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Moving to a deregulated area? Here’s what to do about electricity

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By Arthur Murray May 13th, 2019
4 min read
For business

If you’re planning a move to a new state this summer, one of the first things you should do is check whether your new home is in a deregulated energy market. 15 states and the District of Columbia are deregulated, which can make residential electricity and natural gas bills much cheaper.

Among deregulated states are the following:

What is energy deregulation?

The concept sounds complicated, but deregulation is actually quite simple. If you substitute the word “choice” for deregulation, you’ll get the basic idea.

Customers in “regulated” states have no choice about their energy. They sign up with the electric utility that serves their area and pay the utility’s rates for service.

Deregulation has changed that for residents of certain states.

Customers in deregulated states can choose the company that supplies their energy, and suppliers must compete for customers. This competition can mean attractive incentives for customers, such as low prices, renewable energy mix, flexible contract lengths and customer rewards programs. In some states, these competing suppliers even include traditional utilities. (More on that later.)

Regardless of the supplier chosen, the local utility will continue to deliver power, maintain the lines, read the meters, and, in most cases, send a monthly all-inclusive electricity bill to customers.

All that’s simple enough, right? Now, it’s time to shop for plans: Here’s how to set up your home’s power, depending on which deregulated energy state becomes your new home.

Moving to Texas?

When it comes to deregulated energy, Texas is a little different from other states. About 85 percent of the state is deregulated, including Dallas, Houston, Corpus Christi and other large cities. In these areas, customers must select an independent supplier, called a retail electricity provider or REP.® can help you compare and shop a selection of plans from the most-trusted REPs in Texas. Simply enter your ZIP code at the top of this page and you’ll see the electricity plans available in your area from top retail electricity providers.

When shopping for an electricity plan, consider the following factors:

  • Type of plan: There are basically two types. Fixed-rate plans will charge the same for your electricity supply, depending on usage, throughout the length of your contract. Other parts of the monthly bill that come from your utility, such as transmission and distribution fees and various taxes, can change. Variable-rate plans can change each month according to market pressures. The Texas electricity market is extremely volatile right now, so we recommend you avoid variable-rate plans.
  • Price: Electricity prices can vary greatly based on usage. Texas plans generally show rates for three usage levels – 500, 1000 and 2000 kilowatt hours (kWh). Make sure you know which one you’re looking at and try to estimate your average electricity usage. (Hint: The average Texas usage is about 1,161 kWh a month.) Also, be sure to read the fine print.
  • Term length: Plans can range from six months to 36 months. Because of price uncertainty in Texas, longer-term plans could be the best option for keeping future bills low.
  • Renewable energy mix: Worried about your carbon footprint? Many Texas electricity plans are sourced by up to 100 percent renewable energy such as wind and solar. Rates for those plans have become more competitive, and often don’t cost more than traditional plans. To find a plan’s renewable mix, check the Electricity Facts Label.

Common questions you might have:

Here are some frequently asked questions from new Texas deregulated customers:

What happens when my plan ends? At least 30 days before your plan ends, your provider will contact you. You have three options:

  1. Continue service with your current provider, possibly at a different rate
  2. Shop for new service with or another marketplace
  3. Do nothing and get renewed by your provider at its default – likely higher – rate.

What do I do if the lights go out? Call the local utility – in Texas they’re called Transmission and Delivery Utilities (TDUs). They are responsible for maintaining and repairing power lines.

What happens if I move again? In Texas, you can get out of your contract if you’re moving to an area where your REP does not provide service – and you won’t have to pay an early termination fee.

Moving to a deregulated state that is not Texas?

Most of what appears above applies to other deregulated states, with two major differences.

Outside Texas, traditional utilities can compete with retail electricity providers – in New York, they’re called Energy Service Companies, or ESCOs. The rate they charge for electricity is called the Price to Compare (PTC).

Most plans outside Texas do not split rates into tiers, but they do have early termination fees – check that fine print to see what the fees are and how (or if) you can avoid them.

What if you signed up with a traditional utility before you knew you had choice? Relax, you’ve still got the power to choose a provider. Utility electricity plans are month-to-month, with no early termination fees. The only thing that will cost you to switch is a few minutes of your time, and if you can beat the utility PTC, you stand to save money.

Intrigued? Enter your ZIP code above and see what rates are available in your area.

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