Otis Singleton
Texas has a deregulated energy market, meaning that in most parts of the state, consumers can choose their electricity provider and switch at any time. This has created a competitive energy market, with a host of options, plans, and rates to choose from. The process of switching is relatively simple and can be done online or over the phone. Texans can compare rates and plans on websites such as PowerToChoose.org, Choose Energy, and Choose Texas Power, and select a new provider based on their energy needs and budget.
| Characteristics | Values |
|---|---|
| Deregulation | In 1999, the Texas Legislature passed a deregulation law that made it possible for consumers in most parts of Texas to choose their own electric company. |
| Choice of provider | The deregulation law means that consumers have the freedom to shop around and choose the provider that best meets their needs based on factors such as price, renewable energy options, and customer service. |
| Choice of plan | Consumers can choose a plan that is tailored to their energy use and budget. |
| No interruption in service | The switch is handled by the new provider and there is no interruption in service. |
| No need for new equipment | The transition is handled electronically, so there is no need for new equipment or wiring when you switch. |
| No hidden fees | The Public Utility Commission of Texas has established rules requiring electric companies to provide customers with an easy-to-read bill. |
| Early termination fees | If you are under a current contract with a provider, you will usually be responsible for any early termination fees when switching, unless you are moving. |
| Variable rates | If you have a variable-rate plan, rates may fluctuate. |
| Fixed rates | Fixed-rate plans can offer stability even as rates rise, and can be locked in up to 90 days in advance. |
| Comparison websites | There are several websites that allow users to compare rates and plans, including Choose Energy, Choose Texas Power, and Power to Choose. |
| Charitable donations | Some companies, such as 4Change Energy, donate a percentage of their proceeds to charity. |
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What You'll Learn
Understand the deregulated energy market in Texas
Texas has a largely deregulated energy market, which means that consumers can choose their electricity provider and select a plan that suits their needs and budget. In 1999, the Texas Legislature passed a deregulation law that allowed consumers in most parts of Texas to choose their electric company. This was done to encourage free-market competition and lower prices.
The energy market in Texas has experienced dramatic changes since the introduction of deregulation. In 2002, residential customers in the Dallas-Fort Worth area had a choice of 10 retail electric providers offering 11 price plans. By the end of 2012, this had increased to 45 providers offering 258 price plans. As of 2022, more than 20 million electricity customers in Texas have chosen their electricity provider.
The deregulated energy market in Texas allows consumers to compare prices and plans from different providers. The Public Utility Commission of Texas (PUCT or PUC) regulates the state's electric utilities and protects consumers' rights. The PUCT was created by the Public Utility Regulatory Act (PURA) in 1975 and is responsible for overseeing the Texas electricity market.
The Electric Reliability Council of Texas (ERCOT) manages the deregulated electricity grid in the state. The transportation and delivery of power are handled by Transmission and Distribution Utilities (TDUs), which maintain the power grid and deliver electricity to residential and business customers.
Consumers in Texas can use websites like Power to Choose and Choose Energy to compare electric offers and select the best plan for their needs. These websites allow users to filter and sort the results based on their preferences, such as low rates, green energy, or no-deposit options. It is important for consumers to understand the terms of their plans, as well as their monthly energy usage, to make informed choices when selecting an energy provider.
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Compare plans and rates
In 1999, the Texas Legislature passed a deregulation law that allows consumers in most parts of Texas to choose their electric company. This means that you can compare prices and shop for a plan that suits your needs.
When comparing plans and rates, it is important to know your monthly usage. Your monthly energy usage is listed on your electricity bill and will help you find a plan that fits your needs and budget. Providers charge different rates based on how much energy you consume in a billing period, and plans are generally advertised based on 1,000 kilowatt-hours (kWh) of usage. For example, the Gexa Energy Eco Saver Plus 12 plan offers a $125 bill credit for using at least 1,000 kWh of electricity a month. If you use significantly more or less energy per month, you can filter for your typical usage and find the cheapest rates available for your tier.
You should also consider whether a fixed-rate or variable-rate plan is better for you. If you are on a fixed-rate plan, your rate will not change during the contract term, providing stability and protection against price hikes. On the other hand, variable-rate plans may be susceptible to fluctuations in the market, which can cause your rates to increase.
Additionally, be mindful of early termination fees. Fixed-rate electricity plans may have early termination fees (ETFs) if you cancel or switch before your contract ends. These fees may be a lump sum or a fee for each month remaining on your contract.
Finally, consider the time of year when comparing plans and rates. Spring is a good time to shop for electricity in Texas as current moderate demand creates competitive rates. Avoid plans with terms ending in July or August when renewal rates are typically highest.
