Finding the Best Price for Electricity in Texas in 2023
If you live in Texas and would like to shop for low electricity rates, you should know the basics first. These basics about how the energy market in Texas works will help you make a good decision and will help you to better understand your electricity bill. With several dozen electricity companies and electricity providers, low average electricity rate, and deregulated energy market, Texas seems to be the heaven of electricity in the US. Read on to learn more.
What Is A Good Rate For Electricity In Texas?
Electricity in Texas is one of the cheapest in the US. Average Texas electricity rates for commercial consumers are $8.06 and for residential customers $12.50. These rates are very low, 28% and 8% lower than the national average. If you think that you are overpaying on your electricity bill, make sure you check your electricity bill. If your ‘per kWh’ rate is higher than the average, it is time to shop for a lower electricity rate or even change your energy provider.
Energy Companies In Texas
When shopping for cheap electricity in Texas, you should know that there are many electricity companies working in the state since the Texas energy market is fully deregulated. Texas electricity prices are a result of demand and offer, rather than the state interfering into what should be a free market. In an electricity market like this, there are two types of electricity companies: electricity providers (electric suppliers) and utility companies (utilities, for short). These companies work together to enable a reliable electric service and a low electricity rate for all.
Electric suppliers or electricity providers are companies that purchase electricity on the wholesale market and then sell it to you. These energy companies work with you directly: this is the company you sign your new energy contract with. There are several dozen working in Texas, including:
- 4Change Energy,
- TriEagle Energy, and
- Reliant Energy.
Electricity providers charge two types of fees: the flat and the variable fee. The flat fee is the same every month, and as you use more energy, the lower, the flat fee turns out to be (as it is spread out evenly across more kWhs). The per kWh fee also drops with increased usage, this time in a system of three tiers: <500 kWh per month, 500-1,000 kWh per month, and >1,001 kWh per month.
Utility companies, on the other hand, are in charge of running and maintaining the network of power lines and transformers. This network is also known as the grid. Utility companies are also in charge of fixing any issues that may arise, including fallen power lines and blackouts. Without utilities, there is no reliable electricity service.
A part of the electricity rates that you pay with your electricity bill goes towards utilities. Utility companies use this money to maintain the network, and they generally charge a flat monthly fee (usually $5-$10) and a variable fee (for every kWh of energy you use and they distribute to your house).
Currently, there are five utilities servicing the Texas state. Here are some details, including the contact details, in case you need to report a power outage. The five utilities working in Texas are:
- AEP Texas Central,
- AEP Texas North,
- Oncor, and
- Texas-New Mexico Power (TNMP).
AEP Texas Central & AEP Texas North
Both these utilities are subdivisions of AEP (American Electric Power) Texas. The company covers a transmission network of 39,000 miles in South and West Texas. If you live in the AEP Texas area and would like to report a power outage, you can do that on 866-223-8508.
CenterPoint Energy was established in 1882. CenterPoint Energy is headquartered in Houston, Texas, and it delivers power to a total of 2.5 million Texans customers. It works primarily in the Houston area and covers some 5,000 square miles of space. It uses an intelligent grid that can automatically detect and report power outages, so there is no need for a call even when the electricity is out.
Oncor Energy is the largest TDU in Texas. It delivers power to over 10 million Texans and maintains more than 100,000 miles of power lines. It was first established in 1882 and has since then grown steadily. It also maintains and lights over 420,000 street lights in Texas. You can report a power or street light outage on 888-313-4747.
Texas-New Mexico Power (TNMP)
Texas-New Mexico Power is a TDSP servicing more than 260,000 homes and businesses. The area it covers is focused around Dallas, south of Houston, and east of El Paso. If Texas-New Mexico Power is your TDSP and you experience a power outage, you can report it on 888-866-7456.
Energy Plan Types In Texas
The next thing to know before trying to find the best electricity plan in Texas is that Texas electricity prices are also influenced by the type of energy plan you purchase. These plans are varied in the sense of how Texas electricity prices are calculated and where the energy comes from (renewable electricity or nonrenewable electricity). There are also special plans for residential and commercial customers. Here are some basic types of energy plans in Texas:
- Variable Rate,
- Green Energy Plans,
- Business Plans,
- Nights Free Plans, and
- No Deposit Plans.
