You want to understand how to shop for electricity in Texas. You’ve probably bounced around to a lot of sites, looking for something comprehensive that answers all your questions on how to shop for electricity and how to save money on your electricity bill.
Well, you found it. Here’s the definitive guide to shopping for electricity in Texas, to answer all your questions in one place.
About Texas Deregulation
Texas has been deregulated since 2002. That means you have the power to choose your electricity supplier.
The local transmission and distribution utility company (TDU) still manages the poles and wires, reads your meter and responds in case of an electrical outage.
You can choose from over 40+ retail electricity suppliers (REP) in the state, offering a variety of plans. With electricity deregulation, you can choose from fixed rate plans, free electricity at certain times, 100% renewable energy, and even prepaid electricity.
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What is the Role of the Public Utility Commission?
The Public Utility Commission of Texas (PUCT) regulates the state’s electric, telecommunication, and water and sewer utilities. The PUCT has played a key role in educating Texans about choosing a competitive Retail Electricity Provider (REP) and being a consumer advocate as it relates to electricity deregulation in Texas.
The PUCT is responsible for:
- Licensing Retail Electricity Providers (REPs) and Aggregators,
- Monitoring competitive activity in the state to ensure a level playing field,
- Approving delivery rates for the regulated transmission and distribution service providers (TDSPs), also knows as the local poles and wires company,
- Regulating ERCOT (Independent System Operator – ISO) with oversight from the Texas legislature, and
- Monitoring and responding to consumer complaints.
What is the PowertoChoose.org (and Why You Shouldn’t Use it.)
The PUCT also manages the state-sponsored shopping site, PowerToChoose.org. This site was intended as an unbiased shopping environment where all retailers could display their offers. However, retailers quickly started playing games with the offers.
You may have shopped the Power to Choose site in the past. However, you quickly found that tiered rates, bill credits and minimum usage fees all came in to play as retailers tried to show the lowest possible price at the 1000 kWh/month level (the default display on Power to Choose.)
You would select a plan that you thought was a good deal, only to find hidden fees that you weren’t aware of. Plus retailers packed the Power to Choose site with multiple offers so you would have to scroll past them to see what else was on the Power to Choose site.
Don’t worry, it wasn’t you, it was them. The Power to Choose became known as the Power to Confuse.
Finally, the PUCT had enough.
As of August 2018, retailers are limited to displaying only 5 plans on the Power to Choose site. Also, the default display is set to exclude plans with tiered rates and bill credits. And in February 2019, a legislator raised the idea that the Power to Choose site should go away entirely, that it’s not useful anymore.
How to Find the Best Electricity Plan in Texas (for you)
Here’s the good news: It’s easier than you think to switch electricity providers.
And ElectricityPlans.com makes it easy to find the best electricity plan for you. Shopping online lets you compare the many electricity plans available in your area so you can narrow down the list to the ones that make the most sense for you.
Here are some steps to take when you are shopping, to find the best electricity plan for you.
- Know your current rate – If you don’t know where you’re going, any road will take you there. So it is with power too. Knowing your current electricity rate helps you understand if you will save or not. Keep in mind that electricity prices overall may have gone up since the last time you shopped. You’ll receive you renewal offer from your current supplier at least 30 days ahead of your contract expiration date and you can use that to shop.
- Select the features – You can shop for electricity based on a variety of criteria, like free electricity at certain times, plans that offer discounts for military, plans that include added incentives. You can also shop by type of plan, such as fixed, variable or index.
- Understand your electricity usage – Some plans include bill credits for specific usage levels, or different rates for different kWh. That’s why it’s important to understand your usage. More on that below.
- Compare Plans – All-in (energy and delivery) average prices per kWh are shown at 500, 1000 and 2000 kWh a month. Shop based on the kWh level that’s closest to your usage.
- Read the fine print – Once you’ve found the plans that interest you, make sure to read the fine print. There could be different requirements to hit that average price per kilowatt hour. Make sure to read the details in the Electricity Facts Label.
Once you are confident that you’ve found the best plan for your household, signing up is as simple as clicking a few buttons.
