• Fixed vs Variable Rate Plans: Which is Better?
• Free Nights and Weekends Plans: Are They Worth It?
• What Are Base Charges on Electricity Bills?
• What Are Indexed Electricity Plans?
• Prepaid Electricity Plans: Higher Costs, Higher Risk
• Should You Enroll in an EV Charging Plan?

The post How Bill Credit Electricity Plans Lead to Higher Monthly Payments appeared first on BKV Energy.

For the large majority of customers in Texas, we do not recommend signing up for a free nights and weekends electricity plan. You are likely to save more money on your electricity bill if you enroll in a simple fixed rate plan instead.

If you’ve ever been enticed by an electricity plan offering free nights and/or free weekends, you’re not alone. It’s easy to find yourself wondering if the plan is too good to be true. These plans can be both intriguing and confusing, leaving potential customers like you scratching their heads as they try to determine whether free nights or free weekends electricity plans can actually lead to savings on your monthly energy bills.

• Free nights and weekends electricity plans are a form of marketing that are most often not beneficial to customers.
• Careful evaluation of the plan’s terms and your personal energy consumption is required to determine if free nights and weekends plans offer potential savings, as they generally come with much higher rates during non-free hours.
• Consider a simple fixed-rate plan as an alternative, or significantly adjusting your energy consumption habits, before enrolling in a free nights and weekends plan.

Free Nights and Weekends plans are marketing ploys

Free nights and weekends electricity plans are not designed to help you save money. They are marketing strategies designed to draw in more customers. Due to higher rates during non-free hours, these plans often to lead to higher bills.

Are they really worth it? Likely not. While these plans claim to offer savings if you consume more electricity during the evening and less during the day, it’s very difficult to realize those savings. With free weekends electricity plans becoming more popular, it’s important to know exactly how these plans working before enrolling.

Higher kWh rates during the day lead to higher overall bills

Compared to a simple fixed-rate electricity plan, these plans typically charge higher kWh rates during the day to compensate the provider for the free electricity offered during nights and weekends. The rationale behind the higher rate for non-free hours is to incentivize customers to shift their usage away from peak hours. But making a significant enough change to your energy consumption, such that you actually end up with a lower electric bill, is not possible for the majority of customers.

You could pay 5 -10 cents more per kWh

While you may enjoy free electricity during designated hours, you could end up paying more than you bargained for during non-free hours. Depending on the plans you’re comparing, the difference in the kWh rates between a free nights and weekends plan and a simple fixed-rate electricity plan may be as much as an additional 5 to 10 cents/kWh.

70% of your electricity usage occurs during the day

It’s estimated that the average home consumes about 70% of their electricity during the day. To make a free nights or free weekends electricity plan worth it, you’d need to potentially move 35-50% of your electricity usage to the free hours. In Texas, that will be nearly impossible. Your air conditioning system consumes a very high amount of energy during the day for over half of the year thanks to our long, hot summers.

To determine if a free nights and weekends plan is suitable for you, it’s important to consider how much electricity you use during the day and if the higher rates during non-free hours would offset any potential savings from the free periods. If you find that your daytime usage is minimal, a free nights and weekends plan could be a viable option for you. However, if your energy consumption is high during the day, you would want to explore alternative plans.

Always check the Electricity Facts Label

It’s essential to read the Electricity Facts Label (EFL) before enrolling in any electricity plan to understand the plan’s fee structure, policies, and rates. The EFL provides detailed information regarding the fees, policies, and rates associated with an electricity plan. Look out for the following features of a free nights and free weekends EFL:

• Check the kWh rate during non-free hours and compare to the rate of a simple fixed-rate plan
• Check the time window when you receive free electricity as the length of time may be shorter than you would expect

By examining your past bills and energy consumption habits, you can compare your monthly energy consumption to the information on the EFL and evaluate if the new plan will be cost-effective.

Don’t be swayed by the allure of free electricity without fully understanding the terms and conditions of the plan. By consulting the EFL and assessing your energy usage, you can make a more informed decision about whether a free nights and weekends electricity plan is the right choice for your household.

