Texas electricity rates and plans

Texas residents and businesses can choose their electricity providers from a competitive market. Choose Texas Power can help you take advantage of the energy shopping process and secure the best electric price for your home. Our free marketplace is a one-stop shop for comparing energy providers, finding cheap rates, and signing up for a plan. Enter your ZIP code or call the number on your screen to get started.

Average electricity rates in Texas

According to the most recent Energy Information Administration (EIA) data, Texas’ average residential energy rate is 15.61 cents per kilowatt-hour (kWh). For commercial energy, the state’s average rate is 8.57 cents per kWh. Both residential and commercial Texas electricity rates are less expensive than the U.S. average. Lower rates are beneficial because Texans consume large amounts of electricity due to higher temperatures.

Texas energy deregulation explained

When Texas deregulated its electricity market in 2002, most residents and businesses across the state gained the power to choose their electric provider instead of defaulting to the local utility company. As a result, electricity providers in the Lone Star State offer competitive rates and plan terms to gain business.

Deregulation can make it confusing for customers to sign up for the best provider and plan because of the wealth of options. Choose Texas Power is a free resource curated to help you find an energy provider and plan that fits your needs. Our guides can help you learn about buying energy in a deregulated market. We’ll explain the types of plans you’ll encounter, how to choose an electricity plan, and what to do if you want to switch to a different provider. You can also learn more about specifics on your electricity bill or find commercial electricity solutions.

Texas electricity plans

Secure a cheap energy plan with a reliable Texas electricity company in your area. Before choosing a plan, consider several of the following major factors.

Plan types

When shopping for energy providers and plans, it’s helpful to understand the different plan types available. Our marketplace features fixed-rate, variable-rate, and prepaid plans in Texas. Choose the one that best fits your needs and budget.

• Fixed-rate: A fixed-rate plan offers a steady electricity rate for a set term length. This plan type provides price stability and protection against market fluctuations. Note that you will likely pay an early termination fee (ETF) if you cancel a fixed-rate plan before the contract is up.
• Variable-rate: Variable-rate plans do not have a set electricity rate because they change with the energy market. Your bill may decrease during times of low demand but can rise during peak periods, such as the summer. This flexible option is best as a short-term solution because you do not need to commit to a contract and can cancel anytime without paying a fee.
• Prepaid: A prepaid plan requires customers to pay for electricity in advance, allowing for greater control over usage and budgeting without the need for an upfront deposit.

Contract terms

Most electricity plans last between 12 and 36 months, but shorter options are available with certain providers. Review the contract length and any ETFs noted in the Electricity Facts Label (EFL). Make sure you understand the terms and conditions before signing up. You can search by term length on our marketplace to find the best plans within your ideal time frame — enter your ZIP code on the Choose Texas Power marketplace and use our filters to explore your options.

Usage patterns

The best plan for you will align with your consumption habits. Review previous energy bills to understand your typical electricity usage patterns. Some plans offer free nights or weekends, which could be beneficial depending on when you use the most electricity. Our marketplace features reviews for popular providers such as TXU Energy, Direct Energy, and Reliant Energy to help you better understand their offerings and service ratings.

How to switch electricity providers in Texas

Switching your electricity plan is easy on Choose Texas Power. You may want to switch plans for various reasons, including moving, a cheaper rate, or a different contract length. Whatever your reason, our free marketplace simplifies the switching process. Learn how to change providers in minutes:

• Check your EFL: You may incur a penalty if you end your contract early. Before you start, you’ll want to review your plan’s Electricity Facts Label to learn about any potential fees.
• Enter your ZIP code: Your location determines which providers and plans are available to you. Search on our marketplace with your area code to browse your options. You can filter between contract length, rate type, renewable energy, and more.
• Pick a plan and sign up: Sign up directly on Choose Texas Power or call the number on your screen to navigate the process with the help of an energy advisor.

Deregulated energy shopping guide

When searching for affordable electricity plans, it’s important to understand the following key factors:

• Your Electricity Facts Label (EFL): The EFL contains essential details about your plan, such as the rate, the amount of renewable energy, contract length, and more. Read this document carefully to understand your payment structure.
• Your energy consumption: Your household’s monthly electricity consumption can significantly influence the rate you are charged. Many energy providers offer plans structured with tiered rates depending on your usage level. These usage levels fall into specific tiers — typically 500 kWh, 1,000 kWh, or 2,000 kWh. Each plan’s EFL will contain details on rates per usage level, if it has them.
• Your location: The area you live in can impact your electricity rate. Local utility companies set transmission and delivery fees (often known as TDU or TDSP charges), which can fluctuate based on your city.
• Your contract length: Energy companies often provide lower rates if you opt for a longer contract period. However, most fixed-rate plans require an early termination fee (ETF) if you cancel your electricity service early. Before enrolling in a plan, consider whether the term length is the right fit for you.

Texas electricity FAQ

Why are Texas electricity rates so high?

Texas’ average residential electricity rate is currently 15.61 cents per kWh, which is 18% higher than it was five years ago. Many environmental factors contribute to higher electricity rates, including increased demand in recent years, extreme weather, state population and size, regulatory changes, and more.

Which provider has the best electricity rates in Texas?

Electricity rates vary by provider and location. The best rates depend on your energy patterns and needs. After entering your ZIP code on our marketplace, you can filter by feature, rate type, contract length, and more to find the most suitable rates. If you’re interested in a 100% renewable energy plan, explore options from Gexa Energy. If you’re searching for the lowest rates, consider 4Change Energy or Frontier Utilities.

Will Texas electricity rates go up?

Texas electricity rates tend to rise in the summer between June and September when energy demand is higher. Shopping for electricity plans in the spring and fall may help you secure the lowest rates.

What’s the difference between an energy company and a utility company in Texas?

In deregulated areas, energy providers and utility companies have different roles. Providers sell and manage your energy plan, while utilities deliver the energy to your home, maintain power lines, and manage power outages. You choose your electricity provider and energy plan, but your utility company is assigned to you based on location.