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Understand Your Electricity Usage (The Key to Electricity Savings)
How much power you really use matters because many electricity plans are formulated based on usage. Here are a some ways to get at your electricity usage:
- Look at Your Bill. Most suppliers include a usage graph on the bill showing historical usage
- Go Online. This is the approach we recommend as the fastest and easiest way (unless you keep 12 months of bills). Don’t have an online account set up? You can call your current provider and have them email you your usage history.
- Check Smart Meter Texas. You can go online to Smart Meter Texas and download a full year of what’s called “15 minute interval data.” It will show how much power you use every 15 minutes of the year. That’s a lot of data points, so make sure you are comfortable with excel!
- Estimate Your Usage. If you have one bill, you can estimate your usage. Texas has 4 months of “summer” bills — June, July, August and September. These 4 bills will be your highest electricity. Your winter bills will be about 70% of the amount of a summer bill So if you can only find a summer bill, multiply that bill by .70 (70%) to estimate your winter season bills. If you can only find a non-summer bill, you can estimate your summer usage by multiplying it by 1.3 (130%).
- Use the Texas Average. You can keep things simple and shop based on average usage. A typical Texas home uses 1100 kWh a month.
Once you know your usage, make sure to review the fine print on each plan to ensure that it’s the best deal for your usage. You can do that by reviewing the Electricity Facts label, or use the Plan Details section in ElectricityPlans.com. We highlight the full details of each plan. And we’ll let you know the type of usage that is a best fit for that electricity plan.
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How to Compare Electricity Plans in Texas
ElectricityPlans was developed to help consumers compare electricity plans in Texas.
Our site includes only vetted, quality providers and plans.
First, we do the leg work for you by thoroughly reviewing the details of every plan we offer.
Second, we focus on accurate, transparent pricing. ElectricityPlans makes it easy to determine each plan’s actual price by displaying the details of the average kWh pricing calculations. (And that doesn’t mean we don’t evaluate all those tiered rates and low priced plans. We just choose not to post plans that are confusing and tricky.)
Third, You’ll find helpful posts to walk you through the electricity shopping process, give you ideas on how you can save on your energy costs, and keep you updated on the deregulated electricity market.
Lastly, you will find advanced shopping tools like this:
1. Rate History by Plan
Curious to see if a plan’s price has gone up or down? For select plans, we show a spark line of the plan’s price history. This is important so you can decide if you should lock in the current price in a long-term contract or choose a month-to-month plan if electricity rates are falling.
2. Accurate Pricing Details (No More EFL Mysteries!)
Want to see exactly how a plan is priced? We comb through the Electricity Facts Label details for you and show the exact pricing for each plan in an easy-to-read format. You can use this information to accurately estimate your monthly bill by doing a simple calculation with your anticipated kWh usage.
3. Simple, Easy Plan Summary
We clearly display each electricity plan’s quick facts in a simple, clean format for easy comparison.
4. Unique Plan Searches
Our unique (and growing!) list of plan searches allows you to filter to the exact group of plans you’re looking for. Are you looking for Prepaid Electricity, Veterans & Active Military plans, or plans with incentives (rebates, gadgets, etc)? Want a 100% Green plan? Interested to see plans with free nights? Use our Plan Features filters to quickly find what you’re looking for.
How Not to Get Tricked by an Electricity Plan (And How we Make it Easier by Breaking Down the Details.)
The Electricity Facts Label (EFL) is designed to help consumers compare electricity rates. Texas is the only state where the electricity providers advertise their rates as an average price per kWh based on specific usage levels: 500kWh, 1000kWh, 2000kWh.
These advertised rates include both electric supply and electricity delivery. These kWh rates are not unit prices but average rates based on a formula that combines both fixed and variable components.
Unfortunately, the EFL has led to a lot of confusion. Plans can look really great on a shopping site when they are displayed at a specific kWh level. But when you get your bill you may find out that you missed some details — like a bill credit or a tiered rate.
That’s why it’s important to understand how to read an Electricity Facts Label (EFL).
ElectricityPlans.com makes it super easy to understand the EFL and not get tricked by an electricity plan.
We read all the details and summarize them in our Pricing Details for each plan. Plus, if there are special conditions in the plan, we highlight those on the plan summary.
Cheap Electricity in Texas (and why you need to read the fine print)
Now that you understand how to read a facts label, we’ll talk about cheap electricity in Texas and what you need to watch out for.
