Navigating the Texas electricity market can seem overwhelming. Texas electricity rates keep going up. There's a seemingly never-ending list of retail electricity providers with hundreds of plans with complicated terms. Enrolling in the wrong plan could cause sky-high electric bills and a pricey early termination fee.
This comprehensive guide will help you understand how to shop for an electricity plan in Texas, what to consider, the types of plans available, and more.
Before you switch electricity providers, understand your electricity usage. Electricity plans are designed for different levels of energy usage. If you check the electricity facts label for an energy plan you will likely see different rates for 3 different levels of usage.
You will want to find a plan that best fits your usage habits. You can look at past bills to determine your average monthly consumption, or if you want to speed up the process, we can connect with your utility to get your past energy usage and match you with the best energy providers that fit your needs.
There are dozens of energy providers in Texas. While you might be familiar with big names like TXU and Reliant, there are other smaller electric providers that are just as good and can help you save money.
Look at the rates, contract terms, and customer reviews. Since we can fetch your energy usage you are able to shop with full bill estimates. You'll be able to see your future energy costs and find the cheapest electricity rates for your home.
Remember, Texas electricity rates are always fluctuating. The energy provider you shopped yesterday may not be the best deal today.
Always read the terms and conditions carefully. Pay attention to the length of the contract, early termination fees, and any additional charges.
The electricity facts label is a great tool to help you understand the true cost of an energy plan. Make sure you understand it before enrolling.
Electric companies have started using several gimmicks and tricks meant to push consumers into plans that are not in their best interest. They may seem great at first glance, but in reality, you end up paying much more than the average Texas electricity rate.
Here are some of the most common tricks we see.
Some providers will offer low rates on short-term plans, like 3 or 6 months. Then once your contract renews they raise the rate. Did your electricity service change? Nope! The provider just used the initial lower price to get you in the door knowing that you probably wouldn't notice the increase until you were already locked into a plan.
Now you are left with a higher-than-average electricity rate, or forced to pay an early termination fee. We always recommend adding a reminder to your calendar when you sign up for a new plan to check rates before renewing (If you use GridHacker, we'll send you an email reminder as well). These 30 seconds could help you save money in the future.
Energy plans that advertise "free nights" or "free weekends" are called time-of-use plans. While there are certain people that can benefit from time-of-use plans, they are not a good deal for most people.
Time-of-use plans have extremely high electric rates during non-free hours and then discounted or free rates during specific times. But, unless you monitor your usage habits extremely closely, you will end up paying way more than the national average for electricity.
We have a full write-up on these types of plans here: Free Nights and Weekends Electricity: What You Need to Know
Bill credit plans are electricity plans that reward customers with bill credits when their electricity usage falls within a specific range. These credits are applied to your bill, effectively reducing your monthly cost. The goal is to incentivize customers to manage their electricity usage efficiently.
The downside is that the rate these plans advertise assumes you are going to meet the requirements to receive the bill credit.
Here is an example from Gexa Energy:
This plan is advertised as 11.9¢ per kWh. But if you look at the section called "Energy Charge" you will see 18.7¢. That's because they are advertising this plan as if the user has the perfect usage (1,000 kWh) to meet the bill credit requirements.
However, if you had used 2,200 kWh during a warm summer month, your bill would be close to $400 and the rate you actually paid is significantly higher.
The main takeaway: AVOID BILL CREDIT PLANS.
Texas has a variety of electricity providers, each offering different plans and services. Some of the well-known providers include:
You can browse ratings and rates for all energy providers in Texas here.
Texas deregulated its electricity market in 2002, allowing consumers to choose their electricity provider. This competition has led to more options and potentially lower prices for consumers. Here's what you need to know about deregulation:
Shopping for electricity in Texas doesn’t have to be complicated. By understanding your options and what to look for, you can find the best plan to meet your needs and budget.
Consider your usage habits, budget, and preference for contract length. Use comparison tools like GridHacker to evaluate different plans.
Yes, you can switch providers at any time, but be aware of any early termination fees that may apply.
Read the terms and conditions carefully to understand all potential fees, including connection fees, base charges, minimum usage fees, and early termination fees.
Electricity prices are constantly changing. The best thing you can do is watch the market in the months leading up to when you need to renew. This way you can gauge your options and get the best deal.
Many providers offer green energy plans. You can see the exact amount of energy that will come from renewable sources in the EFL.
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