To compare electricity plans in Texas, analyze rates, review the Electricity Facts Label, identify hidden fees, and align the plan with your actual energy usage for the best value.
Did you know that Texans can lose hundreds of dollars each year just by choosing the wrong electricity plan? With so many providers and plans to sift through, it’s easy to get lured in by a flashy low rate, only to be hit with extra fees that inflate your bill.
Many folks end up choosing plans based solely on their advertised price per kWh, but that’s just the tip of the iceberg. In this guide, we’ll help you navigate the complexities of electricity plans in Texas, highlighting common pitfalls, potential contract risks, and how to find a plan that truly fits your home’s needs.
- Electricity Plans Overview
- Plan types at a glance
- Contract length, pricing, and risk
- Credit, deposits, and no-deposit options
- Compare plans the right way.
- Match the plan to your home and routine.
- Fees and fine print to check on the EFL
- Switching, Moving, and Outage Basics
- Ready to pick a plan? Shop real prices for your usage on ComparePower
- Frequently Asked Questions
Electricity Plans Overview
Finding a plan that matches your actual usage, not just the advertised rate, is what matters most. Always verify every cost before signing anything.
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What plan should most Texans pick today?
For most Texas homes, a fixed-rate plan brings the safest bet and usually the best value. Fixed-rate means the price terms stay the same for the contract length, though your actual kWh rate still shifts with usage.
Variable or indexed plans? Those might seem tempting when the weather’s mild, but they can wallop you with price spikes during a Gulf Coast summer.
When shopping, always dig into the Electricity Facts Label (EFL) for the average price at 1000 kWh. Don’t trust that number by itself; a slight change in your usage can tip the balance, especially with bill credit or tiered plans.
Don’t forget the TDU charges from your local utility, Oncor, CenterPoint, AEP, or TNMP, since those get added on no matter which provider you pick. Sometimes they’re bundled, sometimes not.
PowerToChoose, run by the PUCT, lists a ton of plans, but reading the EFL for yourself helps you avoid the ones with sneaky gimmicks.
The 3-step compare method: Read the EFL, run your kWh math, check fees
Step 1: Read the EFL
Check for the base charge, bill credits, and the exact per-kWh rates at different usage levels. Make sure the math adds up to the stated averages.
Step 2: Run your kWh math
Use your last 12 months of usage to figure out the effective kWh rate for each plan. That’s what you’ll pay, not just the advertised rate.
Step 3: Check fees
Review the Terms of Service for details on non-recurring fees, late payments, disconnects, and any additional penalties. Some companies tack on hefty charges that wipe out any savings.
Plan types at a glance
Each plan structure affects your price stability, flexibility, and risk in its own way. Knowing the contract terms and how rates get calculated can help you sidestep expensive surprises.
Fixed-rate plans
With a fixed-rate plan, the price per kilowatt-hour stays put for the entire contract. This shields you from those sudden ERCOT market spikes that hit Texas in August. Contracts usually run 6 to 36 months. Longer terms bring more stability, but you might get stuck if rates drop..
Fixed-rate plans give predictable bills and protection from wild market swings, but you’ll face early termination fees if you bail early and might pay more if wholesale prices dip. If stability matters and you’re planning to stay put, this type fits the bill.
No-contract month-to-month plans
No contract electricity plans in Texas let you pay month-to-month, skipping any long-term commitment. The rate can change anytime, depending on your REP’s pricing whims.
You can switch providers with no penalty, handy if you’re moving soon or think rates will drop. These plans offer flexibility and no early termination fees, but rates can jump without warning, and bills get unpredictable. Short-term flexibility works if you closely monitor your rates.
Time-of-Use, free nights, free weekends, EV
Time-of-use plans charge different rates depending on when you use power. Free nights or weekends sound nice, but you’ll pay more during other times.
If you can shift heavy usage to off-peak hours, say, charging your EV overnight, you might save. These plans are suitable for individuals who are willing to adjust their schedules.
Potential savings and EV-friendly rates are the upside. The catch? Higher rates at peak times and the need for disciplined scheduling.
Prepaid pay-as-you-go (suitable for poor credit and no deposit)
Prepaid, no-deposit electricity plans allow you to pay ahead and view your balance daily. No credit check or deposit required, which works if your credit’s taken a hit.
The downside: rates usually run higher than postpaid plans, and you’ll lose service if your balance hits zero. No deposit or credit check is required for short-term or temporary housing, but you’ll need to monitor your account closely.
Indexed plans in plain English
Indexed plans tie your rate to a public index, usually ERCOT’s wholesale price plus a markup. Your bill changes every month with the index.
When wholesale prices drop, you win. When they spike, you pay. These plans offer transparency and the chance for low rates, but the volatility can be rough. Only pick this if you’re comfortable with unpredictable bills and tracking market trends.
