For homes · Texas plan guide

Fixed vs variable electricity rates in Texas

Know what can change before choosing a rate type. Compare fixed and variable plans, including their pricing rules and the tradeoffs for your household.

By Voltcheckr Research · Published Aug 5, 2026 · Updated Oct 23, 2026 · 9 min read

What changed: Updated the Home and comparison links to our residential homepage.

See Houston plans priced on your usage →

Texas defines plan types in 16 TAC §25.475, the PUCT's disclosure rule. Every plan's Electricity Facts Label (EFL) and terms of service must name the product as a fixed rate product or a variable price product, and a provider may not market a plan as fixed unless it meets the rule's definition.¹

A fixed rate's price, including all recurring charges, stays the same through the term. The rule lets it vary from the disclosed amount solely to reflect three kinds of change:^1,7,8

• Actual changes in TDU charges, the delivery charges set in your utility's tariff under PUCT oversight. In Houston, that utility is CenterPoint.
• Changes to ERCOT or Texas Regional Entity administrative fees charged to loads.
• Changes from federal, state or local laws that impose new or modified fees or costs on the provider beyond its control.

Ancillary service charges are not on that list. The rule bars passing changes in them through on an existing contract unless the PUCT expressly designates a type as beyond the provider's control.¹

Outside those exceptions, a provider may not change the price or the length of a term contract while it runs. When an allowed change reaches your bill, the bill must show it on a separate line or carry a notice that the amount may include price changes allowed by law or regulatory actions.¹

A fixed rate fixes the price, not the bill. Your bill still rises and falls with the kWh you use.

The rule defines a variable price product as one whose price may vary by a method the provider sets, including a price capped at a set percentage above the previous month's. For homes, a variable plan can only be a month-to-month contract.¹

A price change made under the plan's EFL needs no advance notice. Instead, every residential bill on a variable plan must say how to find the price for the next bill, and the provider must post the current price and a one-year price history on its website and by phone.¹

The EFL shows the price for the first billing cycle only, with a bold notice that the price may change in later months at the provider's sole discretion, or by no more than a stated percentage.¹

You may already be on one. If a fixed contract ends and you take no action after the final notice, your provider serves you on a month-to-month product whose price may vary between billing cycles.^1,7

Texas rules bar offering indexed products to homes: wholesale indexed products since September 1, 2021, and every indexed product since February 1, 2022. An indexed product's price follows a pre-defined formula based on public indices, and the ban covers retail electric providers, aggregators and brokers alike.¹

The PUCT gave its reason when it adopted the ban in December 2021: an indexed price on any future date is unknown at the start of each billing period, can fluctuate unpredictably, and is tied to metrics the customer cannot see at enrollment.²

The same order named what each remaining type protects: the price certainty of fixed rate products, and the lack of early termination fees or long-term commitments of variable price products.²

Features such as time of use, nights and weekends, seasonal or tiered rates and credits can be built into either type, and prepaid service can run on either. The EFL names which one.^1,2,4

A fixed rate suits a household that wants the same price per kWh in every billing period of a set term. The PUCT notes it may help your household budgeting, and the rule backs that: outside the listed pass-throughs, the price holds until the term ends.^1,4

It suits less well a household that may need to leave early for a reason other than moving. A fixed plan can carry an early termination fee, which its EFL must disclose. And if market prices fall, Power to Choose notes you may have to wait until the contract ends to get a lower price.^1,5,6

Moving is not a reason to rule one out. The rule bars an early termination fee when you move, give a forwarding address and, if asked, reasonable evidence that you no longer live at the address.¹

A variable rate suits a household that needs to be able to leave in any month without a fee, for example during a short stay or while comparing plans. The reason is the rule: a home's variable plan is month to month, and a month-to-month contract carries no termination fee.¹

It suits less well a household that needs a predictable price. The price can change each billing cycle, by a method the provider sets, without advance notice. Power to Choose notes both sides: a variable rate can let you benefit from falling market prices, and it carries more risk of higher rates when electricity prices spike.^1,5

Our arithmetic on EIA's monthly data shows the statewide average price Texas homes paid per kWh moved both ways from 2015 to 2024. The change from one year to the next ran from a 4.9% fall in 2016 to a 13.7% rise in 2022.⁹

It is an average, not a plan price: it moves with usage as well as with prices, and past moves do not tell you the next one.

What it shows for the choice: a fixed rate holds its price through moves like these, in either direction, apart from the listed pass-throughs, until its term ends. A variable rate follows the method its provider sets, which can move more or less than this average.¹

1. 1

   Find the type of product

   Every EFL must say whether the plan is a fixed rate or a variable price product.

2. 2

   Read whether the price can change

   The EFL's disclosure chart answers "Can my price change during contract period?" and, if it can, how it will change.

3. 3

   Find the term and any termination fee

   The EFL must state the length of the term and any early termination penalty. A month-to-month plan carries none.

4. 4

   On a variable plan, read the price history

   The provider must post the current price and the past year's prices on its website and by phone. The EFL says where.

5. 5

   Check your current bill

   A fixed-rate bill shows the date your fixed rate expires in bold, underlined type. A variable-rate bill says how to find next month's price.

Questions? Call (469) 708-9311