When should you shop around for electricity in Texas?

Texas is unique not only for cowboys, ranch life, and barbecue, but also for its deregulated energy market. Deregulation has brought with it higher competition amongst the over one hundred retail energy providers (REPs) that are available to Texan homes and businesses, driving down prices across the various energy plans that you can choose from. For this reason, the temptation to shop around is always looming, but it’s important to be strategic when going shopping and learn when the best times are to search for an electricity plan.

Why does timing matter?

Timing is everything, as the age-old adage goes, and the same applies to energy. For one, seasons are big contributors to energy rates. In hot Texan summers, electricity demand is understandably high, with the need for homes and businesses to keep their cool with air conditioning on day and night. This higher demand during the heat of the summer drives prices up across the board, so summertime is not always the best indicator of a competitive energy plan when shopping around for REPs. 

Significant events have significant impacts

While the changing seasons have regular impacts on energy rates, significant events that may occur around us. One reason electricity prices and energy rates may fluctuate is the development of new renewable energy sources, such as wind or solar farms, or the opening of a new electrical plant in your general region, which may cause prices to drop unexpectedly. On the flip side, natural disasters or international events, like hurricanes, oil spills, or even political events like wars can also significantly impact rates and drive prices way up. This is because these events have the potential to significantly disrupt the availability and supply of energy sources around the world. Unfortunately, these types of events are very unpredictable, so it can be hard to plan around, but may explain when you see higher than expected costs on your bill or in plans being offered by other companies – something to think about if you’re in the process of shopping for a new energy plan.

So, when should you shop around for a new plan?

Thanks to energy deregulation, by law most Texans are able to choose their electric company at any time of year. But it can be beneficial to begin your search during the spring and fall months, which are considered off-peak seasons. A proactive approach is always best to make sure the power remains in your hands. Begin by looking at your energy usage levels particularly during these months, and compare rates that are offered by different REPs during these months. Doing so at off-peak seasons is strategic because prices offered during these months, when demand is usually the lowest, will typically be a reflection of the best deals that an energy company can provide year-round. During these months, which fall between September to October, or between March and May, companies may be able to provide enticing offers to rope in new customers, and customers can then take advantage by locking in a fixed rate with them.

Alternatively, if your strategy is less proactive and more by happenstance, you may end up coming across a great rate any time of the year while watching a television commercial or driving by a billboard. If these advertised rates seem significantly cheaper than the one currently being offered to you, no matter what time of year it is, this could be a sign that you’re overpaying. Coming across a low price is definitely a sign to start shopping around. But beware of additional fees that may accompany what looks like a low price, like administrative or activation fees, which may drive your overall cost up. Thankfully, REPs are required to be very transparent with their plans and prices, including all those pesky additional fees, so make sure you factor these in when you make your decision.

What about my current contract expiration date?

Because energy rates are consistently high in the summer, it can be really helpful to be aware of when your current energy contract is set to expire. If your current plan’s expiry date is due for some time in the winter, it may be a lot easier to find an alternative energy company with a competitive rate during these off-peak season months, rather than during the peak summer months when rates are high across the board. 

Tips for shopping around for an energy plan

  1. If your energy rates have spiked outside of peak season or without any significant event, this may be a red flag indicating that it may be time to jump ship.
  2. Ask to see your REP’s year-round energy schedule to determine when to expect your rates to potentially increase.
  3. Set your energy contract to expire in the winter. That way, you can avail of new off-peak season plans that may become available to you when your existing plan expires, rather than scrambling during peak season and finding only high rates.
  4. Make sure you’re not committed to a provider that can raise rates indiscriminately. As the customer, your business is always a priority, and you have the ability to switch at any time if you find yourself dissatisfied. 

What if I’m stuck looking for a plan during the peak season?

Sometimes life happens, and during your process of learning and exploring how energy rates and REPs work, you may not have been able to avoid a peak-season contract expiry, or you’ve found a better plan during the summer months. Fret not! Knowledge is always power. Arrow Energy’s philosophy is to empower our customers to help them make the best and most sustainable choices that work for them, whether their goals are short-term or longer term. If you find that you need to shop around for new rates or REPs, whether during peak or off-peak times, Arrow Energy is here to help. We will walk you through the process and help you find the best deals to save you more money.