Your fixed-rate plans are the safest energy plan type there is. These plans charge an average electricity rate that is slightly higher than with variable-rate plans. These plans help you have the peace of mind of knowing that your energy rates are fixed, regardless of the wholesale energy price fluctuations. Since this is the safest bet, we always recommend fixed-rate plans.
Your variable-rate plans offer very low energy prices during the colder part of the year. This gives you a great chance to save, but it also makes you more vulnerable to Texas electricity prices during cold storms and particularly hot weather. Variable-energy plans are the best solution for those who spend the hot Texas summers elsewhere or spend very little electricity in general.
Green Energy Plans
Green energy plans are the perfect solution for those who want to help nature and reduce their carbon footprint. Green energy plans or renewable-energy plans are offered by almost all electricity providers working in the state. These plans offer electricity that is produced by large-scale solar panel farms or by other means. Some of the most popular sources of renewable energy in the US include:
If you are particularly concerned about the climate and would like to do more than simply pay for renewable energy, you can also choose to install a small solar panel array on your rooftop. These solar PV systems can offset 100% of your energy use and save a lot of money in the long run. Solar panels in Texas and solar panels in California are great examples of how you can save every month. Alternatively, if you have a lot of land, you can make it work double as hard by installing wind turbines and letting them do the work.
Business energy plans or commercial energy plans in Texas come at an average electricity rate that is 28% lower than in the rest of the US. These plans are aimed at small and mid-size businesses. If you are the owner of one such venture, you can contact your local electricity providers and see what rates they can offer you.
Commercial electricity rates are usually customized to account for the unique nature of your business. Alternatively, if you use Texas electricity to run heavy machinery or have a huge business, you may even apply for industrial electricity rates. These rates are even lower than commercial electricity rates.
Nights Free Plans
Just when you thought Texas’s electricity rate couldn’t get any lower, electricity providers working in the state started offering Nights Free Plans. These plans allow you to pay nothing for the electricity that is used during the night for as long as your night usage does not exceed your daily energy use. If used wisely, this type of electricity plan can help down the effective average price of every kWh of energy you use.
Additionally, some electricity providers offer free weekends as well. These plans are aimed at those that spend most of their weekends at home, preparing for the busy week ahead. These energy plans offer great ways to save money, but again, for as long as your energy usage in the free zone does not exceed your use of paid electricity.
No Deposit Plans
If your credit score is high enough, any electricity plan can be a no-deposit plan. However, since most people do not have a very good score, it helps to know that there are energy providers which offer entirely no-deposit energy plans. These are usually fixed-rate plans, and they come in two forms:
- Pay-as-you-go electricity plans, and
- Prepaid electricity plans.
It is worth noting that these plans usually charge a higher electricity rate, so you may be better off paying that deposit after all. No-deposit electricity plans are best suited for students and people who move a lot. Having the peace of mind of knowing that you can end your contract term at any moment is another bonus of this type of electricity plan that should not be forgotten.
Important Things You Should Know About
As you browse dozens of electricity plan options offered in your area on Electricrate, you may notice that most plans rely on details such as electric usage and credit score and that many of them contain TDPS fees and attached EFL (Electricity Facts Label). As understanding, these terms is crucial if you want to compare electricity rates and choose the best electricity plans for your electricity usage, let’s dive right in.
Electric Usage is simply the amount of electricity you use in an average month. Depending on your electric usage, you will see that every electricity provider offers a separate electricity rate for every energy usage tier. Energy providers, in general, charge different electricity rates for every one of the tiers. The electric usage tiers are as follows:
- <500 kWh per month – perfect for apartments and small houses, two-member families, and all those who do not use a lot of electricity. Your electricity provider will always charge the highest electricity rate in this tier,
- 501-1,000 kWh per month – perfect for small to medium households and larger families, in general with up to 4 members. These energy plans offer mid-range electricity rates, and
- >1,000 kWh per month – perfectly suited for larger families and households with a lot of space to cool in the summer, these energy plans are perfect for those who have high electricity usage year-round. These electricity plans come with the lowest electricity rates in the state.
Knowing your credit score is also important when choosing the energy provider you want to work with and when you plan to compare electricity rates. In a nutshell, your credit score tells the energy provider about your ability to pay your bills online. With this in mind, your energy provider will choose how much to charge for your initial deposit. Your deposit gets lower as your credit score gets higher, and vice-versa.
