Best Energy Companies in Texas: Finding the Best Rates & Plans For You

how to choose electric company in texas

Who doesn’t want to save a few bucks here and there, right? And with electricity being one of life’s essential commodities, shaving a few centavos from your per-kilowatt-hour payment will undoubtedly aid your goal. That’s why aside from implementing conservation measures to lessen your power consumption, looking for electricity companies that offer the cheapest electricity rates is the way to go.  

Texas residents have it good when it comes to getting the best electricity deals. Not only does the Lone Star State have its own power grid, but it’s also one of the places in the country with a deregulated electric service. As such, regulators don’t set the state’s electricity rates, giving Texans the liberty to choose their electric company. 

However, having the freedom to pick the electricity provider you want to work with also comes with some caveats, such as inadvertently choosing electricity plans with hidden charges that lead to bill surprises.  

If you live in Texas and want to ensure that you get the cheapest electricity rate for your home or business, you may want to compare several electric companies to determine which one offers the most affordable electricity plan.   

What is Deregulated Electricity?

In a regulated electricity scenario, utilities typically own and operate everything associated with electricity. From the generation of electric power down to the meters that go into the consumer’s home, all are owned and controlled by the power utilities. In the meantime, state public utility commissions set the power rates, which the utility companies must follow.   

In contrast, a deregulated market limits the control of the electric utilities to distribution, operations, and maintenance of the facilities from the point of grid interconnection to the meter. The utilities then bill the consumer for those services. Delivering electricity to power customers is the responsibility of the Retail Electricity Providers (REPs). REPs come by different names — electricity providers, electricity companies, energy providers, and so on. But their function remains the same, which is to supply electricity to homes and businesses.   

Retail Electric Providers in Texas

Because of deregulation, Texas electricity rates vary. Moreover, they also offer a mix of different plans, so choosing the best electricity provider is not a one-size-fits-all proposition. It all boils down to what power company tailor-fits your needs and money-savings goals. Comparing the different electricity companies and stacking each one against your criteria will lead you to the best choice.  

Here are 10 of the most trusted electric providers in Texas.   

#1 Reliant Energy

A well-established and one of the largest power providers in the Lone Star State, Reliant Energy is known for its gimmick-free energy plans and outstanding customer service. They may not offer the lowest electricity rates, but they get high marks for helping consumers find ways to reduce energy consumption, which leads to lower electricity bills.  

#2 Cirro Energy

A sister company of Reliant, Cirro Energy became an active player in the energy market when Texas deregulated in 2002. Their plan offerings consist of variable and fixed-rate plans, bill credit plans, and 100% green energy plans. Although they have various electricity plans, these have basic features and are not cluttered with plenty of options, thus making it easier for consumers to come up with a choice that matches their needs.  

#3 Payless Power

Known as the best “no-deposit” electric company in Texas, Payless Power has been providing no-deposit prepaid electricity plans to consumers for more than a decade. Customers love them, not only because they don’t require deposits but more so because they offer some of the most affordable prepaid plans without bias to customer income or credit history.  

#4 Green Mountain Energy

Green Mountain Energy has been offering affordable Texas electricity rates for the past 20 years as a pioneer company in renewable electricity. What’s more, the energy they provide comes from 100% self-replenishing sources, such as sun and wind.  

Formerly located in Vermont, this power provider relocated their company to Austin, Texas, in 2000. Being the only electric company in the state that offers purely green energy, Green Mountain is in a class of its own.  

#5 Gexa Energy

If you’re on the lookout for a specific electricity plan, the chances are high that Gexa Energy has it. Tiered plans, green energy plans, targeted and flat-rate plans, name it, and it’s likely in their diverse list. 

But what if the plan you picked isn’t a great fit? Worry not. They have the 60-Day Happiness Guarantee that allows you to switch to another electricity plan without paying any penalty.  