Alternatives to Free Nights and Weekends

If you’re not convinced that a free nights and weekends electricity plan is the right choice for you, there are alternative electricity plans available from various electricity companies, such as a simple fixed-rate plan with or without renewable energy sources. You can explore BKV Energy’s simple fixed rate electricity plans by searching your zip code on our website.

Fixed rate plans

Fixed-rate plans offer a consistent price per kWh, providing stability and predictability in energy costs. With fixed-rate plans, fluctuations in energy prices are no longer a cause for concern. However, the primary disadvantage of fixed-rate plans is that you may incur a higher cost for your energy if the market rate falls below the rate you have fixed. To secure a lower rate, regularly check pricing from different providers as kWh rates may change often. At BKV Energy, we update our prices on a daily basis.

For customers who prefer a more stable and predictable energy bill, fixed-rate plans can be a more suitable option compared to free nights and weekends plans.

Renewable energy options

Fixed-rate plans can also be fueled by renewable energy sources. If you’re looking to reduce your carbon footprint, these renewable energy plans can be a good alternative to free nights and free weekends plans. Pay close attention to how the percentage of energy that comes from renewable energy sources impacts the kWh rate.

By investing in renewable energy options, you are not only contributing to a cleaner environment, but also potentially benefiting from long-term cost savings. It’s essential to consider your energy usage, budget, and environmental impact when choosing an electricity plan that best suits your needs.

Can you save money with Free Nights and Weekends energy plans?

Is it possible for anyone to save money with a free nights and weekends electricity plan? That depends. Saving money with free nights and weekends energy plans requires careful evaluation of your energy usage and making adjustments to your consumption habits. By tracking your energy usage over several months and changing your electricity consumption habits and schedule, you can maximize the potential savings offered by these plans.

Evaluate and track your usage

Look at the last 12 months of your energy consumption (total kWh usage) from your past energy bills. When looking at your total usage, you can calculate what your bill would be on a free nights and weekends plan and if that would be beneficial for your household.

By gaining a better understanding of your energy usage patterns and how they align with the designated free hours of a free nights and weekends plan, you can make an informed decision about whether this type of plan is the right choice for you.

Change your electricity consumption habits and schedule

Adjust your electricity consumption habits and schedule to take advantage of the free hours offered by these plans. By avoiding using electricity during peak demand times and shifting your usage to the free times of the plan, you can maximize the potential savings. Additionally, consider using energy-efficient appliances and devices, and taking advantage of natural light and ventilation.

By being mindful of your electricity usage and making adjustments to your consumption habits and schedule, you can make the most of the free hours offered by free nights and weekends electricity plans and potentially save on your energy costs.

Pros and cons of Free Nights and Free Weekends

Free nights and weekends electricity plans have both pros and cons, which should be considered before enrolling. Let’s take a closer look at the potential savings and higher rates during non-free hours associated with these plans.

On the plus side, free nights and weekends can offer significant savings for households that use them.

The pros: potential savings

Potential savings technically can be achieved if the majority of your energy usage occurs during the free hours. For the rare consumer, free nights and weekends electricity plans can provide a good deal if they are able to shift their energy usage to designated free hours.

However, it’s important to remember that the potential savings of these plans are difficult to realize depending on your electricity usage and the specific plan you choose. Always evaluate your usage patterns and compare different plans to determine the best fit for your household.

The cons: higher rates during non-free hours

While free nights and weekends electricity plans can offer potential savings, they often charge higher rates during non-free hours. These higher rates can negate any savings if you do not manage your energy consumption carefully during the non-free hours. It is advised to consult your electricity provider or review the terms and conditions of your plan to ascertain the elevated rates during non-free hours.

Understanding the rates during non-free hours and being mindful of your electricity usage during these times is crucial in ensuring that you can truly benefit from the potential savings offered by free nights and weekends electricity plans.

What to know before enrolling in a Free Nights or Free Weekends plan

Deciding whether to enroll in a free nights and weekends electricity plan depends on your energy usage habits, schedule, and willingness to adjust your consumption patterns to maximize savings. If the majority of your electricity consumption occurs during the designated free hours and you’re willing to adjust your habits to take advantage of these hours, a free nights and weekends plan may be a suitable option for you.

