In 2002, Texas deregulated its energy market, giving residents the freedom to choose their electricity provider. This change means you no longer have to rely solely on your local utility company for power—you can shop for the best electricity plan that suits your needs. It’s similar to shopping online, where you compare prices, features, and options to find what works for you.
While having many providers to choose from is great, it can be a bit overwhelming. There are fixed and variable rate plans, contract lengths, price differences, and even options like prepaid electricity. This guide will help you navigate the process and find the best plan without all the confusion.
What is Texas Energy Deregulation?
Energy deregulation in Texas began in 2002. The goal was to let Texans choose their electricity supplier instead of being limited to the one provided by their local utility company. While you can now choose your electricity supplier, the local transmission and distribution utility (TDU) still takes care of delivering power to your home, maintaining the wires and poles, and fixing outages.
Why Should You Shop for an Energy Plan?
Even though it can seem tricky at first, shopping for electricity can be rewarding. Here’s why you should consider it:
- Save Money: One of the main reasons people choose their own provider is to save money. Even a small difference in the cost per kilowatt-hour can add up to big savings over time.
- Support Renewable Energy: Many Texans want to do their part to reduce their carbon footprint. By choosing a plan that supports renewable energy sources like wind or solar, you can make a positive impact.
- Fixed-Rate Plans: Some people prefer the stability of a fixed-rate plan. With this, your rate stays the same each month, regardless of how market prices fluctuate. This is especially useful if you want predictable bills.
How to Shop for Electricity in Texas
Here are the ways how to shop for electricity in Texas:
1. Check Your Existing Contract
Before switching providers, take a look at your current contract. If you’re still under contract, switching early may result in a fee. You can find this information on your electricity bill or by contacting your current provider.
2. Know Your Current Usage and Rate
Knowing how much electricity you use each month will help you choose the right plan. Your bill typically shows your usage in kilowatt-hours (kWh). Plans are often priced based on 500, 1000, or 2000 kWh of usage.
3. Consider Contract Length
When shopping for a plan, pay attention to the contract length. Some plans are month-to-month, while others can last for several years. If you want flexibility, a shorter contract may be best. But if you’re looking for stability, a longer-term contract may lock in lower rates.
4. Choose Between Fixed and Variable Rates
There are two main types of electricity plans:
- Fixed-Rate Plans: These plans offer stability by locking in your rate for a set period, like 6, 12, or 24 months. The downside is that if prices go down, your rate stays the same.
- Variable-Rate Plans: With these plans, your rate can change each month based on market conditions. While this offers flexibility, your bill could go up during high-demand periods, such as the summer.
5. Think About Rewards and Perks
Some providers offer rewards, like credits for referring a friend or discounts during off-peak hours. These perks might help you save even more money, so it’s worth considering if they align with your needs.
6. Credit Score and Deposits
Your credit score can affect the type of electricity plan you qualify for. Providers often require a credit check, and if your score is below a certain threshold, you may need to pay a deposit. For those with lower credit scores, prepaid plans are an option since they usually don’t require a deposit or credit check.
Setting Up Electricity in Your New Home
When moving into a new home, setting up electricity service is easy. You will typically choose from three options:
- Standard Switch: If you’re switching providers in the same home, this process usually takes one to two days.
- Self-Selected Switch: This option lets you pick a specific date for the switch, giving you more control over the process.
- Move-In: If you’re moving into a new place, you can schedule your electricity service to start on a specific date up to 60 days in the future.
Making It Simple
Shopping for electricity in Texas doesn’t have to be complicated. By understanding the basic choices, like fixed vs. variable rates, contract lengths, and your own usage needs, you can find a plan that fits your lifestyle. You also have the freedom to explore renewable energy options and perks that can save you money. Texas residents are lucky to have the power of choice when it comes to electricity, so take advantage of it!
