Your Guide to Choosing an Energy Supplier

If you live in one of the 15 states where energy is deregulated, you may be able to save upwards of 20% on your monthly electricity bill by switching energy providers. Switching doesn’t just make sense, though. The average household in the U.S. would save more than cents, too – $277.18 a year, according to the U.S. Energy Information Administration.

What’s stopping folks in deregulated states such as Texas and Pennsylvania from cashing in on those savings? The idea of switching energy providers can be potentially confusing if not downright intimidating. With this guide, we hope to make it easier by walking you through the different variables you’ll want to consider when comparing different providers.

When selecting an energy provider (also called a supplier or an energy service company), you should look carefully at three factors:

• The supplier’s reputation.
• The rate.
• The length of the plan.

There are lots of energy suppliers out there, and it can be overwhelming to select a one. That’s true not just for the first time but for every time. But don’t just throw up your hands and accept the price charged by your existing provider or utility. Deregulation gives you the power to choose cheaper electricity prices, and we’ll help you get comfortable doing it.

Why is the process overwhelming? In large part, it’s because some energy providers engage in deceptive marketing, offering super-low “teaser” rates that go up after a few months or by hiding significant fees or charges. Because energy deregulation remains a new concept to many, shady operators seized the opportunity to take advantage of consumer confusion.

Luckily for you, Choose Energy does all the vetting for you. We sift through each plan offered by each energy provider and only offer you ones without hidden teaser rates. In Texas, we show you “all-inclusive” rates, with transmission and delivery charges built in. (Providers in other states generally show only the energy supply rate.)

As for company reputations, we offer our energy provider reviews – objective looks at the providers with whom we work. You’ll get quarterly updates of ratings powered by factors such as customer service, online accessibility, and business history.

ChooseEnergy.com works with some of the best-known providers in Texas, including TXU Energy, Reliant Energy, and Direct Energy. It also works with providers newer to the state that offer new options, including Iberdrola Texas and Chariot Energy.

The second factor to consider in selection an energy provider is the rate for service. And what type of rate you want to pay.

With a fixed-rate energy plan, you’ll pay the same rates for service throughout the length of your plan. This is typically a better plan if you’re paying attention to your budget. When rates stay the same, the only variable is usage, and that’s something you control. Usage varies from month-to-month to the point that Texans use twice as much electricity in August as in April. So you’ll never  use the majority of your energy during “peak” (daytime) hours. But because rates are locked in, you’re protected against upswings in the wholesale electricity market. (Remember the summer of 2019 when prices soared in Texas.)

With a variable rate plan, your rate per kilowatt hour can change monthly because it is tied to the market price mentioned below. While you could pay a lower rate when prices go down – let’s be serious, do you remember prices ever going down for much of anything? – you also could wind up paying far more than you planned when they increase.

Rates themselves are tied to certain usage levels in Texas, generally 500, 1,000, and 2,000 kilowatt hours (kWh). An attractive rate at one of the levels can be much different at another. So make sure to tie your choice to realistic usage levels.

A third differentiating factor in selecting an energy provider is the plan length. It can be intimidating trying to select a six-, 12-, 24-, or 36-month plan. Whether you choose a short- or long-term plan depends entirely on your appetite for risk.

Each time you sign up for a fixed-rate energy plan, you commit to that rate for the length of the plan. If you leave the plan before it’s up, you’re usually subject to an early termination fee. (It’s right there in your plan’s Electricity Facts Label, some of the fine print a lot of people don’t read.) In Texas, there is an exception to the early termination fee for customers who are moving and can provide proof of their new address.

Something to keep in mind about rates is that prices for shorter-term plans are slightly higher than rates for longer-term ones.

Don’t keep throwing away $277 a year. Choosing a provider requires considering some options, but it isn’t hard. Now that you’re armed with the information you need to consider your options, enter your ZIP code to see what’s available in your area.

Once you select a plan, sign up either online or by phone, using the number on this page.

Still unsure? Our energy experts, also available at the number on the page, will walk you through the process and find a rate that’s best for you.