#6 TXU Energy

Backed by 100 years of experience in the Texas electricity market, TXU is one of the most recognized power companies in the country. Before electricity service became deregulated in Texas, TXU Energy was the lone power provider in the Lone Star State.  

It is the first company in Texas that supposedly offered free electricity at night, and they still have the TXU Free Nights and Weekend Plans. They also have a range of fixed-rate electricity plans with one-year and multi-year terms.  

#7 Chariot Energy

Are you more inclined to use solar energy but can’t install solar panels in your home? You can turn to a power company that offers 100% solar energy plans. Chariot Energy‘s low to mid-range rates for solar-sourced electricity are at par with electric power that comes from fossil fuels.  

Their low fixed-rate plans and exceptional customer service make them a popular choice, especially for those who want to align their energy-saving goals with saving the environment.  

#8 4Change Energy

Ten years of experience in providing retail electricity backs this power company. Its A rating from the Better Business Bureau (BBB) is indicative of its brand of customer service.  

Besides offering electricity plans with affordable, straightforward energy rates, 4 Change Energy also contributes to society by donating 4% of their earnings to charity. That earned them the distinction of being ” an electricity company with a heart.”  

#9 TriEagle Energy

A top-quality power company in Texas, it has been in the electricity business for over a decade. TriEagle is the first electric provider to market smart thermostats to help lessen their customer’s electricity consumption.  

You get no-gimmick pricing and reasonable rates with this established power company.  

#10 Frontier Utilities

Another long-termer in the power business, Frontier Utilities offers a large number of energy plans you can choose from. They have 12-month and 2-year plans, green energy plans, and prepaid electricity plans.   

Frontier Utilities frequently has the cheapest Texas electricity rates, especially for customers that use over 2,000 kWh per month.  

Types of Electricity Plans in Texas

Fixed-Term Plans

The fixed-term plan sets the price you pay for your electricity at a specified rate for a set period, usually 12-24 months. This energy plan protects you from fluctuating power prices because even if the per kilowatt-hour cost of electricity goes up, you’ll still pay the same rate for the contract duration.  

However, signing up for a fixed-term electricity plan doesn’t mean that your utility bill will be the same month after month. How much you pay still varies depending on the Electricity Facts Label (EFL). Of course, the more electricity you use, the higher your monthly bills will be.  

A fixed-term electricity plan usually has an early termination fee.  

Variable-Rate Plans / Month-to-Month Plans

While a fixed-rate electricity plan locks in your per kilowatt-hour rate, with variable rate plans, the amount you pay for power fluctuates depending on the price of electricity on the energy market. This can work to your advantage if the prices drop because that means you’ll spend less for your consumption. However, if the rates go up, so does your electricity bill.  

You can still save over time by choosing a variable plan from the electricity providers in your area. Still, the uncertainty surrounding power prices makes it pretty challenging to budget your monthly expenses.  

One advantage this plan has over fixed-rate plans is the fact that it usually doesn’t come with an early termination fee. However, this is not a sure thing, and you need to check with your electricity provider before signing the contract.   

Prepaid Plan

Electricity companies also offer prepaid electricity services to help consumers better manage their power consumption and expenses.   

Under prepaid energy plans, you pay a fixed cost at the start of the month for a specified amount of kilowatt-hours, replenishing your balance as you use it up. Instead of a monthly bill, you receive notifications on your mobile device or email to let you know how much power you’ve consumed and how much you still have left.  

Because you pay upfront for your power usage and you get to keep track of your consumption, you avoid bill shock with prepaid electricity plans. Moreover, most of the cheapest electricity providers are usually the ones that offer this service.  

Time of Use

When you are under the standard pricing structure from your electricity provider, you pay the same amount for your energy consumption throughout the day. Whether you use power in the morning, afternoon, or evening, the price per kilowatt-hour does not vary.  

Under a Time of Use (TOU) electricity plan, however, the price of electricity rises and falls depending on what time you use it. There are so-called peak hours and off-peak hours.  

