If everything is bigger in Texas, that certainly includes the deregulated energy market, which gives you the power to choose your energy provider. While it can feel overwhelming, switching electricity providers in Texas is a cinch. It can help you save money, secure better customer service or find plans matching your energy needs. Exercising your power to choose comes down to knowing how to navigate the process.
Note that not all of Texas is deregulated. Major deregulated cities include Houston, Dallas, Fort Worth, Arlington and Corpus Christi, giving millions of Texans the freedom to shop for the best electricity rates and plans.
Why You Might Want To Switch Energy Providers
Many Texans switch energy providers to secure lower rates, especially after promotional periods end and renewal rates increase. After your initial contract expires, providers often automatically move you to a higher-priced, holdover plan, making it financially beneficial to shop around every six to 12 months. Some customers may switch for better customer service experiences, more transparent billing practices or to support renewable energy.
Potential Savings
The average Texas household can save between $200 and $500 annually by switching to a more competitive electricity plan. Electricity prices in Texas fluctuate seasonally, typically peaking during summer and—somewhat less so—during winter, making spring and fall ideal times to lock in new rates before these price increases occur.
Additional Benefits
Beyond cost savings, switching providers can give you access to renewable energy plans that source up to 100% of electricity from wind or solar. Other providers offer specialized plans that match your usage patterns. Some providers offer superior mobile apps for tracking usage, paperless billing discounts, or exceptional customer service with minimal wait times, features that improve your overall customer experience.
Step-By-Step Guide To Switching Energy Providers in Texas
Whether you want savings, better service or green energy, you can follow these steps to switch your electricity provider successfully:
Step 1: Research Available Providers and Plans
Identify which electricity providers serve your area by entering your ZIP code on a comparison website like homeenergyclub.com. A comparison marketplace such as this allows you to filter options based on preferences such as contract length, plan type, renewable content and additional benefits.
Check customer reviews on the Public Utility Commission of Texas (PUCT), the Better Business Bureau (BBB) and social media to assess the quality of customer service and billing accuracy. Pay special attention to reviews mentioning hidden fees, billing problems or difficulties when contacting customer service, as these issues can quickly offset any savings from lower advertised rates.
Step 2: Compare Electricity Rates
When comparing plans, look beyond the advertised rates and focus on the “average price per kWh” at your typical usage level. Many plans have tiered pricing structures or gimmicky discounts that can result in significantly different prices per kilowatt-hour (kWh) depending on how much electricity you use each month.
To spot these deceptive discounts, review the electricity facts label (EFL) for each plan you’re considering. This standardized document reveals the plan’s true cost, including energy charges, delivery fees and additional charges or credits. Be particularly cautious with plans that advertise very low rates, as they often include minimum usage fees or bill credits that only apply within specific usage ranges.
Step 3: Select a New Provider and Plan
Choose the provider and plan that best aligns with your priorities, whether securing the lowest possible rate, obtaining excellent customer service, supporting renewable energy or finding a combination of these factors. Consider both the electricity rate and the contract terms, including length, early termination fees (ETFs) and applicable discounts.
Step 4: Sign Up for Service
Once you’ve selected a plan, begin the sign-up process online or by phone with your chosen provider. You’ll need to provide your service address, service start date and identification. Many providers can start your service in just a few days; some even offer same-day electricity. However, we suggest scheduling your switch 30 days before your contract’s end date for peace of mind.
Step 5: Confirmation and Service Transition
After signing up, you’ll receive confirmation from your new provider via email or mail, including your service start date and account details. Your new provider will handle the switch, notifying your current provider and coordinating with the utility to transfer service. You shouldn’t experience any outages.
How Long Does it Take To Switch Energy Providers?
The typical timeline for switching electricity providers in Texas is three to seven business days from when you complete the enrollment process. That said, the exact timeline depends on whether you’re requesting immediate service or scheduling a future start date. How quickly your new provider processes the enrollment and the utility’s current workload can also impact timing.
You can request same-day energy from many providers, but each company has its own cutoff time for when that service is available. We recommend scheduling your transfer well in advance to avoid any lapses in service.
Types of Electricity Plans in Texas
The Texas energy market offers several types of electricity plans, each with unique characteristics designed to meet different consumer needs. Review your options to see which plan type aligns with your energy needs.
Fixed-Rate Plans
Fixed-rate electricity plans maintain the same energy rate throughout your contract period, often ranging from six to 36 months. This price stability protects you from market fluctuations and seasonal price spikes, allowing for more predictable budgeting regardless of what happens in the energy market.
The main drawback of fixed-rate plans is that they usually include ETFs that range from $99 to $395 if you cancel before your contract ends. Additionally, if market prices drop, you’ll be locked into your higher rate until your contract ends.