Basically, if it’s too good to be true, it probably is.
When you shop the Power to Choose shopping site, retailers will show rates that are known as “v-shaped plans.” These plans look great at exactly 1000 kWh (the default display for Power to Choose). But if you look at the fine print you will see the truth. We’ve even written articles on how to detect teaser rates.
Luckily if you shop with ElectricityPlans.com you don’t have to worry about that. We read all the fine print so you won’t have to.
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Why Should I Shop for an Energy Plan in Texas
Now, despite all that we’ve said about tricks and games, there are many reasons why you should shop for an electricity plan.
For many electricity customers, the number one reason to switch electricity plans is to save money. It’s simple. A couple of cents a kilowatt-hour may not seem like much, but when you consider how many kilowatt-hours you use every month, those pennies add up on your electric bill. Over the course of a year it can amount to hundreds of dollars in savings.
The second most common reason for shopping is to lock in a fixed rate. Variable electricity rates can be real trouble for electricity customers in months when price fluctuation is dramatic.
If you’ve ever received an electricity bill that was unusually high, it was probably due to variable rate pricing combined with high usage.
Most customers don’t pick variable price electricity plans on purpose. But they end up on a variable month to month plan when their contract expires. It’s important to monitor your contract expiration date to avoid this!
Another reason for shopping is to support renewable energy, like wind and solar. Many electricity customers are looking for more ways to reduce their carbon footprint. With the ability to select your own electricity plan, you have more control over how much of your electricity comes from green energy.
Our final reason for shopping for an electricity plan is the variety of offers you can take advantage of. There are plans like free nights electricity or free weekends electricity, where you can save money by picking a plan
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Five (More) Things to Think About When Shopping for Electricity
We’ve talked about how to find the best Texas electricity plans for you. Here are a few other things to keep in mind when you are shopping.
You can choose from plans that are locked in for years, plans that are renewed each month, or somewhere in between. The longest plans lock in your electricity prices for the length of the contract.
Long term plans can be a gamble because of the variability of the rates and the fees associated with early cancellation. Shorter plans give people like renters more flexibility with some price security, making them an attractive option for many people.
Most consumers pick a term of 12 – 18 months, but don’t be afraid to commit to a longer term if it’s the better price. In fact, due to concerns about supply and demand of electricity for summery 2019, longer term contracts are priced more affordably than 12 month contracts.
What type of plan do you want? There are three main plan types: fixed rate, variable rate, and indexed rate.
- Fixed rate plans have the rate per kilowatt-hour locked in for the length of the contract.
- Variable rate contracts allow the rate to vary based on electricity costs and the discretion of your electricity provider. Variable rates are typically associated with month-to-month contracts.
- Indexed rate plans are another type of variable rate plan. However, they are tied to an index that anyone can view, making pricing accountability a high priority. Time of use plans are also considered index plans. If your electricity provider offers “Free Nights and Weekends,” your electricity bill is indexed against your actual usage during the designated free period.
For more details see Understanding Electricity Plan Types: Fixed, Variable, and Indexed.
Your Credit Score
Your credit score will impact your ability to enroll with the electricity provider of your choice.
In general, most retail energy providers want a minimum credit score of 600. Customers who have a credit score below that may be assessed a deposit. This deposit will be 2 months worth of your estimated electricity bill.
You can have a deposit waived if you meet certain criteria, like being over age 65. You can also have a deposit waived if you provide a letter of credit from your current provider showing that you paid your bill on time. Some providers (Just Energy, Tara Energy, Amigo Energy) will waive your deposit if you sign up for automatic credit card payments.
Some consumers prefer the simplicity of prepaid electricity, also known as Pay-as-you-go electricity. Prepaid plans are plans where you pay for your electricity before you use it by depositing a certain amount of money into an account with your electricity provider.
They don’t generally require any other upfront deposits or credit checks. You won’t get a monthly bill, but instead will get an alert when you are falling below a certain threshold.
You can also set up automatic payment features, so your account is automatically refilled from your bank account whenever it drops below your minimum. Our favorite prepaid plan is the Payless Power SmarTricity Secure Saver Plan. You can read a review of the plan online.