Contract length, pricing, and risk
Choosing a contract length comes down to balancing stability and flexibility, factoring in Texas’s market trends and your risk comfort. Longer terms can lock in rates, but shorter terms let you adapt if prices shift.
6, 12, 24, and 36-month plans compared
Short contracts, such as a 6-month electricity plan, allow you to switch quickly if rates drop. They’re handy when prices might fall, but you could get stuck with higher renewal rates if prices jump.
A 12-month plan gives you rate stability for a year and lines up with Texas’s seasonal cycles, helping you avoid summer renewals when rates spike.
24-month plans shield you from rising rates for longer. If forecasts predict steady or rising prices, two years might make sense, but you’re locked in if rates drop later.
36-month electricity plans lock your rate for three years. That’s the most stable option, but also the least flexible. If rates fall, you’re stuck unless you pay to leave early.
| Term Length | Pros | Cons |
|---|---|---|
| 6 months | High flexibility | Frequent renewals, rate volatility |
| 12 months | Balanced stability | Annual renewal risk |
| 24 months | Long-term stability | Less flexibility |
| 36 months | Maximum rate lock | High commitment, ETF risk |
When short-term beats long-term
Short-term plans make sense when you expect rates to drop soon. They also work well if you’re moving or your energy needs shift, such as adding solar or a pool.
During volatile stretches, a 6-month plan or a month-to-month option keeps you from being locked into a high rate. Just remember, you’ll need to watch for sudden price jumps at renewal.
Renewal season matters too. Contracts ending in winter or early spring often bring better rates than those ending in the summer heat.
When a 36-month plan makes sense
Locking in for three years works best when rates are unusually low and forecasts point up. You get protection from inflation and those nasty summer surges.
It’s a good fit if you own your home and don’t expect significant changes in usage. You won’t have to mess with renewals as often, but you could miss out if rates drop. Always check that the early termination fee isn’t outrageous in case you need to get out early.
Early termination fees and renewal timing
Most fixed-rate plans in Texas come with an early termination fee (ETF) if you cancel before your contract ends. These range from a flat $150 to $20 for each month left.
PUCT rules say providers have to waive the ETF if you move out of their service area, but not if you want a better deal elsewhere.
Your renewal window usually opens 14 to 45 days before your contract expires. That’s the sweet spot for shopping without risking a fee. Renewing early can help you dodge summer price spikes, so always check rates during your window before deciding to stay or switch.
Credit, deposits, and no-deposit options
Large electricity deposits in Texas aren’t always required. If you meet certain credit or waiver requirements, or opt for prepaid/no-deposit plans, you can start service fast without a credit check.
When starting service, most Texas providers run a credit check. If your credit score is below about 580–600, they’ll likely ask for a deposit before turning on the lights.
Poor credit electricity in Texas
Those with lower credit scores usually need to pay a deposit to get service. That’s just how most Texas light companies cover their risk.
Poor credit doesn’t block you from electricity. You can still get poor-credit electricity in Texas by choosing plans designed for low scores, typically pay-as-you-go or prepaid REPs that waive the deposit and credit check.
Some providers offer same-day electricity in Texas for prepaid accounts. Just load money into your account and power up within hours. Keep in mind, these plans often cost more per kWh than standard fixed-rate options.
If you want to avoid high ongoing costs, compare both prepaid and deposit-required plans to see which one keeps more money in your pocket over time.
Deposit waivers and how to qualify
The Public Utility Commission of Texas (PUCT) lets customers skip deposits if they meet specific requirements. For example, showing “satisfactory credit” with a letter from a previous Texas electric provider, proving a full year of on-time payments, can get the deposit waived.
Texans 65 or older with no unpaid electric bills in the past two years also qualify. Other ways to avoid deposits include providing a guarantor, showing proof of medical indigence, or being an active-duty military personnel.
Some companies let customers break up deposits into smaller payments. Participation in programs like SNAP or Medicaid can also lower or eliminate deposits, depending on the provider.
Providers often want specific documents before approving a waiver, so it’s smart to ask up front to keep things moving.
No-deposit choices, including prepaid
No-deposit electricity plans allow Texans to get service without a hefty upfront payment. Prepaid, month-to-month, and some fixed-rate plans offer this, usually for folks with solid credit.
With prepaid electricity, customers pay in advance and keep an eye on their usage. When the balance drops, adding funds keeps the power on. While this setup offers more control, rates per kWh tend to be higher than those of traditional plans.
Big draws for prepaid include skipping the credit check and getting lights on fast, sometimes the same day. Upfront costs remain lower than standard deposits, but this comes with higher rates and the need to monitor balances closely.
Texans with good credit may find fixed-rate plans that don’t require a deposit, offering steadier pricing without the need for constant account management.
Compare plans the right way.