Still, the predictability of a fixed-rate plan often outweighs the risk of losing out on a price drop for many households.
Variable-Rate Plans
Variable-rate plans operate on a month-to-month basis with no long-term commitment. Their rates can change monthly based on market conditions and provider discretion.
The major downside is price volatility—your rate could increase dramatically during high-demand periods, leading to unexpectedly high bills.
Variable rates technically offer flexibility and can allow you to benefit from lower rates without being locked into a contract if prices decline. However, the uncertainty of rates that change monthly typically cancels out any potential benefits of being contract-free.
Prepaid Electricity Plans
Prepaid electricity plans work like a prepaid phone—you pay for your electricity before using it, typically by loading money onto an account drawn down as you consume power. These plans require no deposits or credit checks, making them accessible for consumers with limited credit history or those who prefer to avoid large upfront payments.
These plans promote active energy consumption awareness since you can monitor your balance daily, adjusting usage as needed to stay within budget. Prepaid plans work well for renters, students, seasonal residents or anyone wanting greater control over their electricity spending. However, they sometimes come with higher rates compared to traditional plans. Additionally, you’ll need to monitor your account actively to avoid your balance reaching $0. Otherwise, you risk having your power shut off.
Time-of-Use Plans
Time-of-Use plans offer discounted electricity rates based on energy demand. Typically, you can enjoy cheap—or even free—electricity during off-peak hours, such as nights or weekends, while paying very high rates during peak demand.
These plans can provide savings if your usage patterns align with the plan’s structure. For example, you can shift major electricity usage to evenings and weekends.
Before choosing a time-of-use plan, carefully analyze your household’s consumption patterns to ensure they align with off-peak hours. These plans often feature some of the highest rates during peak times to offset free or discounted periods, potentially resulting in higher bills if your usage doesn’t match the plan’s optimal schedule. Peak demand rates can exceed 27 cents per kWh before factoring in delivery fees.
Before You Switch: What To Check First
Before initiating a switch to a new electricity provider, take the time to review these critical factors to ensure a smooth transition and avoid unexpected costs or complications.
Check Your Current Contract Status
Review your current electricity contract to understand its expiration date and any ETFs that may apply if you switch before it ends. Most providers allow penalty-free switching within the final 14 days of your contract, making this the ideal window to initiate a change. Call your current provider to confirm your contract end date and any applicable fees if you’re unsure about your status.
Know Your Energy Usage
Understanding your typical monthly electricity consumption is crucial for finding the most cost-effective plan for your household. Review past bills to identify your average usage across different seasons, as providers advertise rates based on specific usage levels: 500, 1000, and 2000 kWh. A plan with great rates at 1000 kWh might be great in summer when your usage is 1,100 kWh or more, but very expensive in spring and fall if your usage drops to 700 kWh. Matching the plan to your actual usage pattern is essential for maximizing savings.
Understand Your Billing Cycles
When switching providers, be prepared for potential overlap in billing cycles during the transition month. You may receive a final bill from your previous provider covering usage until the switch date and an initial bill from your new provider covering the remainder of the month. This temporary billing overlap is normal and doesn’t mean you’re being charged twice for the same electricity consumption. If you don’t have autopay set up, keep an eye out for your final bill in the mail.
Understanding Electricity Rates and Plan Comparison
Electricity plans in Texas can be complex, with various components affecting the final price you pay. Understanding how these elements work together is essential for making meaningful comparisons between different offers.
Components of Your Electricity Rate
Your electricity bill consists of several distinct charges contributing to the total cost. The energy charge (sometimes called the base rate) is what you pay the retail provider for the electricity you consume.
Delivery charges, or TDU delivery fees, are added to every bill regardless of which retail provider you choose. These fees cover the cost of maintaining the electrical grid and delivering power to your home. Utilities typically charge both a flat monthly fee and a rate per kilowatt-hour.
Many plans include base charges (a flat monthly fee) or minimum usage fees, an additional charge if your consumption falls below a certain level. Review these charges and components together to determine which plan offers the best value for your household.
Reading the EFL
The EFL is a standardized document that provides transparent information about each electricity plan, similar to a nutrition label for food products. This crucial document shows the electricity price at three standard usage levels, helping you see how the rate changes with different consumption patterns.
In addition to pricing information, the EFL details the contract length, ETFs, automatic renewal terms and the percentage of renewable energy in the plan. Review this document carefully before signing up for any plan, as it reveals important information that providers don’t typically feature prominently in marketing materials.
Will My Electricity Service Be Interrupted When I Switch?
