How to Choose an Electricity Plan in Texas

1. Know Your Usage

Check your past bills for monthly kWh usage

Most Texas homes use 1,000-1,500 kWh/month. Summer usage is typically 30-50% higher than winter. Find your average and peak months to compare plans accurately.

2. Compare All-In Rates

Look at total cost, not just the energy rate

The advertised 'energy rate' excludes TDU delivery fees (typically 5-6¢/kWh). Always compare the EFL's average price at your usage level for true cost comparison.

3. Read the EFL

Check the Electricity Facts Label for hidden fees

Look for base charges, minimum usage fees, usage tier penalties, and early termination fees. The EFL shows prices at 500, 1000, and 2000 kWh.

4. Match Contract Length

Choose a term that fits your situation

12-month contracts balance rate stability with flexibility. Longer terms (24-36 months) may offer lower rates but higher ETFs. Month-to-month costs more but offers freedom.

5. Check the Provider

Research company reputation and service

Look at customer reviews, BBB ratings, and how long they've been in business. Smaller providers may offer lower rates but limited customer service.

How do I find the best electricity rates in Texas?

To find the best electricity rates in Texas: 1) Enter your ZIP code on a comparison site like ElectricRates.org, 2) Look at the 'all-in' or 'average price' that includes TDU delivery fees, 3) Compare plans at your actual monthly usage (check your bill), 4) Read the Electricity Facts Label (EFL) for hidden fees, 5) Check contract length and early termination fees. The cheapest advertised rate isn't always the best deal—compare total costs.

What should I look for when choosing an electricity plan in Texas?

When choosing a Texas electricity plan, look for: 1) All-in rate including TDU delivery charges (not just the energy rate), 2) Contract length that matches your needs (12-month is most common), 3) Early termination fees (some plans have none), 4) Usage credits or penalties at certain kWh thresholds, 5) Base charge or minimum usage fees, 6) Renewable energy percentage if that matters to you. Always read the full Electricity Facts Label before signing up.

What is an Electricity Facts Label (EFL) and why does it matter?

The Electricity Facts Label (EFL) is a standardized disclosure document required by Texas law that shows the true cost of an electricity plan. It displays: the average price per kWh at 500, 1000, and 2000 kWh usage levels, all fees and charges, contract terms, and renewable content. The EFL is crucial because advertised rates often exclude TDU fees—the EFL shows your actual cost. Always compare EFL prices, not promotional rates.

Should I choose a fixed or variable rate electricity plan?

For most Texas households, a fixed-rate plan is better because it locks in your rate for the contract term, protecting you from summer price spikes. Variable rates can be cheaper in mild months but often spike 50-100% during hot summers when demand peaks. Choose fixed if: you want predictable bills, you're on a budget, or you're signing up in summer. Consider variable only if: you watch rates closely, can switch quickly, or it's a mild season with low wholesale prices.

How do I compare electricity plans at different usage levels?

Texas EFLs show rates at 500, 1000, and 2000 kWh to help you compare fairly. To compare correctly: 1) Check your actual usage on past bills (most homes use 1000-1500 kWh/month), 2) Look at the EFL price closest to your usage, 3) Be aware some plans have 'sweet spots' with bill credits at certain usage levels that make them look cheaper than they are. If your usage varies seasonally, compare at multiple levels to see the true cost range.

What hidden fees should I watch out for in Texas electricity plans?

Common hidden fees in Texas electricity plans include: 1) Base charges ($5-15/month regardless of usage), 2) Minimum usage fees (charged if you use less than a threshold), 3) Early termination fees ($150-400 for breaking contract), 4) Paper billing fees ($2-5/month for mailed bills), 5) Late payment fees, 6) Usage tier penalties (higher rates above certain kWh). Check the EFL's 'Other Key Terms' section and read the Terms of Service document for all fees.

When is the best time to shop for electricity in Texas?

The best time to shop for Texas electricity is during shoulder seasons: March-April or October-November when demand and wholesale prices are lowest. Avoid signing up in July-August when summer demand pushes rates highest. Start shopping 30-45 days before your contract expires to avoid being switched to expensive month-to-month rates. If rates are low and you find a good plan, lock it in—trying to time the absolute bottom often backfires.

How do I switch electricity providers in Texas?

Switching electricity providers in Texas is easy and typically takes 1-3 business days: 1) Find a new plan and sign up online or by phone, 2) Provide your ESI ID (found on your bill) or let the new provider look it up, 3) Your new provider handles the switch—you don't need to contact your old company, 4) There's no service interruption—same wires, same meter, just a different supplier. Your final bill from the old provider arrives within 1-2 billing cycles.

What's the difference between REPs and TDUs in Texas?

REPs (Retail Electric Providers) sell you electricity and set your energy rate—you can choose and switch REPs. TDUs (Transmission and Distribution Utilities) own the poles and wires and deliver electricity to your home—you cannot choose your TDU; it's determined by your address. Your total bill = REP energy charges + TDU delivery charges. TDU rates are regulated and the same regardless of which REP you choose. Major TDUs: Oncor (Dallas/Fort Worth), CenterPoint (Houston), AEP Texas (South/West Texas).

Are 'free nights' or 'free weekends' electricity plans worth it?

Free nights and weekends plans can save money IF you can shift 50%+ of your usage to free hours. They're worth it if: you charge EVs overnight, run pool pumps on timers, do laundry on weekends, or use smart thermostats to pre-cool before peak hours. They're NOT worth it if: you work from home, have consistent daily usage, or can't shift major appliances. The 'free' hours come with higher daytime rates (often 18-27¢/kWh), so do the math with your actual usage pattern.