However, if your energy usage is primarily during the day or you are unable or unwilling to adjust your consumption habits, it may be worth exploring alternative electricity plans, such as fixed-rate plans or renewable energy options, to better suit your needs and preferences.

Frequently asked questions

Are free nights electricity plans actually free?

The energy you use at night will actually be free (depending on the terms and conditions in the Electricity Facts Label), but you pay a higher rate during the day which may actually lead to a higher monthly energy bill. No free nights plans are completely free.

Are free nights and free weekends electricity plans worth it?

This type of time-of-use plan could potentially be worth it for homeowners or renters that can successfully shift a large percentage of their energy consumption to the free hours, but keep in mind, these plans are designed so that is nearly impossible. Energy companies would not offer these plans if it were easy for all customers to make these changes because they would decrease their revenue and profits.

What time is electricity free for a free nights and free weekends plan?

The time that electricity is free depends on the retail energy provider and the specific terms listed in each Electricity Facts Label. Always check the EFL before enrolling in an energy plan.

What are some alternative electricity plans to consider?

We recommend looking into a simple fixed-rate electricity plan as an alternative to a free nights or free weekends plan.

What are the potential drawbacks of free nights and weekends electricity plans?

Free nights and weekends electricity plans may provide savings if managed carefully, however, higher rates may be charged during non-free hours, which could ultimately result in fewer savings.

Learn more about other types of electricity plans

• Fixed vs Variable Rates: Which is Better?
• How Bill Credits Lead to Higher Electricity Bills
• What Are Base Charges on Electricity Bills?
• What Are Indexed Electricity Plans?
• Prepaid Electricity Plans: Higher Costs, Higher Risk
• Are EV Charging Plans Worth It?

The post Are Free Nights and Weekends Energy Plans Worth It? appeared first on BKV Energy.

Fixed rate electricity plans are a better option for the majority of homeowners because with a fixed rate, you are locked into the same energy charge for the duration of your contract—no matter what happens to wholesale electricity prices. You are shielded from price volatility that occurs due to weather, seasonality, renewables, and other contributing factors.

There are a only few specific scenarios where a variable rate can be more affordable, such as if you are going to be living somewhere temporarily (1-2 months) and it happens to be spring or fall when weather is more mild.

By evaluating your energy usage habits, location, and market conditions, and comparing different providers and plans, you can make an informed decision and select the electricity plan that best suits your lifestyle.

Let’s dive into the pros and cons of fixed and variable rates energy plans so you can make the best choice for your wallet, your home, and your family.

What is a fixed rate electricity plan?

Fixed rate electricity plans are plans with a set rate per kWh that does not change for the duration of your contract, regardless of changes to market conditions like weather and demand. With your price per kWh locked in, you have the ability to predict your electricity costs. This allows you to budget with ease and eliminate financial surprises on your monthly bill. This is precisely what fixed rate electricity plans offer. Fixed rate plans are particularly beneficial for those living in extreme climates or anyone who prefers consistent budgeting.

Fixed rate vs flat rate plans

Fixed rate plans should not be confused with flat rate plans. Flat rate plans offer the exact same price (usually a very high base fee) each month for specific ranges of energy use. For example, if you use 0-500 kWh of energy, your bill may be $99. If you consume 501-1000 kWh, your bill may be $159. And if you were to use 1001-2000 kWh, your bill could be $259. While flat rate plans offer even more predictability, you can often be overcharged for power.

With a flat rate plan, it’s your price per kWh that remains the same at different levels of usage, not the final bill. That being said, it’s important to note that with a fixed rate plan, your bill will change month to month based on your usage. They are generally more predictable and manageable than those experienced with variable rate electricity plans. In essence, fixed rate plans provide stability and predictability in a world where energy prices can fluctuate wildly.

Pros of fixed rate plans

Fixed rate plans offer the following benefits:

• Consistent pricing. By locking in a rate per kWh, you are safeguarded from energy market volatility. Even if market prices soar, your electricity rate remains stable, allowing for more effective budgeting and potential savings over the long term.
• Eliminate the need for frequent comparison shopping.
• No need to constantly monitor energy rates and switch plans or suppliers.
• Save time and effort.
• Provide peace of mind.