No, your electricity service will not be interrupted when switching providers. The same local utility company continues to deliver your electricity and maintain the power lines, meters and infrastructure regardless of your chosen provider. The switch occurs behind the scenes without physical changes to your service connection, ensuring a seamless transition without downtime.
Can I Switch Providers If I Still Owe Money to My Current Provider?
Generally, you can’t switch providers if you have an outstanding balance with your current electricity company. Most providers will check your payment history and may block the switch if you have unpaid bills. This is called a switch-hold.
Pay any outstanding balance before initiating a switch to facilitate a smooth transition. If you’re experiencing financial hardship, contact your current provider to discuss payment arrangements before switching.
Can I Cancel My New Plan After Switching?
Texas law provides a three-day “cooling off” period after signing a new electricity contract, during which you can cancel without penalty or obligation. This period begins when you receive your Terms of Service agreement and applies to most enrollment methods except for some in-person sign-ups. After this period ends, canceling your contract will typically trigger an ETF.
Tips for Finding the Best Energy Plan in Texas
Shop for new electricity plans during spring or fall when demand and rates tend to be lower.
These shoulder seasons typically offer the most competitive promotions and allow you to lock in favorable rates before the high-demand summer and winter periods.
Always calculate the total cost of any plan at your specific usage level rather than relying on advertised rates or special offers.
Watch Out for These Common Pitfalls
- Falling for advertised rates without considering your usage
- Not understanding tiered pricing structures and minimum usage fees that impact your bill
- Overlooking contract expirations that move you to a holdover, variable-rate plan
- Misinterpreting promotional rates that expire after a few months
- Failing to read the full Terms of Service and EFL before signing up
- Not considering the contract end date when comparing short-term savings
- Being swayed by sign-up incentives without calculating their value against potentially higher rates
Which Energy Plan Is Best for Me?
Choosing the right energy plan depends largely on your usage patterns, budget priorities and risk tolerance.
Fixed-rate plans provide stability and predictability, while variable-rate plans have no contract. Prepaid plans provide accessibility, and time-of-use plans can benefit households with specific consumption patterns.
Review your past electricity usage when evaluating options. Ultimately, the best plan balances price, contract terms and additional features to align with your needs.
| Plan Type | Best for | Key Benefits | Considerations |
|---|---|---|---|
| Fixed-Rate | Budget-conscious consumers who value predictability | Stable rates protected from market fluctuations; easy budgeting | ETFs; potentially missing out on lower rates if prices drop |
| Variable-Rate | Very short-term residents or those comfortable with price risk | No contract commitment | Price volatility; risk of significant bill increases during extreme weather |
| Prepaid | Consumers with limited credit history or those who prefer pay-as-you-go | No deposits or credit checks; better usage awareness; no contracts | Potentially higher rates, service disconnection if account balance reaches zero, fewer plan options |
| Time-of-Use | Households that can shift major electricity usage to specific times | Potential for savings with optimized usage | Very high rates during peak periods; requires lifestyle adjustments to benefit |
Frequently Asked Questions
How do I know if I live in a deregulated area?
You can determine if you live in a deregulated area by checking the Public Utility Commission of Texas website. You can also punch in your ZIP code on Home Energy Club. Generally, you’re likely in a regulated area if you receive electricity from a municipal utility like Austin Energy, San Antonio’s CPS Energy or an electric cooperative. Major deregulated areas include Houston (served by CenterPoint), Dallas-Fort Worth (Oncor), and the Texas Gulf Coast (AEP).
What information do I need to switch providers?
To switch electricity providers, you’ll need your full service address, proof of identity (Social Security number or driver’s license), date of birth, phone number, email address and preferred payment method. You’ll also need to know your desired service start date and, ideally, information about your typical monthly electricity usage to compare plans accurately.
Having a recent electricity bill handy can simplify the process by providing your ESI ID, a unique number that identifies your service location.
What happens if my energy provider goes out of business?
Suppose your chosen provider unexpectedly exits the market. In that case, Texas has a Provider of Last Resort (POLR) system that automatically transfers your service to a designated backup provider, ensuring continuous electricity service.
These POLR rates are typically higher than competitive market rates, so you should shop for a new provider as soon as possible after being transferred. You’ll receive notification if your provider goes out of business or if your account is transferred to a POLR.
What is the difference between a utility and a retail electric provider?
The utility owns and maintains the infrastructure that delivers electricity to your home, including power lines, meters, and poles, and handles power outages and repairs. In contrast, a retail electric provider (REP) purchases wholesale electricity and sells it to consumers, handling customer service, billing and plan options.
In deregulated areas, your utility remains the same regardless of which retail provider you choose, as they’re responsible for the physical delivery of electricity to your property.