The Short Answer
Most people should avoid short-term plans. They cost 2-4¢/kWh more than 12-month fixed rates, and the "flexibility" rarely outweighs the extra cost.
But they make sense if: You're in temporary housing for 1-3 months, waiting for your lease to start, or genuinely uncertain about your living situation. Even if you're moving soon, you can usually get a fixed-rate plan and exit without penalty by providing a forwarding address.
New to Texas? Here's What You Need to Know
If you're moving from California, New York, or any other state with a single utility company, the Texas electricity market can feel overwhelming. Here's the key difference:
Other States
- •One utility company (PG&E, Con Edison, etc.)
- •No rate shopping - you get what you get
- •Sign up is automatic when you move
Texas (Deregulated)
- •40+ retail electricity providers compete for you
- •You choose your rate and plan length
- •You must sign up yourself - no automatic service
First-Time Texas Tip
Don't let the complexity push you toward a month-to-month plan "just to be safe." That's the most expensive option. Instead, take 15 minutes to compare rates and lock in a 12-month fixed plan. You can always switch later if you find a better deal.
Types of Short-Term Electricity Plans
1. Month-to-Month Variable Rate
Your rate changes every billing cycle based on wholesale market prices. No contract, no early termination fee, but also no price protection.
2. Short-Term Fixed (3-6 Months)
A fixed rate locked in for 3-6 months. Better price protection than variable, but still more expensive than 12-month plans. May have a small early termination fee.
3. Prepaid Electricity
Pay in advance, use what you paid for. No credit check, no deposit, no contract. Popular with renters and people with credit issues. Rate is typically variable.
When a Short-Term Plan Actually Makes Sense
Good Reasons
- ✓Temporary housing: Airbnb, corporate housing, staying with family for 1-2 months
- ✓Gap between leases: Your new apartment isn't ready yet
- ✓Selling your home: Unsure of closing date, don't want to be locked in
- ✓Market timing: Rates are high, you want to wait for spring/fall drop
Bad Reasons
- ✗"I might move": Fixed plans waive ETF when you move with forwarding address
- ✗"Too confusing": Month-to-month costs more - take 15 min to compare
- ✗"I want flexibility": That flexibility costs $200-400/year extra
- ✗"Rates might drop": They might go up too - fixed rate protects you
How Much More Do Short-Term Plans Cost?
Let's compare what you'd pay over 6 months with different plan types. Assuming 1,000 kWh/month usage in the Dallas (Oncor) area:
| Plan Type | Rate/kWh | Monthly Bill | 6-Month Total | Extra Cost |
|---|---|---|---|---|
| 12-Month Fixed | 12.5¢ | $125 | $750 | Baseline |
| 6-Month Fixed | 13.5¢ | $135 | $810 | +$60 |
| 3-Month Fixed | 14.5¢ | $145 | $870 | +$120 |
| Month-to-Month Variable | 15-18¢* | $150-180 | $900-1,080 | +$150-330 |
*Variable rates fluctuate. Summer months (June-August) typically see the highest rates.
The "I'm Moving Soon" Myth
The most common reason people choose month-to-month plans is "I might move." Here's why that logic doesn't hold up:
Texas Law: Moving Waives Your ETF
Under PUCT rules, Texas electricity providers must waive early termination fees when you move to a new address and provide proof (forwarding address, lease agreement, etc.).
This means: You can sign up for a 12-month fixed plan at 12.5¢/kWh today. If you move in 3 months, you cancel the plan, provide your new address, and owe nothing. Meanwhile, you saved money every month compared to a variable rate.
What If You're Staying in Texas?
If you're moving to another address in Texas (same TDU area), many providers let you transfer your plan to the new address with no penalty. You keep your rate, just update the service address. Check with your provider for their specific transfer policy.
Best Time to Lock In a Rate
If you're on a month-to-month plan waiting for better rates, here's when to make your move:
Best Months to Shop
- →April - May: Demand is low, providers compete for customers
- →October - November: Post-summer, pre-winter lull
These "shoulder seasons" typically offer rates 10-15% lower than summer.
Worst Months to Shop
- →July - August: Peak summer demand = highest rates
- →January: Winter heating demand spikes rates
Avoid locking in during these months if possible.
Strategy for Market Timers
If you're currently on a month-to-month plan in January waiting for rates to drop: Consider a 3-month fixed plan to bridge you to April, then lock in a 12-month fixed at spring rates. You'll pay a bit more for 3 months but avoid the summer rate spike.
Who Should Actually Use Short-Term Plans?
1. Short-Term Renters (1-3 months)
If your lease is genuinely 1-3 months (sublet, temporary work assignment, etc.), a month-to-month plan makes sense. The extra cost is worth avoiding ETF hassles.
2. Home Sellers with Uncertain Closing
If you're selling your home and the closing date keeps shifting, a month-to-month plan provides flexibility. Once you close, you'll move to your new place anyway.
3. People with Credit Issues
Prepaid electricity plans (a type of short-term plan) don't require credit checks or deposits. If you can't qualify for a traditional plan, prepaid gets you power.
4. Strategic Rate Watchers
If rates are currently high (summer) and you believe they'll drop soon, a 1-3 month plan lets you wait for better pricing. But be careful - "rates might drop" is often wishful thinking.
Compare Short-Term and Fixed Plans
Enter your ZIP code to see current rates for month-to-month, 3-month, 6-month, and 12-month plans in your area. We show the total all-in cost so you can compare apples to apples.
Compare rates. Save hundreds.
Frequently Asked Questions
What is a short-term electricity plan in Texas?
A short-term electricity plan is typically a 1-6 month contract that offers flexibility without long-term commitment. These include month-to-month variable rate plans and 3-6 month fixed rate plans. They're ideal for people in transition - renters, movers, or those waiting for better rates.
Are month-to-month electricity plans more expensive?
Yes, typically 2-4 cents per kWh higher than 12-month fixed plans. You pay a premium for flexibility. However, during low-demand seasons (spring/fall), the difference can be minimal. The real risk is summer - rates can spike significantly.
Can I switch electricity plans if I'm moving in Texas?
Yes. Most Texas electricity providers waive early termination fees when you move, as long as you provide a forwarding address. This means you don't necessarily need a short-term plan just because you're moving - you can lock in a good 12-month rate and exit without penalty.
What's the difference between variable and fixed rate plans?
Fixed rate plans lock your price per kWh for the contract term (3, 6, 12, or 24 months). Variable rate plans can change every billing cycle based on market conditions. Fixed gives you predictability; variable gives you flexibility but with price risk.
Should I get a short-term plan if I just moved to Texas?
Probably not. New Texans often default to month-to-month because the market feels confusing, but that's the most expensive option. Take 15-20 minutes to compare rates and lock in a 12-month fixed plan. If your situation changes, you can usually exit without penalty when moving.