The average household in Houston could save $468 annually by switching electricity providers. An average household in Dallas could save $372 annually by switching electricity providers.1 How much can you save by switching? We do the math for you.
Research Show Texans are Likely Overpaying for Electricity
A Texas power company recently surveyed nearly 7000 consumers about their electricity shopping habits and reviewed their bills. The findings showed that:
- Texas consumers are loyal. 60% of consumers stayed with the same power provider each year, with 40% comparing prices at each contract expiration. 2 3
- Loyalty doesn’t pay. The 60% of customers who were loyal to their power providers paid an average of 16¢/kWh, compared to 14.5¢/kWh for those who shopped their contract renewal. That’s a loyalty premium of 1.5¢/kWh.
- Big name brands charge more. Customers with the six largest retail electricity providers (those with over 100,000 customers) paid an average of 16.4¢/kWh. Those with the six smallest REPs (those with less than 50,000 customers) paid an average of 13.9¢/kWh. That’s a brand premium of 2.5¢/kWh.
The numbers prove what we’ve been saying for years, based on our 30+ years of industry experience: Your best bet for electricity bill savings is to compare prices every time your contract expires.
How Much Can You Save By Switching?
Your savings will depend on your current electricity rate and your usage.
Calculating Your Savings
Here’s the savings formula broken down:
Monthly Savings = (Current Rate − New Rate) × Monthly kWh Usage − Monthly Fee Difference.
Approximate Annual Savings= Monthly Savings × 12.
The math is simple once you know the inputs. But that’s the problem. Consumers compare their current rate vs. advertised rates at 500, 1000 or 2000 kWh, instead of comparing effective rates and real bill costs. Many customers don’t know their energy rate because it’s buried in the bill details. And, if your current plan has bill credits or tiered rates, you need an advanced math degree to figure it out.
And that’s exactly the problem that ElectricityPlans solves for you.
ElectricityPlans Does the Math For You
ElectricityPlans.com’s BillSmart™ tools, including the Low Bill Finder and Calculator, use your actual kWh usage to calculate your estimated bill under each available plan. You’re comparing estimated bills at your specific usage level, not advertised rates that may not apply to your situation. This is a simple and easy way to estimate how much you can save by switching your electricity plan.
Time needed: 5 minutes
How to Calculate How Much You Can Save by Switching Electricity Providers
- From your current bill, find your average price per kWh.
Your average price per kWh includes your energy rate per kWh, any bill credits or base charges, and all delivery costs. That’s the best apples-to-apples comparison point.
- From your current bill, find your usage.
Your usage is the total amount of electricity you’re being billed for.
- Visit ElectricityPlans.com and enter your usage.
Enter your zip code, then the kWh usage from your current bill.
- Compare what you paid vs. what you could have paid.
ElectricityPlans’ BillSmart Calculator shows your effective rate and estimated bill for each plan, based on your actual usage level.
- Calculate your savings opportunity.
Calculate how much you could have saved by comparing your bill total vs. the estimated bills for each provider. Take your bill amount and subtract the lowest estimated bill to find your maximum savings opportunity
- Multiply by 12.
For a quick annual savings estimate, multiply that number by 12.
Compare Rates to See If You Can Save by Switching
Here’s a recent example of a customer who contacted us:
| Switch & Save Example | |
|---|---|
| Location | Fort Worth, TX |
| Date Performed | July 30, 2026 |
| Average Price per kWh | 18.3¢/kWh @ 2,748 kWh |
| Lowest Available Rate | 12.4¢/kWh @2,748 kWh |
| Customer Overpaying by | 5.9¢/kWh (18.3¢ - 12.4¢ ) |
| Savings Opportunity on this bill | $162/month ($.059 X 2,748 kWh) |
| Estimated Annual Savings | $1,945 ($162 X 12) |
| Early Termination Fee | -$250 |
| Total Switch & Save | $1,695 |
Obviously your savings will depend on what you’re currently paying and your usage. But we can all use any savings we can get!
Switching Mid-Contract? Factor in Your Early Termination Fee!
If you decide to compare electricity rates and switch mid-contract, make sure to factor in your early termination fee (ETF). ETFs for Texas electricity average $150 for a one year contract and $250 for a two year contract.
Check the electricity facts label for your current contract to find out your ETF. Then take your estimated savings and subtract your ETF. Is it still worth it to switch? Only you can decide if switching is worth it.
