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Unlimited Electricity Plans in Texas and How They Work

Whether you’re new to Texas or have been a lifelong resident, we have some exciting news. For over two decades, the electricity market in Texas has been deregulated, which has led to fierce competition between various electricity companies. The fact that these companies are constantly in search of a competitive edge over one another has led them to try various gimmicks, ploys, and promotions.

As a result, several power companies have started offering an electricity plan with unlimited electricity. While this may sound great, you’re probably wondering how on earth this type of plan works. Won’t the companies go broke if you use too much electricity but don’t get charged for it? If you think this type of plan is too good to be true, you should contact us at EnerGenie. We’ll be able to find out the fine details of the plan and will even sign you up for one if it makes sense.

If you’re wondering what an unlimited electricity plan is and if it’s right for you, you’ve come to the right place.

What is an Unlimited Electricity Plan?

An unlimited electricity plan is precisely what it sounds like. When you sign up for one of these plans, you’ll pay the same amount on your monthly bill regardless of how much electricity you use. Whether you use 10 kWh or 3,000 kWh, your bill will always be the same. This makes for a very predictable expense if you’re concerned about having a budget that doesn’t change from month to month.

How Do Unlimited Electricity Plans Work?

Power companies cater unlimited electricity plans to your individual usage. Here’s what it will typically involve.

  1. You submit usage data from the last year or two of the amount of electricity that you use per month.
  2. The power company will take all of these numbers into account and develop an unlimited plan based on your usage.
  3. Power companies will figure their rates relatively high to compensate for any unexpected usage.
  4. Always remember that power companies aren’t going to lose money to you on your unlimited electricity plan.

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Are Unlimited Electricity Plans Worth It?

The short answer to this question is that unlimited electricity plans definitely aren’t worth it for everyone. Yes, they’re a great way to know exactly how much you’ll spend each month on your power bill, but they don’t necessarily save you money. For example, someone who has used an average of 1,000 kWh per month for the last two years will likely have an unlimited electricity plan based on using 1,200 or 1,300 kWh.

Someone who uses an average of 500 to 700 kWh per month will have their plan figured for 1,000 kWh. Unless you end up using an incredible surplus of electricity, you’re not going to save money with an unlimited electricity plan. Here’s a table showing you what I mean if your unlimited electricity plan charges a flat fee of $160 per month.

Average Monthly UsagePrice per 500 kWhPrice per 1000 kWhPrice per 1500 kWhPrice per 2000 kWh
Average Price per kWh32 cents / kWh16 cents / kWh10.7 cents / kWh8 cents / kWh

As you can see from this table, you’ll only save money if you use well over 1,000 kWh each month. However, according to your monthly energy usage over the last year, you only use an average of 900 to 1,000 kWh. Essentially, you’re getting charged somewhere between 16 and 18 cents / kWh, roughly 5 cents more than the state average.

Is an Unlimited Electricity Plan Right for Me?

You probably think that since you use well over 2,000 kWh of electricity each month, you should sign up for an unlimited electricity plan. You’ll have the cheapest electricity in Texas based on the table above! Unfortunately, every plan is created based on everyone’s individual needs and usage. If you use between 2,000 and 3,000 kWh of electricity, your power company will adjust its flat fee accordingly.

The only time that an unlimited electricity plan is right for you is if you crave the security of knowing exactly how much your electric bill will be each month. It’s also good if you know there will be a few months here and there when you’ll use incredible amounts of electricity. However, on average, you’ll likely spend more per year on an unlimited electricity plan than you will on a different type of plan.

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What Are the Other Types of Electricity Plans?

If you’re on the fence about whether or not an unlimited electricity plan is right for you, here are some of the other options you have to choose from.

  • Prepaid plans.

Prepaid plans are somewhat similar to unlimited ones because you pay the same flat fee at the start of each month. They’re different because you can go over your allotted electricity with a prepaid plan, and you’ll be charged for any electricity past that point.

  • Fixed-rate plans

Fixed-rate plans are where you’re charged for electricity based on how much you use.

  • Indexed plans

Indexed plans are similar to fixed-rate plans in that you get charged for electricity based on how many kWh you use. However, they’re different because the rate changes throughout the day depending on whether energy is in high demand while you’re using it.

  • Tiered plans.

Tiered plans are the polar opposite of unlimited electricity plans. With tiered plans, your rate goes up or down based on how much electricity you use, whereas an unlimited plan has the same flat fee no matter what.

How to Choose the Best Electricity Plan in Texas

Deciding between an unlimited plan versus another type of plan is difficult. What makes it even more complicated is that there are over 150 different REPs in Texas, and many of them offer unlimited plans. If you have your heart set on an unlimited electricity plan, contact us at EnerGenie, and we’ll find the best one for you. We’ll make sure you’re paying the lowest rate possible on your plan so that you can pocket the savings.

If you’re debating between an unlimited plan versus another type of electricity plan, we can help with that as well. EnerGenie will use your zip code and electricity usage history to determine which plan is best for you.

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