Fixed rate energy plans are the best option for most people, but not everyone. If you prefer flexibility and the ability to switch plans when energy rates change, a fixed rate plan may not be the best option for you. Nevertheless, for those seeking stability and predictable costs, fixed rate plans are a solid choice.

Cons of fixed rate energy

While fixed rate plans offer stability and predictability, they also come with some drawbacks:

• Inability to take advantage of lower market rates when energy prices drop. If you’re locked into a fixed rate plan, you might miss out on potential savings during periods of low energy prices.
• Some fixed rate plans offer high early termination fees if you decide to end the contract before its completion. This can be a significant consideration for those who may need to move or switch electricity providers before their contract expires.

At BKV Energy, our early termination fee decreases the longer you are a customer – it’s only fair.

What is a variable rate electricity plan?

Variable rate electricity plans are plans with prices per kWh that fluctuate based on market conditions. This means you could potentially save money during periods of low demand or when market prices drop. However, the rate may also increase if market conditions drive energy prices up.

The main factors influencing variable rate electricity plans are current electricity market conditions. This means that with a variable rate plan, you get to ride the waves of the energy market, potentially benefiting from lower prices but also facing the risk of higher costs during price spikes.

In Texas, it’s very likely that market conditions will push prices higher throughout the same due to intense demand and high production costs across the state.

Pros of variable rates

Variable rate plans offer several advantages, including:

• The opportunity to capitalize on lower prices in the energy market. If energy prices drop, you can enjoy the benefits of lower rates without being locked into a higher rate, as is the case with fixed rate plans.
• Typically no cancellation fees. This provides you with the flexibility to switch providers if a better deal becomes available or if your energy needs change.
• Freedom from long-term contracts. This can be particularly appealing to those who prefer not to be tied down.

However, it’s essential to be aware of the potential drawbacks of variable rate plans. While they offer flexibility and the chance to save money during low-demand periods, they also come with the risk of unpredictable costs and potential budgeting challenges due to market fluctuations.

Cons of variable energy rates

The primary disadvantage of variable rate electricity plans include:

• Lack of predictability. Since rates fluctuate in response to market conditions, it can be challenging to accurately predict your monthly electricity bill. This can make budgeting more difficult, especially for those who prefer a stable and consistent monthly expense.
• Potential for higher rates if market prices rise. While variable rate plans offer the opportunity to save money during periods of low demand and falling prices, they also expose you to the risk of increased costs when market prices climb. This unpredictability can be a significant concern for those on a tight budget or with limited tolerance for risk.

Which type of electricity plan is right for you?

Generally, we always recommend Texans sign up for fixed rate plans due to the stability and predictability that comes with those plans. With our very long and hot summers, you are more likely to spend less on energy with a fixed rate plan.

But, ultimately, the choice between fixed and variable rate electricity plans depends on your personal preferences, risk appetite, and energy consumption habits. If you prefer flexibility and the potential for cost savings during low-demand periods, a variable rate plan may be more suitable.

Both fixed or variable rate plans have their pros and cons, and the best option for you will depend on your unique circumstances and priorities. By carefully considering your energy usage habits, location, and market conditions, you can make an informed decision and choose the electricity plan that best meets your needs.

Learn more about other types of electricity plans

• Free Nights and Weekends: Are They Worth It?
• How Bill Credits Lead to Higher Electricity Bills
• What Are Base Charges on Electricity Bills?
• What Are Indexed Electricity Plans?
• Prepaid Electricity Plans: Higher Costs, Higher Risk

The post Fixed vs Variable Rate Electricity Plans: Which is Best? appeared first on BKV Energy.

While some may work in your favor, others will cost you more in the long run. In this article, we expose common plan Texas energy plan gimmicks and explain why they may not be the best choice for your budget:

• Free Nights and Weekends
• Bill Credits
• Bullseye Plans
• Variable Rates
• Wholesale Rates

Free or discounted nights and weekends

Free or discounted nights and weekends plans sound great in theory, but in practice, they’ll likely end up costing you more in the long run.

While the hours advertised as free or discounted really are, most electric companies charge inflated rates during the day to cover these costs, which can lead to higher bills overall.

Moreover, the definition of “nights” and “weekends” can be deceiving. Many customers are surprised to find out that the “night hours” aren’t always all night, and the “weekend” periods aren’t always the entire weekend, thus limiting the free or discounted time frame.

