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Some Electrifying Facts About Picking a Power Company in Texas

The Choose Energy Team
By The Choose Energy Team May 18th, 2016
4 min read
For business

Moving to Texas?

Are you one of the 1,000 people per day that move to Texas? Things in the Texas market are different than much of the United States. In 1999, the Texas Legislature passed a law that made it possible for consumers to choose their own electric company (deregulation). The new law was passed to encourage free market competition and lower prices. Not all of Texas is deregulated; some municipalities and cooperatives were not required to deregulate, so customers in those areas may not have choice.

How do I find an electricity company?

You know your move-in date? Have power turned on that day! It really is that easy. On Choose Energy, enter your zip and pick the best plan for you and complete the process on our site. No hassles of phone calls or being up-sold and we’ll remind you when your plan is going to expire. You will receive your first electric bill from your new electric company on the following billing cycle.

How do I choose the right company?

That depends on a few things:

  • How long will you be there? If you are moving into a home you’ve purchased, choosing a longer-term plan will help you “set it and forget it.” 24-month or 36-month plans take any risk of pricing going up off your plate.
  • How big is your home? Pricing for Texas plans depend on the size of your home. If you live in a small apartment, you’ll likely use 500 kWh/month. A small home? 1,000 kWh/month. A big home, especially one with a pool, likely more than 2,000 kWh/month. Pricing varies based on the size. Most households use an average of 1,000 kWh/month.
  • Do you want to go green? You can choose a renewable energy source to power your home without any solar panels or wind turbines. Look for the % green and that reflects what part of the electricity you purchase comes from renewable sources.
  • Do you want incentives? Some plans offer thermostats or gift cards with signup. You get a visa gift card or a trip out to your favorite restaurant.  
  • Credit. In order to sign up for electricity supply in Texas, you’ll need to pass a credit check. If you have credit problems or a low credit score, you’ll be asked to pay a deposit or you have the choice of selecting a pre-paid plan. Prepaid plans provide service on a “pay-as-you-go” basis. These plans require close monitoring or accurately estimating your electric usage to avoid disconnection.


Who are these companies?

The Texas market is highly competitive; no matter which supplier you choose, your electricity will be delivered over the same set of poles and wires that are regulated by the Texas PUC. The Public Utility Commission continues to regulate this delivery of electricity to ensure the safety and reliability of your electric service.

Things to watch out for

You can find the details on the Electricity Facts Label for each plan to confirm all the ins-and-outs of what you’re signing up for. A few things in particular:

  • Early termination fees. Many plans charge you for switching before the plan is complete. Make sure you’re comfortable with that charge. ETFs are not charged if you move.
  • Monthly fees. Some plans have a monthly fee. These can make the effective rate MUCH higher than they show. For example, if you use 1,000 kWh/month (a small home), and are comparing a 7 cent plan without a fee to a 6.5 cent plan with a $10 monthly fee, the 6.5 cent plan is actually 7.5 cents/kWh.
  • Minimum usage fees. Many electric companies require that you use a minimum amount of electricity each month. Our shopping tool allows you to see if a company requires a minimum usage and if there is an associated fee or credit
  • Customer service. Calling customer service can be an additional charge for some suppliers.
  • Online billing. The supplier you choose will be your biller. Some suppliers charge for NOT choosing online billing and mailing you a bill. Check if that matters to you.
  • Variable rate plans. Mostly we do not have variable rate plans as they can subject you to energy price fluctuations. Variable rate plans have no monthly contract or cancellation fee, but the rate you pay per kWh can vary from month to month. Your rate can go up or down based on the market and the discretion of your electric company. Variable plans allow customers to benefit from falling market prices, but they also have an increased risk for higher rates if electricity prices spike due to natural disasters, cold winters, or adverse market conditions. The rates different companies charge each month varies, but because customers can switch any time, companies have an incentive to keep their rates low.

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