How month-to-month plans work
Texas retail electricity providers sell two basic plan types: fixed-rate and variable-rate (month-to-month). On a fixed-rate plan, your price per kWh is locked for the contract term. On a variable-rate plan, the price adjusts each billing cycle based on wholesale market conditions.
Month-to-month plans are the most common type of variable-rate plan. You pay for one month of service, and then the relationship renews automatically unless you cancel. The rate you pay next month may be different from the rate you paid this month. The provider sets rates based on their cost of electricity in the ERCOT wholesale market.
There is no contract to sign beyond the initial service agreement, and there is no ETF if you cancel. Most providers require a few days notice before stopping service, but you're not locked in.
What month-to-month plans typically cost
Variable rates are usually higher than fixed rates on average, because you're paying for flexibility. In a stable market, a fixed 12-month plan might price at $0.11 to $0.13 per kWh, while a month-to-month plan from the same provider might run $0.13 to $0.16. The gap varies by market conditions.
During periods of high wholesale electricity prices, such as extreme heat in summer or cold snaps in winter, variable rates can spike significantly. This is the main risk of a month-to-month plan in Texas. The ERCOT grid experiences real price volatility, and variable-rate customers absorb some of that volatility through their monthly bills.
During calm market conditions, variable rates are sometimes competitive with fixed rates. But apartment renters who don't monitor their electricity rate closely tend to overpay on variable plans over time, because the rate changes without any notice requirement beyond what's in the Terms of Service.
Watch for this pattern: Some providers sign customers up at a low introductory rate, then convert to month-to-month at a much higher rate when the promotional period ends. The Electricity Facts Label will tell you whether a plan is fixed or variable and what the initial rate is. Check what happens at the end of the term before you commit.
When a month-to-month plan makes sense for renters
If you're moving into an apartment on a short-term basis and don't know your exact move-out date, a month-to-month plan removes the ETF risk from the equation. You pay a premium for the rate, but you avoid the penalty if your timeline changes.
Similarly, if you signed a fixed-rate plan that's about to expire and you're planning to move in the next few months, switching to month-to-month while you sort out your next steps is a reasonable move. It prevents you from inadvertently locking into another fixed term you'll need to cancel early.
For most renters staying in one place for a full year or longer, a 12-month fixed-rate plan is typically the better value. The rate is lower, the bill is predictable, and matching the contract length to the lease dates avoids the ETF problem entirely.
The lease-aligned alternative
Some Texas apartment properties handle electricity enrollment through the landlord rather than requiring each resident to sign up individually. When that's the case, the electricity contract is aligned to your lease from day one and ends when your lease ends. You don't choose between fixed and variable; the rate and term are set through the property arrangement.
For residents, this approach eliminates both the ETF problem and the rate volatility problem. The contract ends with the lease. There's no month-to-month transition period after your fixed term, no renewal to manage, and no rate change to watch for. The electricity account is simply part of the lease lifecycle.
If you received a sign-up link from your property manager and are currently reading this to understand your options, this is likely the arrangement your building uses. You can contact PowerCord support through the chat on this page with any questions about your specific account.