How to Shop Smart for Electricity in Texas

How to Shop Smart for Electricity in Texas

If you live in Texas and have tried shopping for the best electricity plans, you know that it’s the Wild West out here!  Because our energy market was deregulated in 2002, you’ve got Retail Electricity Providers competing for your business, and some of them aren’t all they’re cracked up to be. Marketing gimmicks abound, as does confusion about how to choose the right plan for you. But never fear! We’re here to help bring method to the madness.  

What Is a REP, Anyway?

Let’s start with the basics. There are two major players in bringing electricity to every home and business in Texas. The first is the Transmission and Distribution Utility (TDU), which is responsible for all of the infrastructure like substations, transformers, and power lines. The TDU is assigned based on your location. Back in the day, prior to 2002, the TDU also set the price of electricity and brought it to your home, but our state leaders saw that there would be an advantage to customers to creating a competitive market for energy. 

So they deregulated energy in Texas, creating an opportunity for Retail Electricity Providers (REPs) to spring up. REPs buy energy on the wholesale market and sell it to you. You get to choose which REP you work with, comparing plans and choosing the one that best suits your needs and your budget. The price they set is based on the fluctuating cost of generating energy and demand for electricity, among other factors.   

Fixed, Variable, And Indexed… Oh My! 

There are three major types of rate plans, two of which are ideal for homeowners. 

Fixed Rate Plans

If you’re looking for predictability in your bills, this is the way to go. REPs will offer you plans based on the amount of electricity they predict you will use, based on considerations like the cost of generating electricity, the climate of the area where you live, predicted weather patterns, and more. They will offer you a plan where your electricity rate is fixed for 12-36 months, depending on the length of your contract. Your bill will go up or down based solely on the amount of energy you use, and any change in government fees. 

Variable Rate Plans

On the other hand, if you are the type of person who likes more control over how you spend your money, then look at variable rate plans. You can modify your energy usage based on how much energy costs throughout the day – for example, you can turn down your thermostat in the evenings, when more people are using the AC, appliances, and devices, and so energy prices are higher. This means shifting some of your behaviors, such as doing laundry or charging an EV overnight, but the savings can add up.    

Indexed Plans

If you’re a business owner, you might want to look at an indexed plan. Also known as a market rate plan, it calculates rates based on variables, or indexes, that are publicly available – such as the cost of natural gas that month. The REP uses a formula to determine the price of energy based on the index, which must be disclosed in your contract. This type of plan is particularly good for major manufacturers, which draw a lot of energy. 

Where to Start, When Choosing a Plan

First of all, it’s important to pick a REPutable REP (see what we did there?). Brush off your Google skills and do some research into customer reviews, looking especially for a REP that is known for having no hidden fees or switcheroos once your contract is signed. Also look for a REP that has great customer service and is responsive to your questions and needs, when they come up.  

Comparing Apples to Apples

Once you’ve narrowed down the list to REPs that you can trust, it’s time to do an apples to apples comparison of rates and plan offerings. 

Do a quick survey of your past electricity use, by looking at your bills for the past year. Each bill will note how many kilowatt hours (kWh) you used that month, so add the kWhs for each month up and divide by 12 to give you an understanding of how much energy you require.  

Next, start looking at plans. You can go to the individual websites of REPs that offer service in your area, or use a rate comparison tool like the one found at ComparePower.com. Each REP will detail a rate by kWh, helping you make a selection. However, be sure to dig beneath the surface to find out if there are any additional costs fees, which every REP is required to disclose (although some do so in the fine print). 

You can also save by signing up for special plans like variable rate plans mentioned above, or by picking a longer-term contract to lock in a rate. Some REPs even offer discounts for going paperless and other incentives. 

Once you have narrowed things down to a couple of options, before you sign a contract it’s a good idea to review the Electricity Facts Label (EFL) for each one. The Public Utility Commission of Texas (PUCT) requires all REPs to give an EFL for every plan they sell, helping customers make informed decisions by providing transparent and comparable information – including the type of rate, the percentage of renewable energy, and the cost of delivery.

At Energy Texas, we offer fixed rate plans for 12, 24, or 36 months, so you can choose the one that suits you best. 

What About Renewable Energy Plans?

Renewable energy is better for the environment, because unlike power generated from fossil fuels it doesn’t create dangerous emissions that are released into the atmosphere. It’s also better for the grid, because the renewable infrastructure that has been built is newer than existing infrastructure which has been around for decades. 

But it’s also better for you. The cost of renewable energy is dropping and has been doing so for the past 15 years, thanks to government policies and maturation of the industry. Between 2010 and 2022, the average cost of electricity solar and wind power became competitive with fossil fuels. In 2022, the average cost of solar photovoltaic electricity was 89% lower than it was in 2010, and almost one-third less than the cheapest fossil fuel. And the average cost of onshore wind electricity was 69% lower than in 2010, and slightly less than half the cost of fossil fuel. 

For these reasons, and because we love our planet and want to preserve it for future generations, at Energy Texas we only offer 100% renewable energy plans. They’re reliable, affordable, and better for the world we share. 

Shop with Energy Texas to Save 

Our plans are straightforward, with the competitive pricing you want and the excellent customer service you deserve. If you’re looking for a plan that is affordable and powered entirely by renewable energy, then visit EnergyTexas.com to learn more.