Choosing Electricity in Texas
Texas operates one of the most deregulated electricity markets in the U.S., which means most residents can choose their retail electric provider (REP) and the plan that fits their usage. Unlike states with monopoly utilities, Texas lets you compare rates, contract lengths, and renewable options side by side — but the trade-off is more decisions to make. This guide walks through what actually matters when choosing electricity in Texas, from understanding the two rate types to spotting hidden fees.
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Fixed-Rate vs. Variable-Rate Plans
When choosing electricity in Texas, the first fork in the road is rate structure.
- Fixed-rate plans lock in a cents-per-kWh price for the contract term, typically 6 to 36 months. Your monthly bill changes only with usage, not market swings.
- Variable-rate plans float with wholesale prices, often month to month. They can be cheaper when demand is low but spike during heat waves or cold snaps.
Fixed plans give predictability; variable plans offer flexibility. Your choice depends on how much weight you put on budget certainty versus the chance to benefit from a market dip.
Understanding the Electricity Facts Label
Every plan in Texas comes with an Electricity Facts Label (EFL), a standardized document that lays out the rate structure, fees, and contract terms. When comparing offers, focus on three sections:
- Base charge: a monthly fee that may apply regardless of usage.
- Energy charge: the cents per kilowatt-hour, which may include tiers or time-of-use blocks. TDU delivery charge: set by your local Transmission and Distribution Utility, not the REP, and passed through on every bill.
Contract Terms and Early Termination Fees
Plans range from month-to-month to multi-year locks. Longer contracts sometimes offer lower rates, but they also lock you in if rates fall. Before signing, check for early termination fees (ETFs), which can run from $20 to $200 or more depending on the remaining term and plan size.
Renewable and Green Plans
Texas leads the nation in wind generation, and many REPs offer plans powered by wind, solar, or renewable energy certificates. Choosing electricity in Texas with a green plan does not change the reliability of your service — the grid is shared — but it can align your bill with your values and, in some cases, qualify you for specific incentives or employer programs.
Common Fees to Watch For
Beyond the per-kWh rate, look out for:
- Monthly minimum usage fees
- Connection or disconnection charges
- Paper bill fees
- Higher rates during on-peak hours (time-of-use plans)
A low headline rate can be misleading if it applies only above a certain usage threshold or during off-peak windows.
How to Switch Providers
Switching is straightforward and does not interrupt service. Visit the Public Utility Commission of Texas (PUCT) Power to Choose site or a provider's website, enter your ZIP code and usage, compare plans using the EFL, and submit the new contract. Your current provider remains on the bill until the switchover date, usually within a few billing cycles.