Wiktor Wise
Texas has a deregulated energy market, meaning that residents can choose their energy provider and plan. This means that you can compare, shop, and order your electricity service from any of the dozens of competitive providers in Texas. To find the best electricity plan for you, start by looking at a past electric bill to determine your monthly energy consumption. Next, enter your ZIP code on a website like Choose Texas Power to compare plans that match your typical usage so you can find the best possible electricity rate. You can also use the ElectricityPlans ESID Lookup Tool to find your local electric company.
| Characteristics | Values |
|---|---|
| Electricity rates | Flat or tiered |
| Tiered rates | Built to incentivize customers to monitor their usage; may punish usage greater than tiered amounts |
| Bill Credits | Drive down the price to appear as the lowest cost on Texas Electricity Comparison websites |
| Green energy | Pay a premium; you are paying for traditional electricity generation PLUS a subsidy for green energy |
| Pre-paid plans | Great for those with weak/no credit; rates will be a few cents higher than traditional fixed-rate post-pay plans |
| Fixed-rate plans | Lock in a rate for a term ranging from 3 months to 5 years; best for shoppers looking for stable rates and long-term price protection |
| Variable-rate plans | Best for customers who need flexibility or are between contracts |
| Energy deregulation | Over 85% of Texas is deregulated, meaning residents can choose their energy provider |
| Number of electricity providers | Over 140 |
| Finding your local electric company | Use the ElectricityPlans ESID Lookup Tool (Electricity Service Identifier) |
| Choose Texas Power | A marketplace to help you sign up for the best electric provider in Texas; compare energy companies and find the plan that works for you |
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What You'll Learn
Understanding Texas' deregulated energy market
Texas has a deregulated electricity market, which means that, unlike the rest of the United States, the Federal Energy Regulatory Commission (FERC) does not oversee the state's electricity market. Instead, the Public Utility Commission of Texas (PUCT) is responsible for its regulation and oversight.
In a deregulated market, consumers can choose their energy provider and plan. This means that consumers can shop around for plans and compare prices, allowing them to tailor their electricity choices to their budget and lifestyle. This freedom of choice has incentivized retail electric providers to continuously innovate to stay competitive. For example, in 2002, residential customers in the Dallas-Fort Worth area could choose between 10 retail electric providers offering 11 price plans. By 2012, there were 45 providers offering 258 plans.
However, critics of Texas's deregulated energy market argue that it has led to higher prices for consumers. A 2014 report by the Texas Coalition for Affordable Power (TCAP) estimated that deregulation cost Texans $22 billion from 2002 to 2012, with residents in deregulated markets paying higher prices than those in regulated areas. Additionally, during the February 2021 North American winter storm, wholesale electricity prices surged by up to 10,000%, resulting in exceptionally high electric bills for some Texans.
Despite these criticisms, Texas's deregulated energy market has encouraged the adoption of renewable energy sources. Customers can now choose a retail electric provider based on their renewable energy portfolio, allowing them to support green energy sources.
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Using the ElectricityPlans ESID Lookup Tool
Texas has a deregulated energy market, meaning you can choose your electricity provider and plan. This means that you will need to shop around for an electricity provider.
The ElectricityPlans ESID Lookup Tool is a great way to find your local electric company. The Electric Service Identifier (ESID) is a unique number assigned to every electricity meter in deregulated areas. It acts as your meter's digital fingerprint, ensuring accurate identification and billing by your chosen energy supplier.
To use the tool, simply enter your address and the tool will show you your ESID, the type of meter, your electric utility company, and electricity providers near you. This is important information when shopping for an electricity plan. You can also find your ESID by looking on your electricity bill for a number that begins with 10089 or 1044.
It is worth noting that there may be individual ESIDs for each apartment or a single ESID for an entire complex, so it is important to confirm this with your property manager. The ESID Lookup Tool is updated multiple times a day, directly from the ERCOT database, so you can be confident in the accuracy of the information.
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Comparing energy plans and providers
Texas has a deregulated energy market, meaning that over 85% of the state must shop for an electricity provider. This also means that the utility company and the electricity provider are separate entities. As a result, Texans have had the power to choose their electricity provider since 1999, with over 1800 different energy plans available in the Texas market every week.
When comparing energy plans and providers, it is essential to understand your usage. Knowing your electricity usage history will help you get the best rate and avoid common traps and tiered plans that may end up costing you more than you expected. Some companies provide usage statistics on your bill, or you can use a bill calculator to estimate your usage.
There are various types of plans available in Texas, including fixed-rate and variable-rate plans. Fixed-rate plans lock in a rate for a specific term, ranging from 3 months to 5 years, with the most popular terms being 6, 12, 18, and 24 months. These plans offer stability and long-term price protection but carry the risk of rates decreasing significantly during the term, making early termination fees a potentially worthwhile option. Variable rates, on the other hand, offer flexibility and are suitable for customers between contracts, as the monthly bill fluctuates with the electricity market.