Comparing plans in Texas means looking past the surface. Real savings come from matching plans to actual usage, not just chasing the lowest advertised price.
Pull your last 12 months of kWh
Start by gathering a full year of usage history. Smart meter data or past bills show monthly kilowatt-hour consumption, which is crucial since Texas plans are priced at set levels, such as 500, 1000, or 2000 kWh. Summer usage can easily double winter numbers around here, so having the whole year’s data matters.
Downloading usage data from the provider’s online portal or requesting it directly provides a clear picture, helping to match any plan’s pricing to actual consumption instead of just guessing.
Calculate your effective rate for your usage.
Don’t trust the headline rate alone. Calculate the effective kWh rate by dividing the total monthly bill by the kWh used that month:
(Total monthly bill) ÷ (kWh used that month) = Effective rate
For example:
| Usage (kWh) | Total Bill | Effective Rate |
|---|---|---|
| 1000 | $132.60 | 13.26¢/kWh |
This approach factors in base charges, credits, and all those extra line items buried in the Electricity Facts Label (EFL). Running the numbers across several months reveals how rates shift as usage changes.
Spot bill credits, minimum-use fees, and base charges
Some Texas plans offer bill credits if you hit certain usage thresholds. For instance, a $50 credit at 1000 kWh sounds great, unless you use 950 kWh and miss it entirely.
On the flip side, minimum-use fees add charges if usage drops below a set amount, making low-usage months unexpectedly pricey.
Base charges tack on a fixed monthly fee regardless of usage. Digging into the EFL helps you understand how these interact with your habits, so you can avoid plans with pricing “cliffs” that spike bills out of nowhere.
TDU delivery charges you cannot avoid
Every bill in Texas includes Transmission and Distribution Utility (TDU) charges, separate from the provider’s energy rate. These cover grid upkeep and electricity delivery, and there’s no way around them.
TDU fees show up as a fixed monthly charge plus a per-kWh delivery fee. Since they’re regulated and not up for negotiation, always factor them into the effective rate. Ignoring these makes plans look cheaper than they are, so double-check your math before settling on a deal.
Match the plan to your home and routine.
Choosing a plan in Texas means matching rate structure to actual habits, home size, and appliances. The right match keeps costs steady in those high-usage months and steers clear of penalties for everyday routines.
Apartments and smaller homes
For apartments or smaller Texas homes, usage usually stays under 800 kWh monthly. Low-usage plans with little or no base charge tend to fit best.
Some fixed-rate plans charge more per kWh until you hit a certain threshold, so unless your usage reliably meets that, it’s better to avoid those. Checking the EFL for rates at 500 and 1000 kWh helps identify plans with flat pricing at these levels, which is often the best option for apartments.
Sound insulation and infrequent A/C use make low-usage plans even more attractive for keeping bills predictable.
Larger homes with daytime A/C
Larger Texas homes, especially those running the A/C during hot afternoons, benefit from high-usage plans that reward usage above 2000 kWh.
Tiered plans that spike rates in the middle usage range can sting, so it’s smarter to pick one with steady or lower rates after the first 1000–2000 kWh. Heavy summer A/C use means checking for seasonal rate hikes; some plans jack up prices in July and August, wiping out savings.
Always verify TDU charges in the EFL to get a true sense of the total monthly cost.
EV charging overnight
Owning an EV with a Level 2 charger opens up options for overnight charging plans. Some Texas providers offer free or discounted electricity during off-peak hours, usually 9 pm to 6 am.
It’s worth confirming that daytime rates don’t eat up the overnight savings. Matching the charging schedule to the plan’s free-hour window is key; even being off by an hour can cut into the benefit. Running flexible appliances like dishwashers or laundry overnight also helps maximize those free hours.
Solar homes and buyback plans
Texans with rooftop solar need a solar buyback plan in Texas that pays for extra electricity sent back to the grid.
Plans vary: some match the retail rate for exported kWh, while others pay less. It’s essential to check if credits roll over month to month or reset. If they reset, sizing the system and usage to avoid unused credits makes sense.
Some buyback plans cap the amount of credited kWh, so reading the EFL and Terms of Service closely before signing up prevents surprises.
Moving soon vs staying put
Short-term leases require short-term electricity options; contracts from 3–12 months help avoid early termination fees when moving. Month-to-month plans offer flexibility but often cost more, so it’s a tradeoff between price and freedom.
For those planning to stick around for years, a longer fixed-rate contract can shield against rising market prices. Always double-check early termination fees in the Terms of Service before committing to any contract length.
Fees and fine print to check on the EFL
Small fees and hidden rules in the EFL can increase the actual cost, even when the advertised rate looks good. Scanning for these details keeps surprises off the statement.