Peak hours are times when there is a high power demand. This often occurs in the early evening, when people have just gotten home from work. Meanwhile, off-peak hours cover the period when the overall electricity demand is lowest, such as late in the evening when most people have gone to bed. The cheapest electricity rates fall within this period and subsequently rise to their peak during periods of high demand.   

The electricity rate companies charge under the Time of Use plan may also vary according to the season, during weekdays vis-a-vis weekends and holidays.   

Electricity rates in Texas peak during the busiest times, between 1-7 p.m. Partial peak hours happen from 10 a.m. to 1 p.m. and again between 7 and 9 p.m. Outside of those mentioned hours, you get to enjoy off-peak Texas electricity rates.   

Renewable (Green) Plans

In your search for cheap electricity rates, you may have come across energy companies that offer renewable electricity plans. This refers to electric power coming from energy suppliers that replenish naturally. These typically include solar, hydro, biomass, wind, and geothermal power.  

Signing up for a green energy plan doesn’t mean that you get the electricity straight from a specific renewable source, such as wind or solar. Instead, you’re paying the electricity providers to purchase green energy and include it in their grid mix. As such, part of your electricity usage will be coming from renewable sources.  

On average, the energy usage of US households comes to around 877 kilowatt-hours a month. As such, every residential power consumer that uses green energy plans makes an impact in reducing the country’s carbon emissions.   

Solar Plans

You will benefit by using solar electricity plans if you install solar panels in your home. They work through the net energy metering (NEM) scheme, a billing mechanism that allows solar energy users like you to feed excess electricity back into the grid. In return, you get credits on your electricity bill.  

During the day, especially when the sun shines brightly, your solar panels would most likely produce more electricity than you need. That excess energy flows back to the grid. In exchange, your electricity company will give you credits on your electric bill for the power you sent them.  

Your solar energy system can usually generate enough electricity to meet your power demands for the whole year. But the amount of energy produced will vary depending on the season and weather situation. There will likely even be times when the electricity produced won’t be enough for your needs.  

With net metering, you can use the credits given to you by the electricity company for those instances when the energy coming from your system falls short of the demands of your home.   

Average Billing

With various Texas electricity plans to choose from, you won’t run out of options when it comes to your quest for the best electricity rates. One of the energy plans power companies in the state offer is the average billing.  

With this electricity plan, your 12-month average electricity usage becomes the basis of your bill. This means you pay the average amount every month instead of getting a higher bill during months of high energy usage and a lower one in low-usage months. As a result, budgeting gets easier because you can easily predict the how much you’ll need to set aside for your energy expenses.  

Pay-as-you-go

Pay-as-you-go belongs to the list of Texas electricity plans you can consider to maximize your energy efficiency and savings. It works for consumers who have smart meters and allows them to advance payment on the power they’ll consume.  

With this electricity plan, you purchase the power you need through the authorized agents of the electricity company you work with. Depending on the type of smart meter you have, you can avail of the energy credits using different methods such as keys, tokens, smart cards, or prepaid power cards. Some energy companies let you purchase the tokens using online services or through smartphone apps.   

The electricity rates in the pay-as-you-go electricity plan are the same as when you’re issued an electricity bill. Still, you get to see savings on your power use because you can monitor your energy usage and adjust your consumption accordingly.  

Factors to Consider before Selecting an Electricity Plan

Although you have the power to choose your energy company, finding the cheapest electricity provider can be a bit tricky, with the number of available electricity plans being one of the major reasons. Add to that, each electricity company in Texas has various energy plan offerings.  

Let’s look at some factors to consider that will aid in your search for the best electricity company in Texas that offers an energy plan that suits your situation and money-saving goals.  

House Location

With several factors affecting electricity rates, it comes as no surprise that the price per kilowatt-hour varies depending on where you live. Power plant availability, energy market competition, and local fuel costs in the locality typically influence the average price of electricity.  

Because of energy deregulation, the rates Texas electricity companies offer differ, so you’ll have to compare the plans and services available in your area.  