In other words, your “free” time could be from 7 pm to 7 am or from 11 pm to 5 am, depending on your contract. The time frame specified in your contract might make it more challenging to take full advantage of those discounted hours.  

Who can free nights and weekends rates work for?

These plans might work for those who can shift high-usage activities to the free periods, and who don’t work from home during the week. However, to ensure savings, it’s important to check the terms and be very flexible with energy use.

To save big, these plans require you to change your energy usage habits dramatically. Many Texans sign up for these plans but are not able to realize savings on electricity. In most cases, you are better off with a simple fixed rate plan.

Bill credit plans

Bill credit plans offer credits and rewards for using a certain amount of energy each month. But to make these plans worthwhile, you need to consistently be within a specific usage range. If your usage regularly falls outside that range, the plan could end up costing you more because the baseline rates are often higher.

Also, keep in mind that seasonal changes and extreme weather events can have a big impact on your energy usage and your bill. During low seasons, the average rate of use is around 700 kWh per month, while during peak seasons, it can easily double to around 1400 kWh. This means that customers can end up with a much higher bill when their usage falls outside the specified range due to external factors like weather.

Who can bill credit plans work for?

These plans can work for individuals who consistently use a set amount of energy each month. However, it’s important to keep in mind that external factors, such as seasonal changes and extreme weather events, can greatly impact your energy usage and bill. If your energy usage regularly falls outside the specified range due to these factors, a bill credit plan may not be the best choice for you.

Bullseye plans

With bullseye plans, your average price can vary significantly at different levels of energy usage.

If you use the right amount of energy, you can secure a low energy charge. However, if you go over or under the specified usage amount, you’ll be moved to a higher, more expensive tier. This pricing structure is quite common in the Texas energy market.

The defining feature of a bullseye energy plan is that there is no guarantee on the price you pay per kWh – the price changes dramatically based on your actual energy usage. These types of plans can include varying rates, flat fees, and usage credits.

Who can bullseye plans work for?

Tiered rates can work well for individuals and families who use a consistent amount of energy each month and are able to manage their usage within a specific range. If you can monitor your energy usage and stay within your tier, tiered rate plans can offer price stability and the potential for lower average rates. But keep in mind that shifts in energy usage from lifestyle changes or extreme weather events can push you into the higher-priced tiers, dramatically changing your bill.

Variable rates

Variable rate plans are known for their unpredictability, as they can change based on market pricing, which is influenced by a variety of factors, with demand being the main one, following a typical seasonal curve. Retailers have the discretion to alter pricing without notice, often leading to higher bills for customers.

Who can benefit from variable rates?

While they might work for those who are looking to save on their energy bills during certain seasons, these plans come with risks and aren’t for everyone. For those who are willing to take on more risk and monitor the market closely, variable rates may be worth considering, but it is generally recommended to opt for more stable rate plans to avoid surprises on your energy bill.

Wholesale rates

Real-time wholesale rate plans were common on the consumer Texas energy market prior to the winter storms of 2021, where they were featured as variable rate plans by a number of retail electricity providers such as infamous retailer Griddy. The fallout from the 2021 winter storms lead the Texas Legislature to ban wholesale electricity plans to consumers and small business customers.

While wholesale energy plans may seem to have some benefit for those who consume most of their energy during off-peak hours, these plans were extremely risky for the average user. The real-time rates are highly volatile, luring unsuspecting customers in with below-retail costs during off-season shoulder periods only to find summertime and wintertime price spikes quickly wiped out the savings accumulated over several months.

Which Texas electricity plan is best?

For the majority of Texans, a simple fixed rate energy plan will be the cheapest. You can rely on BKV Energy to offer the most affordable simple fixed rate plans.

We hope this guide has been helpful in showing you how to spot common energy plan gimmicks and find the best electricity rates. And if you’re looking for even more guidance, check out our other post on how to choose an energy provider and the right plan. With our expertise and range of options, we can guide you through this process and help you choose the best (and cheapest) electrical plan for your needs.

The post Texas Electricity Plan Gimmicks Exposed: How to Identify Them appeared first on BKV Energy.