What this means is that if you have a high credit score, you will pay very little in deposit money. In case you do not have a great score, you will pay a high deposit. Your electricity company may even decide to charge you $0 for the deposit if you have an excellent credit score of 750+. However, as the average American credit score is 698, you should expect to pay some deposit. The Texas PUC puts a cap on the deposit: it can be no more than 16% of your annual electricity usage.
TDSP fees or Transmission And Distribution Service Provider fees are the fees you pay to your utility company. These companies use this money to run the power grid and ensure a stable and reliable electric service. Your monthly electricity bill always contains these charges, and they can make up to a third of your energy bill. Whenever looking for a new energy provider, always check who the utility in your area is and the TDSP fees they charge.
Learning How To Read Electricity Facts Label(EFL)
Your Electricity Facts Label (EFL) is the ID card of your Texas electricity rate. All Texas electric companies have to present you with the EFL before you sign a contract. The EFL gives you a chance to see how affordable electricity rates truly are, as here you can see the energy price per kilowatt hour breakdown and the bundled price as well.
You should carefully read through the EFL. Here, you will see it has two parts: the Disclosure and the Electricity Price section. The Disclosure gives you basic information on the electricity service: energy mix, contract term, termination fees, renewable energy percentage, and other basic information you may need.
The Electricity price, on the other hand, offers a detailed breakdown of the energy price you will be paying per kilowatt-hour(kWh). It provides a detailed breakdown of the energy charges, TDU delivery charges, TDU monthly (flat fees), as well as the minimum usage fees and any available credits you may get.
The EFL also contains information on the energy usage tiers, as well as the prices for each tier. This means that the energy price overview you get is very detailed and important, so you should read it carefully. In case you have any questions, you can always contact the energy company and ask about the specific energy rate you would like to know about.
What is Energy Deregulation in Texas?
What is energy deregulation in Texas, and what does it mean for you? Energy deregulation means that the state opens up the energy market to privately-owned companies. It also means that the state does not interfere with how the electricity prices are formed but rather takes on a supervision role to ensure a fair market and equal access to electricity for everyone. The electricity and natural gas prices are then formed just like the prices of any other commodity: based on the supply and demand.
You, as a Texas resident, get to enjoy many perks of deregulation: lower energy prices, better customer support, and more variety of energy plans and energy rates. Fixed-rate and variable-rate plans biome available, and you get to choose what works the best for your household. This means more freedom and more control over your electric bill.
Is The Cheapest Rate The Best Plan For You?
The cheapest electricity rate does not necessarily mean that a residential electricity plan is the best for you. Cheap electricity rates usually include hidden fees and other charges that can significantly increase your monthly bill, even with low energy usage. A cheap electricity rate can also mean that you get no perks, such as free nights, free weekends, energy bill credit, or even freebies in the form of smart gadgets and a free home energy efficiency audit.
To choose the best Texas electricity plans, you should know your monthly usage, have a good knowledge of your energy habits, and have an energy-efficient home. Only then should you start looking for Texas electric rates that suit your needs. Do not hesitate to do some of the calculations yourself, as you will be surprised to see that the cheapest Texas electric rates often cost you more in the long run.
Comparing Electricity Rates in Texas
As Texas electricity rates are varied and come from dozens of Texas electricity companies, it is necessary to compare them. However, there are many factors to compare electricity rates in Texas by, so let’s try to break it down. Here are the steps you should take when comparing electricity rates:
- Understand your energy use (to choose the proper energy tier),
- Understand your energy habits (to take into consideration the freebies),
- Understand how you can lower your energy usage by working on energy efficiency (choosing a lower energy tier results in a higher per kilowatt-hour price of energy but reduces the overall energy bill),
- What type of plan would work the best for you (fixed-rate, variable-rate, no-deposit, green energy plan, etc.),
- What perks you may benefit from the most (free nights, free weekends, bill credits, low deposit, energy efficiency freebies, etc.),
- The right contract term (3-60 months in most cases),
- The energy source (green energy vs. non-renewable energy),
- Bundled electricity rates that Texas residents living in your area pay for,
- How high the early termination fee is.
By going through these steps one at a time, you will understand what kind of electricity plan you need and what electricity rates you can afford. Make sure to understand that the lowest rate is not always the best and that the most expensive rate is not always the best either. Always ask, call, and ask to see the EFL – your electricity rate ID card. You can also check out the flat fees and TDU charges for each utility working in Texas:
|Company Name||Monthly Flat Charge||TDU Charges per kWh||Total Charges for 1,000 kWh|
Importance of Customer Service When Choosing An Electric Company
Yet another important factor to consider when choosing your electricity company is how good its customer service is. Many Texas energy companies that offer suspiciously low energy rates have poor customer service. Saving on this vital part of any business is one of the ways you bring down the prices of electricity service.