Electrical Usage

You’ll need to determine your average monthly usage to know what energy plan will help you save money on your power costs. For this process, you’ll need to go over several of your bills to know your monthly consumption.  

Unfortunately, it takes a bit of research to calculate your expected consumption because the average electricity rates in Texas vary depending on several benchmark usage levels. These are for 500 kWh, 1000 kWh, and 2000 kWh. To add to the confusion, the various energy plans have different rate calculations depending on those benchmarks.  

To determine the price per kilowatt you can expect to pay, divide the amount of your monthly bill by the number of kWh you consumed. Better yet, look for an energy provider that does the calculation for you. Some require you to simply enter your zip code to come up with your expected bill based on the electricity rates in your area.  

REP Customer Service

Because you’ll be working with the energy provider for a long time, you’ll want someone responsive to your needs. If a problem crops up with your electricity service, you don’t want to wait for ages before you get a response from the power company. So before making your choice, look at the company’s customer service. Is there someone to answer your queries or attend to your needs 24/7? Do they get back to you quickly, and are you satisfied with their actions?  

You can get an idea of the quality of their service by asking for a consultation or free quote. Your initial interaction with the company will show how they will treat you if you get them as your new energy provider.   

With so many Texas electric companies to choose from, you can afford to be picky to ensure you come up with the best choice.  

Contract Length

The contract length tells you how long the rate stated in the agreement is good for. It also indicates the length of time you’re bound to the utility provider.   

You’ll need to decide whether to go for a short-term or a long-term contract because each offers benefits that may or may not suit your situation. Carefully weighing the pros and cons of the plan’s contract length will let you save on your energy costs in the future.  

Short-term contracts usually cover a period of less than a year. The typical durations are six-month, three-month, and month-to-month electricity plans. The electricity rates will either stay the same or vary depending on the contract’s length. With month-to-month electricity plans, the power rate may change each month.  

Meanwhile, long-term contracts are usually good for 1-5 years, and the standard contract lengths are 12 months, 24 months, and 36 months. Although this type of contract requires bigger commitments, it also offers the benefit of price stability. With a long-term plan, the electricity rates remain the same through the duration of the contract regardless of the price movement on the energy market.   

Things You Should be Aware of

Cheap electricity plans abound, not just in Texas but in states with a deregulated energy market. But like we mentioned at the start, you’ll need to exercise caution in choosing an energy plan because not all power companies are forthright when it comes to their plan offerings. Some resort to gimmicks that hide their real per kilowatt-hour rate, causing bill shock when you see the amount you have to pay.  

Determining the real electricity rate is not your only consideration in picking the energy plan that works for you. Let’s go over the things you need to look out for, especially if you’re switching electricity companies.   

Energy Usage Conditions

With some energy providers, reduced usage doesn’t automatically lead to lower electricity bills. That’s because the majority of electric providers stipulate a minimum consumption level for their energy plans. This means that even if your electric usage falls below the specified level, you still pay the plan’s indicated minimum usage charge.  

The listed amount and other stipulations associated with the minimum usage charges affect the electricity rates associated with your energy plan and how much you spend on your electricity bills.  

Hidden Fees

As the term implies, hidden fees are undisclosed additions to the rates you thought you were actually paying. So don’t assume that if a utility company’s advertised electricity rate is $0.11 per kilowatt-hour, that’s the exact amount you’ll be charged with. The chances are high that other fees will jack up your power expenses.  

These additional fees can cost you a bundle, and sadly, you might not even notice what extra expenses went into your bill because the additions are sometimes so well-hidden. To avoid hidden fees, you’ll need to understand your electricity bill. Look for the utility provider’s Electricity Facts Label. This section indicates the electricity rate based on your consumption. It also lists other charges that will be stacked onto your per kWh payments.  