There are multiple plans with free electricity in Texas including:
- Direct Energy Twelve Hour Power
- Reliant Energy Truly Free Weekends
- Reliant Energy Truly Free Nights
- Gexa Energy BOGO (Buy One, Get One)
Depending on your lifestyle and routine, these plans are something that you may want to consider.
Free nights plans are perfect for dual income families where no one is home during the day. And free weekends plans are perfect for people who travel all week for work. Plus, if you are able to shift your electricity usage to the free electricity time periods, you can benefit from a low average electricity price.
Consider Renewable Electricity Options
Although price is a hugely motivating factor with electricity plans, you should also remember to check the green or renewable electricity percentages of plans. Some 100% renewable energy plans are very affordable and will only cost you a small premium compared to traditional energy plans. If a few extra dollars a month is worth it to go green, you should consider 100% renewable energy.
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Free Electricity Shopping Service — Planscan
If you are confused by electricity shopping, you aren’t alone. After all, it’s why we started this shopping site for electricity. We figured if an IT guy and a CPA were confused by shopping for electricity, there must be other people who are confused.
We provide a lot tools to help you shop for electricity. But if you want us to help you shop, we can do that to.
There are paid electricity shopping subscription services out there like Energy Ogre (where you pay $120 a year for someone to shop electricity for you.. yikes!). We prefer to think of ourselves as the Good Energy Fairy. We will shop for you as part of our free electricity shopping service.
Just send us a copy of your most recent bill and let us know your contact information. We’ll evaluate your usage and send you back up to three offers that we recommend based on your usage. This includes a review of electricity plans that we don’t post on our site! It’s personal shopping for your electricity!
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Who are the Best Electricity Providers in Texas?
The best electricity provider in Texas depends on what you are looking for. There is no one best electricity provider in Texas. However, you can search online for electricity plan reviews, check grades in the Better Business Bureau, and check out the Most Trusted Brands Survey from Cogent Reports. Cogent Reports’ Most Trusted brands in Texas include 4Change Energy, Green Mountain Energy. Amigo Energy and Infinite Energy.
Electricity Plans only works with top electricity providers. We also review their plan offerings and only feature select plans that we think have a solid savings opportunity for our customers. You can see a full list of our providers online. We include profiles on each electricity provider.
Moving to Texas – How to Set Up Electricity in Your New Home.
Texas is the fastest growing state in the country, according to the US Census. And the Texas electricity market is very different then other states, where there is just a single utility for each market area.
Don’t worry, we make it easy to set up electricity in your new home.
First, you can talk to the prior owner (or the apartment complex manager) to understand the electricity usage in your new home. Then, shop all plans. If you are renting, you may want to select a 12 month term, or something that goes along with your lease term.
Once you have selected a plan and start enrolling, you will be asked the type of service you want. Typically you will have three options.
- Standard Switch. With a standard switch, you are switching service to a new provider, at a home where you already reside. A standard switch happens immediately, within 1-2 days.
- Self-Selected Switch. With a self-selected switch, you are switching service in your current home. However, you are selecting a specific date, up to 60 days in the future.
- Move-in. Yup, that’s the one to pick. You are moving in to a new home and setting up service in your name. You will be able to pick a date up to 60 days in the future to schedule your move-in.
Depending on the delivery area you live in, there may or may not be a fee to read the meter and start service with the move-in. These are fees from the local utility company, and are passed through at cost on your bill.
Psst… we’ve also written about ways to save on other utilities in your home — cable, internet, cell phone, and water. While you are planning your move, check out these other opportunities to change your home utilities!
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Best Electricity Plan in Texas
There is no one best electricity plan in Texas. Everyone’s usage is different, and everyone’s needs are different.
When you shop online at ElectricityPlans.com, we always highlight our top 3-4 picks as featured plans. These are plans that offer a solid value or a low electricity rate for most people. We will usually feature a 12 month fixed rate plan, a free electricity plan, a prepaid plan, and a 100% renewable plan.
All other plans are sorted in order of lowest average price first. No games here. And we will highlight if there’s a bill credit or tiered rate. Plus in Plan Details, we deconstruct the Electricity Facts Label. And we’ll tell you what usage level this electricity plan is best for.
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Best No-Deposit and Prepaid Electricity Plans
If you are credit challenged or don’t want to provide a social security number to apply for electricity service, you should evaluate prepaid or pay-as-you go plans.