Base or minimum-use fees
Watch for base charges or minimum-use fees. Base charges stay the same every month, no matter how much electricity is used. Minimum-use fees kick in if usage drops below a set threshold, often 500 or 1,000 kWh.
These fees show up in the Electricity Facts Label (EFL) under “Average Price per kWh” notes or in the Terms of Service (TOS). For example, a $10 minimum-use fee on a 700 kWh month adds about 1.4¢ per kWh to the effective rate. Always add these charges to the total cost when comparing plans.
Some providers skip these fees entirely, so for folks with seasonal dips in usage, picking a plan without them keeps bills steady.
Bill credit thresholds and “cliffs”
Some Texas plans offer bill credits for meeting specific usage targets. The EFL spells out the credits and the exact kWh needed to earn them.
A “cliff” occurs when missing the threshold by just 1 kWh results in losing the entire credit. For instance, a $50 credit at 1,000 kWh vanishes if usage lands at 999 kWh, causing a sharp jump in the effective rate.
By checking the usage levels in the EFL’s table and running the numbers for months when usage might dip below the target, we can avoid nasty surprises. These credits work well for steady usage, but they’re risky if consumption bounces around.
Paper billing, AutoPay, and other fees
Paper billing fees, usually $2 to $5 per month, show up in the EFL or TOS. Going paperless avoids these. Some plans offer an AutoPay discount, but maintaining a valid payment method on file is required. Missing an AutoPay payment can wipe out the discount and trigger a late fee.
Other possible charges include connection fees, reconnection fees, and TDU pass-through charges for delivery costs. These details appear in the EFL and Your Rights as a Customer (YRAC).
It’s also smart to check the renewable content percentage if that matters; sometimes it affects plan pricing, too.
Switching, Moving, and Outage Basics
Paying attention to the details can help Texans dodge extra fees, move smoothly, and know who to call when the lights go out.
Switch at the end of the term without fees.
Texas rules let customers switch providers without paying an early termination fee (ETF) during the 14 days before a contract ends. The Public Utility Commission of Texas (PUCT) sets this window.
Checking the Electricity Facts Label (EFL) or calling the provider confirms the contract’s end date. Switching too early risks an ETF; these can run from $100 to over $200, depending on the plan.
There’s also a right to cancel a new contract within 3 business days after signing up, giving some breathing room to change plans or correct mistakes without penalty.
Signing up with a new provider kicks off the transfer process with the Transmission and Distribution Utility (TDU). There’s no need to cancel with the old company; the new one takes care of it.
Moving to a new address and ETF waivers
Moving within Texas allows customers to end electricity contracts early without an ETF, as long as they provide proof of the new address, like a lease or utility bill. The waiver applies if the address falls outside the current service area or needs a new account setup.
Transferring the plan to a new home is possible if the provider serves that area. Otherwise, picking a new plan for the latest ZIP code is fair game.
For move-ins, scheduling electricity at least 1-3 business days in advance helps avoid delays. Some areas offer same-day service, though it might cost extra.
Who to call for outages in each TDU area
When the lights go out in Texas, the right move is to contact your TDU, not the company that sends your bill. TDUs handle the wires, poles, and the actual repairs, so they’re the folks who get things running again.
TDU Outage Contacts in Texas:
| TDU | Outage Phone | Website |
|---|---|---|
| Oncor | 888-313-4747 | oncor.com |
| CenterPoint Energy | 800-332-7143 | centerpointenergy.com |
| AEP Texas | 866-223-8508 | aeptexas.com |
| TNMP | 888-866-7456 | tnmp.com |
| LP&L (Lubbock) | 806-775-2509 | ci.lubbock.tx.us |
Persistent or unsolved outages? The PUCT complaint portal lets Texans submit a complaint for review.
Ready to pick a plan? Shop real prices for your usage on ComparePower
If you want to shop the same way I do, head to ComparePower. Plug in your ZIP, set your monthly kWh, and sort by the total monthly cost that matches how you use electricity. Open the EFLs, check fees, then enroll online.
What you can do there;
- Compare fixed, no-contract month-to-month, time-of-use (free nights or weekends), prepaid, and indexed plans side by side.
- Filter by term length, including 6, 12, 24, and 36 months.
- Toggle no-deposit and 100% renewable options.
- See effective pricing at 500, 1,000, or 2,000 kWh, or use your usage.
- Open the EFL and plan details before you commit.
Compare plans and see how much you can save today. Visit Compare Power.
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Frequently Asked Questions
Christian Linden is a seasoned writer and contributor at Texas View, local Texas resident, travel enthusiast.and author of the Home Energy Playbook. He specializes in topics that resonate with the Texan community. With over a decade of experience in journalism, Christian brings a wealth of knowledge in local politics, culture, and lifestyle. When he's not writing, Christian enjoys spending weekends traveling across Texas with his family, exploring everything from bustling cities to serene landscapes.
