Long-Term Electricity Plans in Texas: The Bread and Butter of Energy

Long-term electricity plans, typically 12, 18, 24, or even 36 months promise price stability and peace of mind. But like anything, there are a few things to keep in mind before you sign up. 

Texas electricity rates vary throughout the year based on market conditions, weather, and seasonal demand. Understanding your options when you're shopping for electricity helps you make informed decisions about your energy choice. In this guide, we explain how long-term plans work, what to consider when choosing a contract length, and how to find the best plan your lifestyle.

What Is a Long-Term Electricity Plan?

The Lowdown on Long-Term Contracts

A long-term electricity plan in Texas typically lasts for 12 months or longer. Common durations include 12-month, 18-month, 24-month, and 36-month plans, with 12-month contracts being the fan favorite among Texans.

Most long-term plans have a fixed rate throughout the entirety of your contract, meaning your price per kilowatt-hour (kWh) stays locked in. This protects you from market ups and downs, seasonal rate spikes, and unexpected increases. That predictability is what makes long-term fixed-rate plans a top choice for millions of Texans.

Why Long Contracts Are Still the Go-To

Long-term electricity plans are one of the most popular choices for Texas residents, and for good reason. With the volatility of Texas weather and the energy market, variable-rate plans showed how quickly electricity prices can spike during crises, causing even more shoppers to gravitate toward the stability of fixed-rate long-term contracts.

Homeowners, in particular, love the "set it and forget it" nature of these plans. Locking in a rate staves off the need to shop for electricity for a year or longer, making it a terrific option for those looking for long-term peace of mind. Plus, most competitive rates and promo offers in the Texas market are reserved exclusively for 12-month or longer contracts.

Pros of Long-Term Electricity Plans

Lock in Your Rate and Breathe Easy

Locking in a rate for the long-term means families can budget with peace of mind knowing their electricity costs stay predictable month over month.

So when the Texas weather gets a little crazy (as most Texans know it does), you don't have to worry about your rate jumping. Your total bill will still change based on how much electricity you use, but your per-kWh rate stays locked in no matter what.

Less Time Shopping and Comparing

Unlike short-term plans that require shopping and comparison every few months, long-term contracts mean you only need to shop for electricity once a year (or less). This saves time and mental energy, allowing you to focus on other things.

For busy professionals, parents managing household responsibilities, or anyone who simply doesn't enjoy dealing with utility management, this convenience factor alone makes it the best fit. 

Access to Better Rates and Sweet Deals

Retail electric providers often reserve their most competitive rates and best promo offers for customers willing to commit to longer contracts. You'll sometimes find that 12-month and 24-month plans come with lower per-kWh rates compared to shorter 3-month or 6-month options.

Also, many providers offer sign-up bonuses, bill credits, or other incentives exclusively for long-term plans. These promo benefits can add real value beyond just the base electricity rate.

No Renewal Stress During Peak Seasons

With a well-timed long-term contract, you can skip the need to renew during high-price seasons. For example, a 12-month plan started in April will renew in April the following year, giving you another great rate during the spring shoulder season rather than being forced to shop during expensive summer or winter months.

Cons of Long-Term Electricity Plans

Early Termination Fees and Contract Flexibility

Most long-term electricity plans include an early termination fee (ETF) if you cancel your contract before it expires. These fees typically range from $150 to $300 or more, depending on the provider and remaining contract length.

Life circumstances can change unexpectedly. A new job, family changes, relocation, or other events might affect your housing situation. If you need to move or switch providers mid-contract, you'll be responsible for the ETF unless specific conditions apply.

Most providers allow you to transfer your contract to a new address within their service area without penalty. However, moving outside their service territory typically requires paying the termination fee. Some providers waive ETFs if you're moving out of their service area, but policies vary by company. Make sure you read the fine print on your contract before making any decisions.

Octo Tip: We recommend aligning your electricity plan and contract duration with your expected move date. This way, you won't have to worry about early termination fees.

