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Who can choose a provider in Texas?
Most of Texas's main power grid, run by ERCOT, has a competitive retail market. If your home is served by one of the big investor-owned delivery companies, you can pick your electricity provider: Oncor (Dallas–Fort Worth and much of North and West Texas), CenterPoint Energy Houston Electric (Houston area), AEP Texas (Corpus Christi, the Rio Grande Valley and parts of West Texas) and Texas-New Mexico Power (TNMP) (parts of the Gulf Coast, North Texas and the Rio Grande Valley).
You generally cannot choose if your electricity comes from a municipal utility or an electric cooperative. Austin Energy, CPS Energy (San Antonio), Lubbock Power & Light and many co-ops fall in this group. Some co-op and municipal territories have opted into competition, so enter your ZIP code or check your bill to be sure.
How Texas electricity is structured
Two companies appear on your bill, and understanding the split removes most of the confusion:
- Your delivery company (TDU). It owns the poles, wires and meter. You cannot choose it, its delivery charges are regulated and the same no matter which provider you pick, and it is who you call during an outage.
- Your retail electricity provider (REP). It sells you the electricity and bills you. This is the company you can shop for and change.
When two plans advertise different prices, the difference is in the REP's part of the bill: the energy rate, the base charge, any credits or fees. The delivery charges are passed through either way.
Plan types explained
| Plan type | How the price works | Watch out for | Often suits |
|---|---|---|---|
| Fixed-rate | Energy rate stays the same for the contract term (commonly 6, 12, 24 or 36 months). | Early termination fee; the price when the term ends. | Most households. Predictable bills. |
| Variable / month-to-month | Provider can change the rate, often monthly, with notice. | Can be much higher than fixed offers. | Short stays or temporary housing. |
| Indexed | Rate follows a wholesale market index plus a margin. | Price spikes in extreme weather or market stress. | People who understand wholesale risk and can tolerate swings. |
| Prepaid | You pay in advance and the balance draws down as you use power. | Daily fees and shutoff when the balance hits zero. | Households that don't want a deposit or credit check. |
| Time-of-use / free nights or weekends | Lower or zero rates in certain hours, higher at other times. | Higher rates the rest of the day if your use isn't shifted. | Homes that can move heavy loads (EV charging, laundry, pool pump) off-peak. |
| Renewable | Matches use with renewable energy certificates, wind or solar. | Check the percentage and the price. | Households who want to support renewables. |
General descriptions. Specific plan terms vary by provider.
How to read an Electricity Facts Label
Every plan has an Electricity Facts Label (EFL). Ignore the big number in the ad and open the EFL. Look for these items in order:
- Average price per kWh at 500, 1,000 and 2,000 kWh. This already includes the energy rate, base charge and typical delivery charges, so it is the best apples-to-apples number.
- Base charge and minimum-usage fees. A $9.95 monthly charge hurts a lot more when you only use 500 kWh.
- Bill credits. Some plans include a credit only if your usage lands inside a range, such as a credit at 1,000 kWh. Use even slightly outside the range and the average price jumps.
- Contract length and early termination fee (ETF). Some ETFs are a flat amount per remaining month, which adds up quickly.
- Renewable content, rate type and any restrictions such as autopay or paperless billing requirements.
Why the headline rate can mislead you
Here is a simplified, illustrative example (not a real plan) showing why the same plan can be cheap or expensive depending on how much you use:
| Monthly use | Average price on the EFL | Monthly electricity cost |
|---|---|---|
| 500 kWh | 16.9 ¢/kWh | $84.50 |
| 1,000 kWh | 12.4 ¢/kWh | $124.00 |
| 2,000 kWh | 14.1 ¢/kWh | $282.00 |
Hypothetical numbers for illustration only. The dip at 1,000 kWh reflects a usage-based bill credit.
A plan like this looks great if you happen to use about 1,000 kWh and mediocre at almost any other level. In Texas, your usage may swing from under 700 kWh in spring to well over 2,000 kWh in an August heat wave, so check the EFL at the usage level that matches your annual pattern, not your best month.
Use your real numbers. Download your last 12 months of usage from your REP's portal or from Smart Meter Texas, then compare plans at your actual typical and peak use.
Plan-picking checklist
- You confirmed your ZIP code is in a competitive area.
- You compared the EFL average price at the usage level that matches your home.
- You know the contract length and the early termination fee.
- You checked base charges, minimum-usage fees and credit conditions.
- You read recent customer complaint history on the Public Utility Commission of Texas website or other reliable sources.
- You set a calendar reminder 45 days before the term ends.
- You chose fixed-rate unless you fully understand indexed pricing.
How switching works
- Pick a plan and complete the enrollment yourself on the provider's or comparison site's page. You must authorize the switch directly, and nobody else can do that on your behalf.
- Pass any credit check or deposit requirement, or choose a prepaid plan.
- Your start date is usually your next meter read or a few business days out. There's no outage, no technician visit and no cost to switch with a smart meter.
- Cancel if you change your mind within the rescission window described in your confirmation, typically three federal business days.
- Moving? Start service at your new address before move-in so you are not placed on a default provider's rates.
Ready to compare plans at your address?
Our comparison partner shows plans from licensed Texas providers for your ZIP code. You choose the plan and finish enrollment yourself. If you buy through our link we may earn a commission, at no extra cost to you.
Partner link coming soon Partner link coming soonFrequently asked questions
Can I switch electricity providers without losing power?
Yes. Switching your retail electricity provider (REP) is a billing change only. Your wires, meter and power line remain the same and are run by your local delivery company, which also handles outages. You usually have a short window after enrolling, typically three federal business days, to cancel without penalty. Check the terms of your specific plan.
What is an Electricity Facts Label (EFL)?
The EFL is a standardized one-page summary every Texas fixed- and variable-rate plan must provide. It shows the average price per kWh at 500, 1,000 and 2,000 kWh of monthly use, the base charge, delivery charges, contract length, early termination fee and renewable content. It is the most reliable way to compare plans.
Is a 12-month plan better than a 24-month plan?
Not automatically. Longer terms can lock in a rate for longer, which protects you if market prices rise, but they usually have larger cancellation fees and you may overpay if rates fall. Many people choose 12 months and re-shop each year.
What happens when my fixed-rate plan ends?
Many providers move customers to a month-to-month or variable plan that can cost more than a new fixed-rate plan. Your provider is generally required to notify you before your term ends, but that notice is easy to miss, so set your own reminder 30 to 45 days before the end date.
Are 'free nights' or 'free weekends' plans a good deal?
Only if your use really is concentrated in the free hours. These plans often charge higher rates the rest of the time. Compare the EFL average price at your own usage level rather than the headline.
What is Smart Meter Texas?
Smart Meter Texas is a free portal where customers of participating utilities can view their own 15-minute meter data and download usage history. It is useful for choosing a plan that fits when and how much power you use.
Are indexed or variable plans risky?
They can be. Rates on wholesale-indexed plans move with market prices, and some customers received extremely high bills during Winter Storm Uri in February 2021. Fixed-rate plans are the safer default for most households.
This guide is general information, not financial or legal advice. Plan availability, pricing and rules change; confirm current terms with the provider and the Public Utility Commission of Texas.