Additionally, Texas offers green energy options, where you pay a premium for traditional electricity generation plus a subsidy for green energy. This allows you to offset "dirty" generation usage with Renewable Energy Credits (RECs), which typically cost 2-3 cents per kWh. Prepaid plans are also available, often accompanied by phone apps and texts that notify you when to refill your account.
When choosing an energy plan and provider, it is essential to compare companies and plans to find the best option for your needs. Websites like Texas Electricity Ratings gather information from various sources, rate and rank providers, and offer bill calculators to help you make an informed decision.
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Choosing between fixed-rate and variable-rate plans
Texas has a deregulated energy market, which means homeowners, renters, and business customers have more freedom in their choices. Texans have had the power to choose their electricity provider since 1999, allowing them to compare, shop, and order their electricity service from dozens of competitive providers in the state.
When choosing between fixed-rate and variable-rate plans, it's essential to consider your energy usage patterns, budget, risk tolerance, and preference for stability. Fixed-rate plans offer predictability and stability, making budgeting easier. Your rate per kWh remains locked in for the term of your contract, typically ranging from 3 months to 5 years, with the most popular terms being 6, 12, 18, and 24 months. While your rate per kWh stays the same, your total bill can vary based on your usage. Fixed-rate plans are ideal if you prefer predictable bills and want protection from market volatility, especially during high-demand periods like scorching summers or chilly winters in Texas. However, if market prices drop, you won't benefit from lower rates until your contract ends, and switching plans may incur early termination fees.
On the other hand, variable-rate plans offer flexibility. The monthly energy rate may be based on wholesale electricity costs, which can lead to significant bill changes due to market volatility. Variable-rate plans are typically short-term agreements without long-term contracts or traditional cancellation fees, making it easier to switch plans or providers. Variable rates are suitable for customers who need flexibility or are between contracts. Additionally, during mild weather or low-demand periods, variable-rate plans can offer cheaper electricity when the supply is abundant. However, the unpredictability of market conditions, such as weather, demand, and energy providers' costs, can make budgeting more challenging.
To make an informed decision, understand your usage history and consider using tools like a Bill Calculator to model your annual usage. Compare rates from different providers to ensure you get the best deal suited to your needs and budget.
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Green energy options
Texas is the top energy producer and consumer in the country, and renewable energy is helping the state meet its growing demand for energy. Renewable energy sources are also providing jobs, supporting communities, and boosting rural economies.
There are several green energy options in Texas. Most electricity providers in Texas offer green energy plans, with power generated from renewable resources. Here are some of the top companies that offer renewable plans:
- Chariot Energy: Offers plans with 100% Texas solar energy. The company has a long history in the solar energy market through its parent company, 174 Power Global.
- Gexa Energy: All of Gexa's plans are 100% green energy. Their parent company, NextEra Energy, is the world's largest generator of solar and wind energy.
- Rhythm: Rhythm is a Houston-based electricity company that promises to make energy easy. All of Rhythm's plans are backed by 100% Texas wind, and they offer a 30-day satisfaction guarantee.
- Green Mountain: Green Mountain offers renewable energy plans, although specific details are not readily available.
You can also purchase plans with green energy from solar power. Across the Texas grid, around 7% of all power produced comes from solar. TXU Energy offers two plans with 25% Texas solar, and there are other solar-backed plans that combine Texas and national solar Renewable Energy Credits (RECs).
When you enroll in a green electricity plan, your provider retires the RECs for the corresponding amount of power that you use. These RECs can be from wind, solar, biomass, or geothermal sources.
To find the best green energy plan for your home, you can use websites like electricityplans.com, which allow you to compare prices and plans from different providers. Additionally, you can use the ElectricityPlans ESID Lookup Tool to find out what electric company serves your address.
It is worth noting that you will pay a premium for green energy, as you are paying for traditional electricity generation plus a subsidy for green energy. However, one study found that renewable energy is saving the average Texas household almost $200 a year.
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Frequently asked questions
You can use the Choose Texas Power marketplace to compare energy companies and find the best plan for you. You can also use the ElectricityPlans ESID Lookup Tool to find out what electric company serves your address.
Understanding your usage is the first step in getting a cheap electricity rate. Knowing your usage history will help you avoid tiered plans that might end up being more expensive than you expected. You can then compare electricity rates in your area by entering your zip code on Choose Texas Power.
Some of the companies with the lowest electricity plans across Texas include Gexa Energy, 4Change Energy, and Frontier Utilities.
Texas has a deregulated energy market, which means that consumers can choose from a variety of plans such as fixed-rate plans, variable-rate plans, and renewable energy plans.