Missing Out on Better Rates

Energy markets are dynamic, and rates can drop significantly during certain periods. If you're locked into a long-term contract when rates decline, you'll continue paying that rate while shoppers secure better deals.

Similar to the stock market, energy rates go up and down, and it is up to you to lock in. Trying to time the absolute lowest rate doesn't always pan out, so it's always best to grab a good rate when you find one that works for you.

Octo Tip: If you are looking for a better rate, give your REP a call to see if you can secure a new plan with a new rate with them!

The Ideal Customer for Long-Term Electricity Plans

Homeowners with Long-Term Stability

Long-term electricity plans are a perfect match for homeowners who plan to stay in their current place for the foreseeable future. If you own your home and have no plans to move, a 12-month or 24-month contract commitment aligns with your housing situation. Renters or individuals in transition can also benefit, but they will need to carefully review the fine print of their plans before signing up. 

Budget-Conscious Households

Texans who prioritize predictable monthly expenses find tons of value in long-term fixed-rate plans. The ability to estimate electricity costs for an entire year supports financial planning and budgeting.

This is great for folks on tight budgets where bill increases could create financial stress. Knowing your rate won't suddenly spike during an extreme weather event provides important peace of mind.

People Who Value Convenience

Not everyone wants to manage their electricity contract throughout the year. If you prefer making a single decision and then not thinking about your electricity plan for 12 months or longer, long-term contracts are ideal.

The "set it and forget it" nature of these plans reduces mental load and frees up time for other priorities. For busy professionals, parents, or anyone with demanding schedules, this convenience is a game-changer. 

When to Consider Shorter Terms

Long-term plans aren't ideal for everyone. Renters with uncertain lease timelines, people planning moves in the near future, military families subject to relocation orders, or active market monitors who enjoy frequent shopping should typically consider shorter-term options instead.

Tips for Success with Long-Term Electricity Plans

The best time of year to sign a long-term electricity plan is during spring (April-May) or fall (September-October) when rates are typically lowest. Locking in a great rate during these shoulder seasons protects you from the higher prices during peak summer and late winter months.

If you can time your new contract start date just right, you could save 1-2 cents per kWh, which adds up to hundreds of dollars in savings over the course of a year!

Thoroughly Review the Electricity Facts Label

The Electricity Facts Label (EFL) contains important information about plan pricing, including usage credits, minimum usage requirements, base charges, and potential fees.

Pay attention to how the plan pricing works at different usage levels. Many plans advertise rates that only apply at specific energy usage amounts (like 1,000 kWh or 2,000 kWh), with higher rates for lower usage.

Understand the Early Termination Fee

Before signing, understand your plan's early termination fee and the circumstances under which it applies. Some providers charge a flat fee, while others calculate it based on remaining contract months. In most cases, ETFs go up in price as the contract duration increases. So be sure to check that out before you lock in.

Also, check whether the ETF is waived if you move out of the service area, and understand the documentation needed to prove your move if that happens.

Set a Renewal Reminder

Even with a long-term plan, you'll eventually need to renew. Set a calendar reminder for 30-45 days before your contract expires to give yourself time to shop for your next plan without rushing.

Many let their contracts expire and end up rolled onto a variable-rate plan simply because they forgot about the renewal date. A simple calendar reminder helps to prevent this mistake because those variable rate plans can be expensive if you’re not mindful.

Conclusion

Long-term electricity plans in Texas are about stability. For homeowners, families wanting predictable bills, and anyone who values convenience over rate shopping, long-term plans are genuinely awesome. They lock in your rate, protect you from market craziness, and let you focus on everything else in life. 

Ready to lock in a great fixed rate and stop worrying about your electricity bill? Compare long-term electricity plans in your area today and discover the peace of mind that comes with a fixed rate. Shop our plans to see what's available and find one that matches your needs for the year ahead.