Quick Answer
Texas deregulated electricity in 2002 under Senate Bill 7. Today, 140+ providers like TXU, Reliant, and Gexa compete in the ERCOT market. Compare rates on Power to Choose or ElectricRates.org to save 20-40% on your electric bill.
What is Texas Energy Choice?
Texas Energy Choice means you pick who sells you electricity. Your local utility still delivers it.
| What You Choose | What Stays Fixed |
|---|---|
| Retail Electric Provider (REP) | TDU (CenterPoint, Oncor, etc.) |
| Your electricity rate | Power line maintenance |
| Contract length | Meter reading |
| Green energy options | Outage repairs |
Texas opened its electricity market with Senate Bill 7 in 1999, effective January 2002.[1] Since then:
- 75% of Texas residents can shop for power
- 140+ Retail Electric Providers compete for your business
- More choice than any other state
The honest truth? Most Texans don't shop often enough. Those who do shop at the right time find rates 20-40% lower than average. That's hundreds of dollars back in your pocket each year.
How ERCOT and the Texas Grid Works
Texas has its own power grid, separate from the rest of the country. ERCOT manages it.
The Electric Reliability Council of Texas handles about 90% of the state's electric load.[2] That's 26 million customers across most of the state.
ERCOT runs two markets:
| Market | Purpose | Update Frequency |
|---|---|---|
| Day-Ahead Market | Schedule power generation | 24 hours out |
| Real-Time Market | Adjust for actual demand | Every 5 minutes |
Why does Texas have its own grid?
- Started in the 1930s to avoid federal regulation
- Texas sets its own rules
- Can't easily import power from other states during emergencies
2025 Texas Energy Mix:[3]
| Source | Capacity |
|---|---|
| Natural Gas | ~52% |
| Wind | 39,968 MW |
| Solar | 32,729 MW |
| Batteries | 14,137 MW |
Demand keeps rising from data centers, crypto mining, and population growth.
PUC of Texas Consumer Protection
The Public Utility Commission of Texas regulates electric providers and protects consumers.
Every Retail Electric Provider needs a PUC license.[4] That requires financial reviews and ongoing compliance. The PUC also sets rules for how providers must treat customers, what they must disclose, and how they handle complaints.
If a provider gives you trouble, call the PUC at 1-888-782-8477. They investigate complaints and can order refunds. Check the monthly complaint scorecard published on their website before picking a provider.
The PUC is currently reviewing Chapter 25 rules in 2025, updating customer protection standards, disclosure requirements, and enrollment procedures.[5] This means even stronger protections coming for Texas consumers.
Using Power to Choose
PowerToChoose.org is the official, unbiased comparison site run by the PUC of Texas.
How to use it:
1. Enter your ZIP code
2. Pick your usage level
3. See every available plan
Each listing shows the average price at 500, 1000, and 2000 kWh usage levels. Filter by contract length, rate type, and green energy percentage.
| Power to Choose | ElectricRates.org |
|---|---|
| Shows all plans | Shows all plans |
| Redirects to provider | Enroll directly |
| Extra steps | Faster comparison |
Important tip: Always read the Electricity Facts Label (EFL) before enrolling. The advertised rate might require specific usage levels to hit. Low users often pay more per kWh than advertised.
Understanding TDU Delivery Charges
Your Texas electric bill has two parts:
- Energy charges (shoppable)
- TDU delivery charges (fixed)
Transmission and Distribution Utilities deliver electricity through the power lines. They charge the same rates regardless of which REP you choose. TDU charges typically make up about 40% of your total bill.
Current TDU Charges (December 2025):[6]
| TDU | Area | Monthly | Per kWh |
|---|---|---|---|
| Oncor | Dallas-Fort Worth | $4.23 | 5.60¢ |
| CenterPoint | Houston | $4.39 | 6.00¢ |
| AEP Texas Central | Corpus Christi | $5.88 | 5.52¢ |
| AEP Texas North | West Texas | $5.88 | 5.13¢ |
| TNMP | Various | $7.85 | 6.05¢ |
TDU rates reset March 1 and September 1 each year. Your REP has no control over these charges.
How to Switch Electric Providers in Texas
Switching takes about 10 minutes. Your power never goes out.
