Texas Business Electricity: Getting the Most Bang for Your Buck

When it comes to paying for electricity to run a business, it's easy to get burned by overpriced utilities. In fact, the cost of Texas electricity has been cited as among the top problems for small business owners as revealed in a recent survey conducted by the National Federation of Independent Businesses. This is why it's important to know what to look for when you are shopping for a Texas electricity provider for your Texas business.

Here are some things to consider when deciding where to purchase Texas business electricity:

- Fixed vs. Variable Rates. A fixed rate, as the name suggests, means that the per-unit cost of electricity will not change for the duration of the contract term. There are a few exceptions to this rule, but for the most part a fixed rate will keep your energy costs consistent, provided your business doesn't vary much in its energy usage. With a variable rate, the price per unit of electricity fluctuates based on market conditions. A variable rate will at times yield lower prices, and at times will be priced higher than a fixed rate.

So, how can you decide whether a fixed or variable electricity rate is right for you? Generally, a fixed rate is the best option if your business will be entering a long term contract. This is because over time, energy prices will rise according to the cost of inflation, cost of oil, or natural gas among other things. However, your per unit electricity cost will not increase for the life of the contract. In practical terms, this means that you will be paying less than market rate for your electricity as the contract progresses. On the other hand, if market rates drop, you may be locked into a long term contract and unable to renegotiate at a lower fixed rate. If you are considering a shorter term contract, a variable rate may be the way to go. While pricing can be somewhat unsteady, you are likely to get lower prices in the short term than you would with a fixed rate electricity contract. Plus, this allows you the flexibility to enter into a long term contract in the event that electric prices take a drop that warrants locking in a fixed rate.

Contract Terms. Many providers of Texas business electricity offer month-to-month plans, mid-term contract terms of up to three years, and in some cases, even longer term contracts of three years or more. It's important to choose the plan that best meets your needs, and to carefully review all facets of any written agreement. In particular, you should be aware that you may have to pay a cancellation fee if for any reason you terminate a contract before the full term is completed.

Environmental Responsibility. Lastly, many Texas businesses choose to purchase Texas energy created from renewable resources like solar energy, wind energy, geothermal energy, and others. If you are concerned about whether the electricity you purchase is "green" energy, ask your Texas electric provider or review the provider's Electricity Facts Label. By taking each of these factors into account, you'll be in a better position to decide what type of Texas business electricity suits your needs. This will help you save money, understand the terms of your contract, and use resources responsibly.