Others

Some power companies will charge all their overhead expenses on unsuspecting customers if they can get away with it. So you’ll need to exercise due diligence to ensure that you pick the power provider with the least added costs. Here are some other ways electric companies charge more for the power you use:  

  • Demand/Capacity charges: This is a fee that offsets the difference between the amount of electric power customers expect to have (the demand) and the actual amount of electricity they consume.  
  • Environmental cost: This charge involves the amount of green bucks it takes to mitigate the effects of burning fossil fuels to generate electricity.
  • Distribution charge: Power providers incur expenses in delivering electricity from the network into your home, and they pass that on to you. 
  • Misleading price per kWh: Electricity rates vary depending on factors like time of use, usage level, and the like. Some electric companies quote the lowest price when they advertise their rates to attract more customers. 
  • Underuse charge: Surprisingly, if you don’t use enough electricity to make providing the service worth the electric company’s while, they pop in this extra fee. This goes into the cost of maintaining the distribution network for low-volume power users like you. 
  • Disconnection/Reconnection fee: When you stop electricity service for a certain period, you’ll incur charges on your bill for the cost of disconnecting and reconnecting the power supply from the grid to your home.  

How to Switch Electrical Companies in Texas?

Switching electricity providers in Texas is pretty straightforward. In some instances, you’ll just need to enter your zip code on a website, do some research regarding the different power companies, and sign up with the utility provider that best meets your criteria.  

Here are a few pointers to make the switch to the new power company as seamless as possible.  

  • Check your eligibility: Although most of Texas is under a deregulated market, some areas are not. You can check your status on the websites of most electricity companies when you enter your zip code.   
  • Check your contract status: Find out if you’re still bound to your current power supplier and for how long. Canceling the service before the end of your contract usually requires you to pay early termination fees or similar charges. In most cases, switching to a new provider near the end of your contract with the old one lets you skip the termination fee.  
  • Research on the different power companies: You’ll want to ensure you’re moving to one that offers more affordable electricity rates and better services. Head over to comparison sites and read the reviews on the different utility providers in your area.  
  • Choose your plan and sign up: Electric companies let you sign up on their website. Most power providers in Texas perform a credit check, so be ready with your social security number. 

FAQs

Which country has the most expensive electricity?

Germany charges the most for their electric power with electricity rates of around $0.37 US dollars per kilowatt-hour, plus the additional taxes. Compare that with US electricity prices that come to about $0.15 for every kilowatt-hour. Meanwhile, the country with the cheapest electricity price in Libya with $0.004 per kWh.  

Does leaving plugs in use electricity?

Sockets with no device or appliance plugged into them do not produce electricity because there must be a complete circuit for the current to flow. As such, pulling plugs off empty sockets doesn’t do anything, and it won’t add to your energy-saving efforts.  
It’s a different story if you leave your electronics plugged into a socket. Many modern appliances and devices slip into standby mode instead of turning off entirely when you use a remote control to switch them off. In such cases, the device continues drawing power from the socket, and the kWh adds up over time.  

What uses the most electricity in a home?

Your HVAC system draws the most electric power in your home. If you’re like the average US household, the amount you spend to keep the temperature in your home at a comfortable level accounts for 46% of the total electricity expenditures. Depending on some factors, such as the efficiency of your unit and the weather conditions, your air conditioning and heating system can suck up between 28-63 kWh a day or about 850-1,950 kWh in a month.   

Is 50 kWh a day a lot?

An average US household consumes a little over 29 kWh a day, and Texans use more, with an average of 39 kWh in 24 hours. Still, various factors, such as home size and the weather, affect energy usage, so 50 kWh a day is reasonable.  

Conclusion

Choosing a power company that offers the best rates and services requires a certain degree of effort. But the time and energy you put into your search will be well worth it. Not only will it help you avoid bill shock, but it can also lead to savings on your utility bills.  

With the sheer number of electric companies in Texas, you won’t run out of choices. You can also check out electricrate.com, which provides a list of the Retail Electric Providers (REPs) in Texas along with the energy plans they offer.  

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