Fixed-Rate
Fixed-rate electricity plans lock in your price per kWh for the duration of your contract.
Variable-Rate
With variable-rate electricity plans, your price per kWh can change every month.
Indexed
In an indexed rate energy plan, the price per kWh is tied to a set market price, such as the price of coal or gas.
Prepaid
Similar to a prepaid phone plan, you pay your energy provider at the start of each month for a predetermined amount of power.
BKV energy’s REcommended energy plans for lubbock
With a fixed-rate electricity plan, the rate you pay per kWh does not change month to month throughout your contract. For example, if you sign up for 12.5¢ per kWh for a 12, 24, or 36 month agreement, the rate will stay the same the entire time no matter what. You’re guaranteed that price.
When it comes time to renew with a new agreement, that price may change based on the current market conditions.
Many fixed-rate plans offer a tiered pricing model based on the amount of energy you consume. For example, if you use 500 kWh the rate may be 12.7¢ per kWh and if you use 1500 kWh of energy the rate may drop to 12.5¢ per kWh. Generally, the more energy you use, the higher your bill, but the lower the kWh rate.
Learn more about the difference between fixed and variable rate plans here.
Watch Out For Gimmicky Fixed-Rate Plans
Bullseye Plans
Bullseye plans are tricky. Energy providers list these electricity plans because it allows them to present a super low kWh price to their potential customers. What isn’t immediately clear, unless you read the Electricity Facts Label, is that price is only guaranteed at a specific level of energy consumption.
The advertised rate will be very low, but if your energy usage doesn’t fall within the correct range, then the price is likely to skyrocket. For example, the advertised rate may be 11¢ per kWh at a usage of 1500 kWh. But if you consume less than1499 or greater than 2000 kWh, the price may jump to 19¢ per kWh.
If your household’s electricity usage is very stable month to month, Bullseye plans can be a great option. We find that for 80% of households, it’s very difficult to hit the Bullseye throughout the year due to the impact of the summer and winter seasons on your energy consumption.
Bill Credit Plans
Bill credit plans can sound like a great deal on paper, but in practice they are difficult to make work. With a bill credit plan, you receive a credit back on your bill to lower the price when you consume a specific amount of energy within a predetermined range.
That range can vary in size and maintaining that exact amount of usage is tough when you consider all of the factors that impact your energy consumption: weather, seasonal changes, appliances, and more. Some studies have found that your energy use can double during the summer months.
Like a Bullseye plan, if your home’s energy consumption is stable throughout the year, the Bill Credit plan can be a solid choice for your electricity.
Discover more about how bill credit plans lead to higher energy bills.
EV Plans
EV plans may be useful if you drive an electric vehicle and charge that vehicle at your home. Plans like these typically offer free or lower energy rates over night from 12AM-5AM (or another similar timeframe) so you can plug in your vehicle and charge at no cost.
What’s the catch? Because they are offering a window of free energy, the rates you’ll be charged the rest of the day will be higher.
If you forget to plug in your vehicle over night, the higher energy rate during the day will lead to energy bills that can be higher versus a regular fixed-rate electricity plan.
Free Nights & Free Weekends Plans
When energy providers offer plans with free nights and weekends, that can sound like a great deal. After all, who doesn’t love free?
When considering a free nights or free weekends plan, make sure that you take a close look at the Electricity Facts Label (EFL) to see when you receive free energy because the window of time may be smaller than you’d assume. We’ve seen in some Free Nights plans that the free “night” only lasts from Additionally, the kWh rate when electricity is not free may be much higher than you’d like to pay for.
Explore free nights and free weekends plans more in more depth.
Base Fee Plans
A base fee electricity plan charges customers a fixed fee regardless of their electricity usage. However, this pricing structure may result in higher fixed costs, limited flexibility for those with variable energy usage, reduced incentives for energy conservation, and the potential for higher overall costs compared to other plans. Careful evaluation of energy consumption patterns and associated costs is advised before opting for a base fee plan.
An Energy plan with low pricing consistency
Variable-rate energy plans, in contrast from fixed-rate plans, do not offer the same rate month to month throughout the duration of your contract.
One month your rate could be 12¢ per kWh and the next it could be 16¢ per kWh. For example, energy costs can rise pretty significantly during the summer months.
Companies offer variable-rate electricity plans also reserve the right to leave you at a high rate, even when they could lower it for you.
BKV Energy does not recommend signing up for a variable rate plan because your bill can vary widely from month to month which can strain your household’s finances. With a fixed-rate plan from BKV Energy, not only are you locked in a low rate for the duration of your contract, but if we are able to reduce your rate, we’ll reach out to you with lower cost alternatives through our Blend and Extend program.
energy plans tied to market rates can cause huge problems
If you were to sign up for an indexed-rate energy plan, your price per kWh would be tied to a market price, like the price of oil, gas, or coal.
They are similar to variable-rate plans because your rate can change every single month.
In 2021, Governor Abbott signed a bill outlawing these wholesale indexed-rate plans after Winter Storm Uri when customer energy bills increased to thousands of dollars.
Pay for your electricity at the beginning of each month
Prepaid electricity plans work very much like a prepaid cell phone plan. At the beginning of each month, you would pay your energy company for a predetermined amount of energy -- which often requires a minimum amount to begin.
Prices are often higher to offset the lack of an early termination fee associated with the plan. Customers can be required to setup autopay which will charge their account every few days. If you turn the autopay off, then you can be charged even more fees.
In some plans, if you don’t use all the energy you paid for it can roll over to the next month. If you go over, you can purchase more.
These plans can be useful for homes on a specific budget, but they are a lot of work to manage and can lead to loads of extra fees and charges.
Dive deeper into the risks and costs associated with prepaid electricity plans.