While we represent multiple prepaid electricity providers, we recommend Payless Power SmarTricity Secure Saver as the best prepaid electricity plan in Texas.
Why? You can read our full review of SmarTricity Secure Saver . But in general, it’s easy to start service, you will have a fixed rate prepaid plan (practically unheard of in prepaid), and you will be able to establish a good payment record. That will let you apply for service anywhere and have your deposit waived.
or call them directly to enroll at 1-866-934-3451
Texas Electricity Rate Trends
We predicted that electricity prices would rise in 2018. Guess what? They did.
We are projecting that 2019 Texas electricity prices will be higher. Guess what? As of March 2019, it’s already happening.
There are many reasons why electricity prices in Texas will rise this summer. Major reasons include the shutdown of coal-powered generation and projected super-high demand this summer. You can read the specifics in our 2019 Texas electricity trends.
If you have a contract that ends in the summer time (June/July) we recommend that you shop 60 days before your contract expiration. Most retailers will let you pick a self-selected start date. Pick a start date that’s 10 days before your contract end date. That way you don’t pay a termination penalty, and you can start your new rate early.
If you have a contract that ends in August, stay put. Shop in August, or wait it out til September. If we don’t have a hot summer, prices may start to full in August. And they typically drop like a rock in the 2nd week of September. (Note: this is all based on what “usually” happens, but we don’t have a crystal ball and can’t guarantee it.)
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Compare Business Electricity Rates in Texas
Business owners can also shop for commercial electricity in Texas.
Most business owners go with fixed electricity rate plans, but there are also time of use plans that are great for restaurants and others that use power at night, when electricity is cheaper.
We have a full series of articles on how to shop for business electricity rates and how to build your business credit so you don’t have to pay a deposit. And yes, there are prepaid business electricity plans too.
If you are a business spending under $5,000 a month on electricity, you can find business electricity rates online and easily sign up with a business electricity supplier.
Frequently Asked Questions About Switching Electricity in TX
We’ve answered some of the most commonly asked questions about switching electricity providers below:
- Does it cost anything to switch electricity providers?
There won’t be a cost to switch to your new electricity provider if you’re at the end of your contract term. However, your current provider may charge cancellation fees for early contract termination, so check your existing contract before you switch.
- What if I have to move before the end of my electricity contract?
If you’re moving within the service area of your electricity provider, you can often transfer your service plan to your new address. When you’re moving out of the service area, many electricity providers will work with you. You’ll simply need to explain the situation to a customer service representative. If you can prove that you are moving with a valid change of address, the plan’s early cancellation fees are waived.
- Can I change my mind after I switch electricity providers?
For a switch, you have 3 days to change your mind, called the right of rescission. During these 3 days, you can terminate the new contract with no penalty.
- How long does the electricity switching process take?
Once you’ve chosen your plan and signed up with a new electricity provider, it will take less than 3 days to become active. In most circumstances the enrollment switch happens the same day in Texas.
- Do I have to notify my current electricity provider that I’m switching?
Absolutely not. Your new electricity provider will take care of everything behind the scenes on your behalf. All you have to do is pay the new bill when it arrives.
- What if my electricity provider goes out of business? Will I lose electricity?
You will not lose electricity if your new provider were to go out of business. The electric utility in your area is required by law to continue providing power to your home. Your electricity provider will change to your utility’s provider of last resort (POLR). Every utility has a POLR and they act as your electricity provider at least temporarily. You can choose to stay with the POLR or you can switch to a different electricity provider all over again.
Lights Out? Contact Your Local Utility
If your lights are out because you received a disconnection notice from your electricity provider, call them immediately to make a payment arrangement and get your lights back on.
But, if your lights are out because of a storm or other reason, you will want to contact your local utility company.
You can find your local utility’s phone number on your bill, or check the list below:
- AEP Texas Central (Corpus Christi, Brownsville, South Texas) 1-866-223-8508
- AEP Texas North (West Texas) 1-866-223-8508
- Centerpoint Energy (Houston area) 1-800-332-7143
- Oncor (DFW and scattered Central Texas) 1-888-313-4747
- Texas New Mexico Power (Friendswood and scattered Central/North Texas) 1-888-866-7456