A Guide To Finding The Best Electricity Companies In Texas

You're ready to make the move to a different electricity provider.

You know that there has to be better deals out there, but don’t know where to even begin looking.

The number of electricity providers is dizzying, and you aren’t even sure what you need to be looking for.

Fortunately, there is an easy way to make sure you get the best electricity rate possible.

By the end of this guide, you’ll know exactly how to find the best electricity companies in Texas.


Why Are There So Many Electricity Companies In Texas?: Understanding Deregulated Electricity

You know what they say, everything is bigger in Texas.

In terms of electricity usage, this is especially true. According to the U.S Energy Administration, Texas produces more electricity than any other state.

For electricity companies, there is money to be made and for most of the state, any electricity company can get in on the action.

The Texas electricity market is flooded with electricity companies for one main reason— deregulation. A deregulated electricity market means that individual electric companies can sell electricity directly to consumers.

How Does Deregulated Electricity Affect You?

What does a deregulated market mean for you?

Options, options, and more options. As a consumer, you have the choice in which electricity company to give your business to— assuming the Texas city you live in is among the many participating in deregulation.

However, with great power comes great responsibility. With so many options, it can be difficult to figure out who the best electric provider in Texas is for you.

What Is A Retail Electric Provider?

Where there is deregulation, there are retail electric providers (REPs).

An REP is a retail company that sells electricity to the public. In Texas, there are over 160 REPs, all vying for consumers.

Not all REPs are alike.

REPs can vary by different factors such as:

  • Offering different rates and plans
  • Having different contract stipulations and fees
  • Servicing different areas

This can make finding the best electricity provider for you all the more confusing.

How Can You Find The Best Energy Companies In Texas?

Finding the best electricity companies in Texas by yourself is no easy feat, and the sheer volume of REPs to choose from alone can make the process of choosing a provider seem daunting.

The process of comparing dozens of electricity companies can take days, even weeks.

Instead, our partner Power Wizard has a Free Savings Estimate Tool that will compare all of the electricity companies in your area and find the best plan for you in just under 5 minutes.

Understanding Your Electric Bill: What To Expect From Electricity Companies In Texas

You receive an electric bill that is way more than what you were expecting.

You may be asking yourself, how is this possible? Where are all of these charges coming from?

In order to fully understand your electric bill, it’s important to know which factors can potentially influence the total amount of your bill.

Let’s take a look at some possible factors.

Why Kilowatt Per Hour Charges Are Not All That Matters

As you scroll through electricity rates, you’ll notice that electricity is charged by kilowatt usage per hour (kWh).

So finding the best electricity companies in Texas should be easy, right? Just pick a company with the lowest prices for kWh.

Not so fast.

The kWh price tag is not a sole indicator of the most beneficial electric provider for your home. There are multiple additional factors to consider including:

  • Minimum Usage Fees
  • Free Evenings and Weekends
  • Hidden Fees
  • Summer vs. Winter Charges
  • Cancellation Fees

Minimum Usage Fees

Some companies may boast a low kWh rate, but require a specific amount of kilowatt usage per month.

Imagine, you think you’ve scored a great rate of 8.3 cents per kWh on your electricity plan. However, you end up receiving a much larger than expected bill at the end of the month.

Upon review, you find that your plan requires a minimum usage fee of 1,000 kilowatts per month. You only used 983 kilowatts for the month, and now instead of paying that good-looking rate of 8.7 cents per kWh, you have to pay a rate of 10.7 cents per kWh for not meeting the minimum usage requirement.

Free Evenings And Weekends

Some companies offer Free Evenings and Weekends plans, which incentivize consumers to use energy during off-peak hours.

These types of plans can look especially attractive, but make sure to read the fine print. Rates for these plans can be high and in some cases, a monthly charge may apply.

Hidden Fees

Always read your contract carefully.

