Since deregulation began in Texas in 2002, many Texans have had a choice in their electricity provider. In fact, over 85% of Texans live in an area with electricity choice.
What choices did consumers make in 2024? In our first annual electricity shopping review, we’ll reveal price trends, what plans consumers picked, and Texas electricity shopping statistics.
Key Takeaways
An annual review of Texas electricity shopping statistics shows consumers can lower their electricity bill by changing their shopping habits.
- Over 60% of Texas residential consumers picked an electricity contract of 12 months or less in 2024.
- That’s despite longer term contracts offering a savings of 8-10% versus 12 month contract pricing.
- Reasons for choosing a short term contract include habit, uncertainty of switching providers and fear that prices will decline after locking in a rate.
What Electricity Plans Did Texans Pick in 2024?
Choice of electricity plan is always driven by price. Or is it?
When selecting their electricity contract, most Texas consumers selected 12 month fixed rate electricity plans, despite longer term contracts being cheaper.
Of consumers shopping on ElectricityPlans.com, a popular Texas electricity rate comparison site:
- 53% selected a 12 month contract
- 24% selected a 24 month contract
- 11% selected a 36 month contract
- 10% selected a contract term less than 12 months
- 2% selected another term length
This is the case even when a longer term contract offered a lower price per kWh. Reasons for selecting a 12-month contract term include:
- Fear of being locked in to a long term contract if prices decline.
- Uncertainty of switching to a new retail electricity provider.
- Habit; most consumers select a new contract every year.
The most popular type of electricity plan selected in 2024 was a fixed rate plan, followed by a bill credit/tiered rate plan and plans offering free or discounted electricity at certain times. ElectricityPlans recommends fixed rate plans, which we find offer the best value for most consumers.
Long Term Contracts Offer Best Price
Long-term contracts with 24 month terms offered the lowest average prices for Texas consumers in 2024. We expect the same electricity price trend to be true in 2025.
This graph also shows the seasonality of Texas electricity contracts. The best time to shop for a new electricity contract is in the shoulder seasons of spring and fall. Prices typically increase in the summer months and in January.
In January 2021, the average price for a 12 month electricity plan was 10¢ per kWh, based on 1000 kWh a month. In December 2024, the average price was nearly 16¢ per kWh. That’s a a 60% increase in electricity costs over a 4 year period.
