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Electricity Rates

Electricity Rates: Understanding Rates, Providers, & Plans

Written by Sean Jackson


Edited by Aviva Hauser


Last Updated: February 15, 2024

Explore today's low rates and compare energy plans.

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Shop for deregulated electricity plans

If you live in an area with energy deregulation, you have the freedom to choose your electricity provider and plan. In regulated markets, your location dictates who you have to buy energy from. With deregulation, energy providers must compete for your business by offering affordable rates and diverse plan options. 

To find the cheapest electric company in Texas, enter your ZIP code on our free, independent marketplace. Doing this allows you to compare all of your options to quickly find cheap Texas electricity rates based on your home’s usage, renewable energy incentives, and more.

Compare deregulated energy states

Many states have deregulated energy markets. Cheap light companies compete for business in these areas by offering affordable energy plans and promotions to their customers.

For example, Texas energy deregulation has led to cheaper electricity rates for residents and businesses than the national average. According to the Energy Information Administration (EIA),

  • Average residential electricity rates in Texas were 10% lower than the national average as of November 2023.
  • Commercial power rates were also cheaper in Texas, about 36% less than the U.S. average.

Energy customers nationwide can profit from deregulation with lower prices. Currently, 18 states and the District of Columbia have deregulated electricity markets, allowing customers to shop for their own electricity companies.

If you are looking for a new energy plan or a cheaper electricity rate, Choose Energy can make the process easy. With our independent, unaffiliated marketplace, you can shop and compare energy supplier rates in your area at no cost. Find your state on this page or enter your ZIP code now.

Compare electricity rates in your area

Electricity rates vary due to many factors, including location, seasonality, the weather, and energy demand. For example, energy prices are often more expensive in the summer or winter when electricity demand is higher. You could secure cheap electricity in Texas if you shop during an off-peak time of year, like the spring or fall.

The most recent data from the EIA shows the average price for a kilowatt-hour (kWh) of electricity in the U.S. was 16.19 cents. North Dakota residents paid the lowest residential electric rates, at 10.74 cents per kWh. The highest rate averaged 43.53 cents per kWh for Hawaii residents. Compared to 2022, the national average increased by 4%.

Depending on where you live, you can secure a lower rate with the Choose Energy marketplace. Compare energy plans and shop for the best electricity rates from the top providers in your area. Enter your ZIP code to find a list of cheap energy company options near you. You can filter the results to sort your options depending on your energy goals.

Shopping for an electricity plan with Choose Energy

Whether you’re searching for the best electricity providers in Dallas, the best electricity rates in Houston, or somewhere in between, the Choose Energy marketplace can help. It’s free to use and can help you save time and money when shopping for the best electricity rates. Here are three easy steps toward energy savings: 

  • Enter your ZIP code. We’ll provide a list of available providers and plans in your area. Filter your results for specific features, providers, and term lengths.
  • Select a plan. Once you’ve found the right fit, sign up online or over the phone. Need some guidance? Call our energy experts at the number on your screen, and they’ll walk you through the process.
  • Enjoy your service. Your new provider will handle the switch with your utility company — you shouldn’t experience any power interruptions.

Electricity providers and utility companies

In deregulated markets, energy providers (suppliers or ESCOs in some states) sell electricity to customers through energy plans and manage billing. On the other hand, utility companies deliver energy to your home or business and maintain the power lines. They are also in charge of restoring power during an outage.

Choose Energy works with top providers in various states to show you a wide array of electricity plans and supplier rates to compare in one place. You can find reliable and affordable electric service from trusted providers on the Choose Energy marketplace. To learn more about available energy companies, visit our electricity providers page.

Understand electricity plans and options

The most common types of energy plans on our marketplace include:

  • Fixed-rate plans: You pay the same energy rate throughout your contract. If you’re looking to budget energy expenses and don’t want rate fluctuations, a fixed-rate plan is perfect for you. One thing to keep in mind, however, is that you may incur an early termination fee (ETF) if you cancel your plan before your term expires unless you move out of the service area.
  • Variable-rate plans: With this plan, your rate will change based on fluctuations in the energy market. Variable-rate plans are much more susceptible to seasonal changes and price spikes but can offer cheaper rates during off-peak periods. You are also free to switch plans when you need to without worrying about ETFs.

Electricity plan term lengths

Electricity plan term lengths depend on the type of plan and provider you choose. Standard terms include month-to-month, 12-month, 24-month, and 36-month options.

  • Month-to-month terms: These are usually only available with variable-rate plans, but you can switch plans whenever you want.
  • 12-month terms: These plans are excellent for renters with year-long leases or consumers who don’t want a contract for more than one year. You have flexibility and don’t have to shop more than once a year.
  • 24- and 36-month terms: Longer terms are only available at fixed rates and offer stability for those who want to “set and forget” their electric service. You will pay the same amount each month, regardless of higher usage.

No-deposit and prepaid electricity plans

The Choose Energy marketplace has no-deposit and pay-as-you-go energy plans for customers who want to avoid paying a deposit or don’t meet the credit threshold. Many of these plans also offer same-day connections to start your service.

Thankfully, the Choose Energy marketplace provides workarounds. You can sign up for a no-deposit plan, where you pay for electricity as you go. Once your balance runs low, you’ll receive a notification from your provider to top it off. Find all the no-deposit plans in your area by entering your ZIP code. 

Deregulated natural gas rates

Natural gas is also deregulated in some states, including California, Georgia, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania. To compare energy supplier rates for natural gas, visit our natural gas page and enter your ZIP code to find options in your area.

Energy buying resources

Want to learn more about selecting the best energy plan for your home or business? To make your energy-buying experience easy, explore some of our guides and helpful pages:

Do you have more questions? Check out our frequently asked questions page.

Frequently asked questions about energy shopping

Can I move my electric service?

Yes — most electricity suppliers allow customers who are moving to transfer their energy plan to their new home. You can also shop for a new energy plan and sign up for service before you move. Moving your electric service depends on where you live, so visit your state’s deregulated energy page to learn the specifics.

How do I switch my energy provider?

If you want to start service with a new electricity company, switching energy providers is easier than it may seem. If you already have an energy plan, determine if the company will charge an ETF for canceling your contract early. You can find this information on your plan’s Electricity Facts Label (EFL).

Next, enter your ZIP code to find plans and cheap electricity rates in your area. You can filter and compare the results to find the right option for your energy needs. From there, we’ll help you sign up for your new plan, and your provider will transfer your service.

Will I need to pay a deposit?

That depends on your credit score and the credit criteria your provider has. When you shop for plans using our marketplace, we’ll inform you if a deposit applies and how much it is before you sign up for service. You can also bypass this route by signing up for a no-deposit plan, such as a prepaid plan.

Does Choose Energy run a credit check?

We run a soft credit check that doesn’t affect your credit score, and we only run it once. Many of the energy providers we work with require a credit check before offering service.

Credit checks are a normal part of the electricity shopping process and allow providers to determine whether you need to pay a deposit. Visit our deposit guide for more information about the credit check process.

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