Unlike with long-term plans, monthly, variable rate (no-contract) plans have no cancellation fees. You won’t have to pay a penalty if you decide to take your business elsewhere because you found a better deal. Plus, you won’t be left paying more than you should if the market rate for energy trends down. However, if the market prices rise, you’ll have to pay more than those who are in-contract.

Like we said, fees don’t necessarily make for a bad plan — although it’s worth it to do the math to see if you can save with another provider. For example, compare TXU Energy’s Simple Rate 12 plan with its $9.95 base charge, alongside Direct Energy’s Live Brighter 12 plan with a smaller base charge, and Reliant’s Digital Discount plan with no base charge. We’ll use a Corpus Christi ZIP code and assume 1,000 kWh/month of energy use.
Fixed-rate, long-term (contract) plans provide stability in electricity rates. If market energy costs suddenly trend upward where you live, you can rest assured that you won’t have to pay more out of pocket. However, if you want to switch to a different, lower-cost plan before the end of the contract term, you’ll likely have to pay a cancellation or early termination fee.
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