A cheap kWh rate can mean very little if you have to also pay hidden fees like:

  • Disconnection/reconnection fees
  • Payment processing fees
  • Customer service call fees
  • And more

Summer Vs Winter Charges

When choosing an electric provider, it’s important to note that electricity prices go up and down all the time, especially with seasonal changes.

This is especially important to note if you are looking at pay-as-you-go or variable rate plans, where your electricity rate can change month-to-month based on current market prices.

These types of plans may not work for everyone. Depending on electricity usage, a fixed plan with a higher kWh rate may be more beneficial in the long run.

Cancellation Fees

You have signed a contract with one energy provider only to discover another company that offers a more beneficial plan for your energy usage.

However, you learn that you can’t cancel your contract without paying a large cancellation fee, making you question whether the move is even worth it.

Before signing onto a contract, always check for a cancellation fee and contract term in mind.

The Best Electricity Company In Texas Depends On The Consumer

There is no single “best” electric provider in Texas.

The best electricity provider for you will depend on a number of personal factors, including:

  • Electricity usage
  • The size of your home
  • The age of your home
  • The size of your family
  • Which zip code you live in

How Much Electricity Do You Currently Use In Your Home?

Your historical usage plays a large role in deciding which electricity provider is best for you.

For example, if your historical usage averages about 1,000 kilowatts per month, it wouldn’t make sense for you to sign a contract for a plan with a minimum usage requirement of 2,000 kilowatts a month.

Additionally, your historical usage can help you pin-point which type of electricity plan is best for you:

  • Fixed-rate plan: You pay the same fixed rate throughout your contract.
  • Variable-rate plan: Your electricity rate varies month to month based on market prices.
  • Indexed-rate plan: Your electricity rates vary month to month based on natural gas prices.
  • Time of use plan: You pay a regular rate for usage during peak hours and an incentivized rate for usage during off-peak hours.

You can figure out how much electricity your home uses by using a kilowatt calculator.

How Big Is Your Home?

The size of your home will impact who the best electricity companies in Texas are for you.

For example, your energy usage is going to be vastly different if you live in a 3,000 square foot home vs. a 1,500 square foot apartment.

The more space you have, the more electricity your house will need to use. Because of this, the same type of plan can produce varying results for different sized houses.

If you have a larger house, you may benefit more from a plan with a minimum usage requirement, while a smaller house may struggle meeting a minimum usage requirement.

What Is The Age Of Your Home?

The age of your home also matters.

If you are wondering why your electricity usage is so high, take a look at when your house was built.

Older houses can be less energy efficient. A home that was built in the 1970s vs. a home built in the 2010s will not use the same amount of electricity.

Older appliances can also be less energy efficient and require more electricity usage. Updating to newer, more energy-efficient appliances can help reduce the amount of electricity used.

How Many Members Of The Household Are There?

It may come to you as no surprise that the number of people in your home can affect your electricity usage, especially if you have children that often forget to turn off the lights.

More household members means more lights being turned on and more appliances being used. A family of six will use more electricity than a person living on their own.

For a large household, a minimum usage plan may be beneficial, whereas a household of one or two could probably benefit from a time of use plan like free nights and weekends.

What Is Your ZIP Code?

Not all electricity providers service every area in Texas.

This can affect the electricity prices and number of different REPs available in your area.

When searching for an electricity provider, make sure that you search for electricity providers available in your zip code.

Finding Out Which Electric Company Is The Best In Texas For You Is Easy**

Our partner, Power Wizard, makes finding the best electric provider for your home a breeze.

Power Wizard instantly finds the best electricity plan for you and takes care of enrollment so you never have to lift a finger.

In the meantime, Power Wizard monitors your electricity usage and calculates your cost while scanning the current market to ensure you’re getting an unbeatable rate.

If a better rate is discovered, Power Wizard will immediately notify you and give you the option to switch.

Find out just how easy it is to get the best electricity rates possible with Power Wizard.

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