🔌Pro Tip: There are companies that will cover your early termination fee when you switch. Base, Rhythm Energy and Constellation will reimburse up to $150 of your early termination fee.
On a Month to Month Rate? You’re Paying 50% Too Much
If your Texas electricity contract expires and you do nothing — you don’t renew, you don’t switch — you’re paying the month-to-month default rate, sometimes called a “holdover rate.” If that’s you, you’re paying up to 50% more than you could be paying.
We examined the June 2026 holdover rates for CenterPoint from 4 large brand-name companies. Then we compared that rate to the lowest basic fixed rate currently available on ElectricityPlans.com. All rates were compared based on 1000 kWh/month usage.
| Company A | Company B | Company C | Company D | |
|---|---|---|---|---|
| Holdover Rate | 20.6¢/kWh | 22¢/kWh | 24.5¢/kWh | 22.9¢/kWh |
| Fixed Rate | 12.2¢/kWh | 12.2¢/kWh | 12.2¢/kWh | 12.2¢/kWh |
| You're Overpaying by: | 8.4¢/kWh (40%) | 9.8¢/kWh (44%) | 12.3¢/kWh (50%) | 10.7¢/kWh (47%) |
Average Electricity Rates in Texas (Updated Daily)
- Average electricity rate in AEP Texas Central: 14.90¢ per kWh
- Average electricity rate in AEP Texas North: 16.22¢ per kWh
- Average electricity rate in CenterPoint Energy: 14.46¢ per kWh
- Average electricity rate in Lubbock Power & Light: 14.96¢ per kWh
- Average electricity rate in Oncor: 15.27¢ per kWh
- Average electricity rate in TNMP: 16.55¢ per kWh
Conclusion: The Bottom Line on Switching Savings
How much can I save by switching electricity providers? It depends on your state, your usage, and your current rate. Texas households with average to above-average usage have the most upside, with real annual savings of $300 to $500. Follow the steps above to calculate how much you can save by switching from your current electricity provider.
Frequently Asked Questions:
It depends on your current rate, your usage, and which plan you switch to. Someone paying 15¢/kWh might save $30/month by switching to a 12¢/kWh plan if they use 1000 kWh a month. If you’re on a low rate, you might save nothing. The only way to know your savings is to compare your actual bills against specific offers, based on what you actually use. ElectricityPlans’ BillSmart tools were created to do exactly that.
You’re never stuck in a contract with your provider, but you do have to check your contract to find out your early termination fee (ETF). ETFs for Texas electricity can be $150-$250 or more, depending on your contract. You can still switch. Just evaluate your total savings opportunity and adjust by how much it will cost you to get out of the contract.
Yes, you can switch your electricity provider anytime in Texas. Just be aware that you may have to pay an early termination fee (ETF) to do so, depending on your contact. To avoid an ETF, switch to your new provider and plan no more than 14 days before your contract expiration date. Before switching to a cheaper plan, run the numbers and see if the savings is enough to cover the ETF.
Yes, your provider will apply the deposit to any unpaid balance on your account, and refund the remaining balance, plus interest, usually within 4-6 weeks.
To compare electricity rates vs. what you’re currently paying, look at your bill. Find the total usage for the month and the average price per kWh. The average price per kWh includes your energy rate, any bill credits or base charges, and your delivery fees. Then use a comparison tool like ElectricityPlans to see rates available based on that same usage level. To get an accurate comparison, you must compare based on the effective rate for your actual usage, not the advertised rate at 1000 kWh.
Retail electricity providers often offer their best pricing to new customers. That’s confirmed by data that shows Texans that don’t switch pay a loyalty premium of 1.5¢/kWh vs. what they could be paying. Comparing rates and switching your electricity provider helps ensure you’re getting the best price available.
References:
- Estimated savings based on 16 cent rate compared to average basic fixed rate of 12.1¢/kWh in Houston and 12.9¢ in Dallas as measured on ElectricityPlans.com on 7/30/2026. Savings and average rates assume 1000 kWh/month and 12,000 kWh/year. ↩︎
- Survey data from Base Power May 2026 Bill Study ↩︎
- ElectricityPlans’ 2026 Electricity Consumer Satisfaction Survey showed a more active comparison shopping market, with 50% of respondents saying they check electricity rates every time their contract expires, or at least once a year. But nearly 40% either stay with the same provider or only shop when their bill has increased significantly. ↩︎
