My Electricity Provider Is Going Out of Business in Texas – What Do I Do?

If you suddenly find out that your electricity provider is going out of business in Texas, don’t panic. You will not be left without power. Under the Texas Administrative Code, a Provider of Last Resort (POLR) serves as a backup electricity provider in the deregulated areas of Texas if your chosen retail electricity provider (REP) is unable to continue its services. A POLR is a REP that takes in new customers under certain market conditions, especially when an electricity provider exits the business. 

According to the Administrative Code, POLR “ensures that it is available to any requesting retail customer and any retail customer who is transferred to another REP by the Electric Reliability Council of Texas.” POLR provides uninterrupted electricity to affected customers as an interim energy supplier until they switch to a new REP.  

Every two years, the Public Utility Commission of Texas (PUCT) designates specific REPs to serve as POLR in every electric utility service region in the state. PUCT is a state agency that regulates the state’s utilities. Typically, PUCT requires that the largest REPs serve as POLR, while smaller REPs can volunteer to be POLR.

1. You will get notification from three sources about your REP leaving the market.
   • PUCT will communicate with you by email or phone that your REP will no longer be in business and that you are scheduled to enroll with the POLR in your area. 
   • Your current REP may notify all its customers about the expected changes in service.
   • Your POLR will contact you about your new power plan after being transferred to a POLR.

    

2. Fifteen days after activating a service, your POLR may require a deposit from you unless you have selected another provider. Low-income customers may be eligible for deposit assistance.
3. If you decide to keep the POLR rate, you will have 60 days to choose another plan with the POLR or switch to a different REP. There is no early termination fee for switching to a new REP within the first 60 days.
4. Even if your provider has gone out of business, they are required to return any unused portion of your deposit.
5. POLR rates tend to be much more expensive than standard REP service rates because of the changing customer base and associated electricity load changes. It is worth inquiring from your POLR about lower rates or fixed-rate alternatives from other REPs to reduce your costs.

You’ll need to consider your energy usage, budget, and what type of plan you want. ChooseEnergy.com can help you find a new plan or provider. Enter your ZIP code at the top of the page to find plans from providers in your area. While the electricity rate is important, you’ll need to consider additional factors before deciding on a new plan.

Plan type

Variable rates: Variable rate plans require no monthly contract and have no cancellation fees, but the rate you pay per kilowatt-hour (kWh) can change every month according to market conditions. You will pay a lower rate during low electricity demand but pay more when the demand increases. Because there is no binding contract under a variable plan, you can switch to another plan at any time. 

Fixed rates: You are locked into the same rate for your contract with a fixed-rate plan. Such plans require entering a contract for 12 or 36 months. Transmission and delivery fees or taxes can change under a fixed-rate plan, but the kWh rate does not change. 

Rates

Prices: There is a general uptick in electricity rates due to higher temperatures, growing demand, and other social factors. Transparency with our customers means that we will update new rates across the deregulated energy market in Texas. Prices from our providers are up by about 2 cents per kWh in some cases. That equates to about $25 a month for the average Texas user.

You could see gimmicky rates on various marketplace websites, where prices can start low and increase after a short introductory period. The ChooseEnergy.com marketplace does not offer plans with appealing rates that quickly increase.

Term

Electric plan terms can vary from six months to three years or longer. Longer terms give you greater rate stability. Shoppers can lock in a new rate/plan 90 days before it’s activated.

Ratings

We independently rate providers based on a number of factors. Learn more about providers and find one that meets your needs on the Choose Energy marketplace. If you’re not familiar with a provider, check out its rating in our marketplace (enter your ZIP) or on our providers’ page.

Get more information about changing providers in our guide to switching.