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Account for early termination fees
When considering switching electricity providers in Texas, it is important to account for early termination fees (ETFs) that your current provider may charge. ETFs are penalties that utility companies charge customers who break their contracts before the agreed-upon termination date. These fees can vary depending on the company and the state, but in Texas, they typically range from a few dollars to a few hundred dollars, with residential consumers often paying less than commercial companies.
To avoid unexpected charges, it is crucial to review your contract's cancellation terms before initiating a switch. You can usually find information about ETFs in the discourses area or the electricity facts label of your plan. If you are moving to a location outside of your current provider's service area, most companies will not charge you an ETF if you can provide proof of your new address and zip code. However, if you are not moving and simply prefer a different provider, you may be subject to an ETF if it is stated in your contract.
Additionally, some companies may offer plans with no ETFs, so it is worth considering this when choosing a new provider. Texas law also protects consumers from having to pay ETFs if they are relocating to a new address, even if it is within the same provider's service area. In this case, you can transfer your existing contract to your new home without incurring ETFs.
To make an informed decision, you can use third-party services like Power Wizard to compare rates and determine if switching before or after your current contract expires is more advantageous. By reviewing your plan's Electricity Facts Label (EFL) and understanding the terms of your contract, you can make a well-informed decision about switching electricity providers in Texas while effectively accounting for potential early termination fees.
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Choose a new provider
The first step to changing your electricity provider in Texas is to choose a new one. Texas has a deregulated energy market, meaning you can shop around for a provider that meets your needs. You can choose a provider based on factors such as price, renewable energy options, and customer service.
There are dozens of energy providers operating across Texas, and it can be challenging to find the best one for you. You can start by checking out Power to Choose, the official, unbiased electric choice website of the Public Utility Commission of Texas, where all certified electric providers in the state are eligible to post their electric plans. You can also use other platforms such as Choose Energy, Compare Power, and Choose Texas Power, which allow you to compare rates and plans from different providers.
When choosing a new provider, it is important to understand your monthly energy usage, as providers charge different rates based on how much energy you consume. You can find this information on your electricity bill. Additionally, be sure to review the Electricity Facts Label (EFL) for each plan, as some plans have minimum usage charges or early termination fees.
Some providers, such as 4Change Energy, offer charitable contributions along with their electricity plans, allowing you to give back to the community with every bill payment. Others may offer credits or waivers of certain fees for using a certain amount of electricity. It is worth exploring these options to find a provider that aligns with your values and budget.
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Contact the new provider to start the switch
Once you have compared plans and rates and selected a new provider, you can contact them to initiate the switch. It is important to ensure that your contract with your current provider has ended or that you have accounted for early termination fees in your total costs. Fixed-rate electricity plans may have early termination fees (ETFs) if you cancel or switch before your contract ends. These fees may be charged as a lump sum or as a fee for each month remaining on your contract, depending on the provider and the length of your agreement. Review your plan's Electricity Facts Label (EFL) for more information.
When you are ready to switch, you can contact your new provider by phone or online. You can find a new provider by submitting your ZIP code on the Choose Energy website, which will provide you with a list of the latest rates in your area. You can then select a plan and sign up. You can filter and sort the results to find a plan that suits your needs, whether that is a low rate, green energy, or no deposit. You can also use the Choose Texas Power marketplace to find a new provider by filtering by plan type, price, household size, provider, length of service, and more. If you have any questions or concerns, you can contact your new provider's customer service department for assistance.
After you have contacted your new provider, they will handle the rest of the process, including notifying your old provider. Your work is done, and you can sit back and enjoy your new Texas energy plan.
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Frequently asked questions
Texas has a deregulated energy market, meaning you can change your electric company at any time. To switch providers, you need to compare plans and rates, select a new provider, and then contact them to initiate the switch.
Power to Choose is the official, unbiased electric choice website of the Public Utility Commission of Texas, where all certified electric providers in the state are eligible to post their plans. You can also compare rates on third-party websites like Choose Energy and Choose Texas Power.
It's important to understand the terms of your plan, as fixed-rate and variable-rate plans have different advantages and drawbacks. You should also be mindful of early termination fees, which may apply if you switch providers before your contract ends. Additionally, consider your monthly usage and whether you want a plan that offers green energy.
Once you've selected a new provider, you can sign up for their plan online or over the phone. Your new electric company will then coordinate with your utility company and previous provider to switch your service.
No, your power will continue without interruption. However, you will receive two confirmation emails—one from the marketplace you used to select your plan and one from your new provider. Your next bill will also reflect the change in providers.