Since the Texas electricity market is a deregulated market, it is worth noting that all Texas electric companies sell exactly the same electricity. One way to stand apart from their competition is by offering great customer service and customer experience. Always compare Texas electricity rates with their customer support in mind – in case you do not get it, you may be overpaying your services.
Texas Electricity Rates vs National Electricity Rates
Texas electricity rates are some of the lowest in the country. As Texas electricity companies work in a deregulated energy market, Texas residents get to enjoy all the perks that their electric supplier brings to the table. Among other perks of energy deregulation, the Lone Star State residents also enjoy residential electricity rates that are 8% lower than the national average.
Besides this, commercial energy rates in the state are 28% lower than in the rest of the country. So, moving to Texas means a lot of low electric rates to choose from. Whether a business owner, a resident or even an industry giant, having a few extra bucks in your pocket at the end of every month can mean all the difference. Here is a breakdown of the top ten low electricity rates states in the US for December 2021:
|State||Energy Deregulation Status||Residential Electricity Rate per kWh||Commercial Electricity Rate per kWh||Industrial Electricity Rate per kWh|
|District of Columbia||No||$0.1339||$0.141||$0.0761|
|U.S. Average Total||Partial Deregulation||$0.1375||$0.112||$0.0716|
Electricity Shopping Thru Zip Code
The best and the fastest way to quickly compare dozens, if not even hundreds, of Texas electricity rates offered in your area, is through Electricrate. Simply visit the website and enter your ZIP code. Electricrate is a service that takes the ZIP code, finds all the Electricity rates in Texas for your ZIP code area, and delivers them to you on a single page. A coherent solution, Electricrate saves you a lot of time.
The Electricrate website offers different filters so that you can narrow down the Texas electricity rates you can see. After you enter your ZIP code, you can filter the plans based on the average usage, provider, contract term length, and source of electricity. You can also sort the results based on the price and the term length. The results also featured green energy, the most popular and best long-term electricity plan offered in your area.
As there are dozens of Texas electricity providers offering great average electricity rates, choosing the best rate for you can be a challenge. However, with a great tool like this one, you can quickly browse plans offered to Texas residents and choose the best for you. Retail electric providers can sometimes get a bit sneaky with their pricing, so always make sure to contact them first and clear any doubts you may have. This will ensure you have more control over the electric rates you pay and, ultimately, over your electric bill.
How much does it cost to get electricity?
To fully wire your house, you should cash out anywhere between $3,000 and $8,000. These expenses cover the labor, cost of materials, outlets and power points, wires, and the switchboard, while fixtures and appliances are not covered. When deciding to wire your new home, always contact several contractors and see what their pricing is. Beware of suspiciously low deals and ensure a reliable and safe connection to your home.
Are electricity rates going up in Texas?
Yes, electricity rates are going up in Texas. A part of the reason for the increase is the normal inflation rate. Another part is that the price of fuels used to generate electricity has gone up as well. Furthermore, led by the bad experience with the winter storms of 2020/2021, many retail electric providers have upped their electricity prices to ensure that future additional costs could be covered without bringing into question the company itself.
Who has the cheapest electricity rates in Texas?
Frontier Utilities and Express Energy offer some of the best Texas electricity rates. These two companies offer electricity rates starting as low as $0.075. This means that you could be paying around 40% less for your power than the national average. The next best Texas electricity rates are offered by Gexa Energy and 4Change energy. These two companies offer fixed-rate plans for as little as $0.076 per kilowatt-hour.
What is the best electric company in Houston?
Express Energy, Just Energy, and Frontier Utilities are considered the best electric companies in Houston, TX. These companies offer incredibly low electricity rates, starting at $0.089 per kilowatt-hour. This means that you could save hundreds a year by simply switching to one of these Texas electricity providers.
When choosing the next power plan for your household, you should be able to compare Texas electric rates so that you can choose the best electricity plan for your household. If you live in deregulated areas, this means that you have more control over your electric bill. To ensure you can make a good decision, read our instructions, visit Electricrate and enter your ZIP code. Here, you will find all you need to make a good decision and save money in the long run.