What you need:
- ESI ID (17-22 digit number on your bill)
- Service address
- Name and contact info
How to switch:
1. Grab your electric bill
2. Find your ESI ID
3. Compare offers on Power to Choose or ElectricRates.org
4. Enroll online or by phone
5. New provider handles everything
Switching fees:
| Fee Type | Amount |
|---|---|
| TDU switching fee | $0 (always free) |
| Early termination | $50-$300 (check contract) |
| Final 14 days | Usually penalty-free |
Timeline:
- Switch happens within 1-2 billing cycles
- Move-in service: 1-3 business days
- Same-day: Available for extra fee
Reading the Electricity Facts Label (EFL)
The Electricity Facts Label is like a nutrition label for electricity plans. Required by PUC rules.[7]
Every plan must show prices at three usage levels:
| Usage | Type |
|---|---|
| 500 kWh | Low usage |
| 1,000 kWh | Average usage |
| 2,000 kWh | High usage |
This matters because many plans have tiered pricing or usage credits that dramatically change your actual rate.
Three sections to check:
| Section | What to Look For |
|---|---|
| Pricing Disclosure | Average price per kWh at each level. Big gap between 500 and 1000 kWh = usage credit |
| Rate Calculation | Energy + TDU + base charges/credits. How your bill is calculated |
| Contract Terms | Length, ETF ($150-200), renewal terms. Watch for auto-renew traps |
Your Rights as a Texas Energy Consumer
Texas law protects electricity shoppers. Know these rules.
Providers must give you the EFL and Terms of Service before you enroll. In writing or electronic format. Don't trust verbal promises.
You cannot be disconnected for non-payment on weekends, holidays, or days when the temperature is forecast above 100°F or below 32°F. That's Texas-specific weather protection.
If a provider switches you without permission (slamming) or adds unauthorized charges (cramming), report it to the PUC. These practices are illegal and the PUC investigates.
Your delivery utility cannot disconnect service during disputes with your REP. Contact the PUC complaint line at 1-888-782-8477 if you're caught in the middle.
Check provider complaint ratios on Power to Choose before enrolling. A high complaint ratio means trouble ahead.
Frequently Asked Questions
What areas of Texas have electricity choice?
How do I find my ESI ID in Texas?
What is the average electricity bill in Texas?
Are there early termination fees in Texas?
What happens if my electricity provider goes out of business?
Can I switch providers if I rent an apartment in Texas?
Looking for more? Explore all our Texas Energy guides for more helpful resources.
About the author
Consumer Advocate
Enri knows the regulations, the fine print, and the tricks some suppliers use. He's spent years learning how to spot hidden fees, misleading teaser rates, and contracts that sound good but cost more. His goal: help people avoid the traps and find plans that save money.
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Topics covered
Sources & References
- Texas Legislature - Senate Bill 7 (Texas Legislature): "Texas deregulated electricity with Senate Bill 7 in 1999, effective January 2002"Accessed Dec 2025
- ERCOT About Us (Electric Reliability Council of Texas): "ERCOT manages about 90% of the Texas electric load, serving 26 million customers"Accessed Dec 2025
- ERCOT Fact Sheet (Electric Reliability Council of Texas): "Texas energy mix includes wind at 39,968 MW, solar at 32,729 MW, and batteries at 14,137 MW"Accessed Dec 2025
- PUC of Texas - Electric Overview (Public Utility Commission of Texas): "All Retail Electric Providers must be licensed by the Public Utility Commission of Texas"Accessed Dec 2025
- PUC of Texas (Public Utility Commission of Texas): "PUC is reviewing Chapter 25 rules for customer protection in 2025"Accessed Dec 2025
- Quick Electricity - TDU Charges (Quick Electricity): "TDU delivery charges as of December 2025"Accessed Dec 2025
- PUC of Texas - Consumer Protection (Public Utility Commission of Texas): "Electricity Facts Labels are required by PUC rules for all Texas electric plans"Accessed Dec 2025
- EIA Texas State Energy Profile (U.S. Energy Information Administration): "Texas is the largest electricity-consuming state, using about 12% of U.S. total electricity"Accessed Jan 2026
- Texas Administrative Code - Public Utility Commission (Texas Secretary of State): "Texas Administrative Code Title 16, Part 2, Chapter 25 governs retail electric provider requirements"Accessed Jan 2026
- ERCOT News Releases (Electric Reliability Council of Texas): "ERCOT set multiple demand records in 2024-2025, driven by population growth and data center expansion"Accessed Jan 2026
- Smart Meter Texas (Smart Meter Texas): "Smart Meter Texas provides customers access to their electricity usage data for all ERCOT utilities"Accessed Jan 2026
- PUC of Texas Substantive Rules (Public Utility Commission of Texas): "REP certification requirements under PUCT Substantive Rule 25.107"Accessed Jan 2026
- PUC of Texas - Customer Protection (Public Utility Commission of Texas): "Texas disconnection protections under extreme weather conditions per PUCT rules"Accessed Jan 2026
Last updated: December 31, 2025
