5 Steps to Switching Electricity Providers in Texas

Jan 10, 2024

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Is it time to switch electricity providers? If you’re among the 85 percent of Texans that live in a deregulated area, you have the power to choose your electricity company. Yet with more than 130 Retail Electricity Providers in Texas offering an endless array of complicated power plans, it may feel easier to just stick with what you know. 

While there may be a lot of choices out there, this shouldn’t hold you back from exploring your electricity options. After all, switching your power company in Texas is easier than you think. Follow these simple steps and you’ll be well on your way to having the perfect electricity plan for you. 

Review Your Current Electricity Plan

Switching electricity providers is easy, but doing so in a way that works for you takes a bit more effort. That’s why your first step should be to look at your current plan’s contract. Knowing what you’re paying now will help you figure out what a good deal is, as well as if there is an early termination fee or any other information you should be aware of before comparing electric plans. 

Look out for this information when you review your current plan’s contract:

Current Electricity Rate Per Kilowatt-Hour

The per kilowatt-hour (kWh) rate you’re paying for electricity is likely the most important information to look out for on your current plan’s contract. However, more goes into your electric bill than your rate. Generally, the amount you pay per month also includes a base charge and a delivery fee from your Transmission and Distribution Utility (TDU). Understanding all that goes into your monthly bill will help you compare what you have to electricity plans offered by other companies.

Contract Term Length

How long is your current contract? When does it end? Getting answers to both questions is important. Knowing how long your current contract is lets you evaluate if that contract term length works for you.m Additionally, your contract’s end date may have a big impact on your termination fee. Some providers charge a flat rate to terminate early while others base this fee on the number of months left in your contract. However, you won’t owe an early termination fee if you change providers within 14 days of your contract expiration date. Understanding how it all adds up may help you decide when to make the switch.

Renewal Rate

Your current power company will offer you a renewal rate before your contract expires. This may include updated plans that differ from what you have now. The renewal rate may be noticeably higher than what you are paying now, which is why it’s a good idea to compare it to what other providers are offering. 

Type of Rate

An electricity plan can have a fixed, variable, tiered or time-of-use rate. Whether you’re happy with your current rate type or you want to make a change, understanding how you’re being billed will help you choose your next electricity plan.

  • A fixed-rate electricity plan has a rate per kilowatt-hour that is locked in for the entire contract. This rate type tends to offer predictable billing. However, your overall payment may increase due to changes in delivery charges or administrative fees.

  • With a variable-rate electricity plan, the rate you pay is based on current market prices. With a variable rate, you may see more fluctuation in your monthly bill. However if prices fall, you may save money as well.

  • A tiered-rate electricity plan charges a flat monthly rate for electricity use up to a certain limit.  Electricity use beyond that is billed on a per kilowatt-hour basis. For example, you may pay a flat rate for all use up to 1,000 kWh, with any additional consumption charged as an add-on. 

  • Time of use rates are determined by the cost of electricity at the time of the day that it is used. This may include free weekend or free night electricity plans.   

Determine What Kind of Plan Works Best for You

Today, there’s a lot more to consider beyond the price per kWh. From month-to-month to renewable electricity plans, there are many kinds of power plans that cater to every type of energy consumer in Texas. Before you start shopping around, consider what kind of plan is the best fit for your lifestyle and how you use energy. 

Month-to-Month Electricity Plans

Are you going to be moving soon? Want an energy plan with few commitments? Then a month-to-month electricity plan may be the best option. The rates may be a little higher than long-term energy plans due to fluctuations in market prices, but not being locked into a contract gives you the most flexibility. 

Extended Length Long-Term Energy Plans

On the opposite end of the spectrum are energy plans with extended term lengths. These power plans were made for consumers that know their needs aren’t going to change anytime soon. It’s common to see 12-month electricity plans, but longer 24-month and 36-month plans are also an option with some REPs. Although you’re signing up for the long haul, the advantage here is that your rate will be locked in for the entirety of your contract.

Renewable Energy Plans

More consumers are conscious of where their energy comes from and if it’s generated by renewable resources. If it’s important to you to support the production of renewable electricity, there are many 100% renewable plans to choose from. However, renewables partially power many electricity plans today. You can check an energy plan’s Electricity Facts Label to find out the percentage of renewable content.  

Free Nights and/or Weekends

The peak hours for energy use in Texas tend to be Monday to Friday from 1 p.m. to 9 p.m. The Electricity Reliability Council of Texas (ERCOT) has issued conservation appeals to limit energy use between 2pm and 8pm to avoid straining the electric grid. To encourage consumers to use less energy during the period when demand is highest, some REPs will provide electricity for free on the weekend and later at night. It can be a money-saver for anyone that either isn’t at home during peak times or can adjust their consumption so that more energy is used during the off-peak hours. Just be sure you calculate the overall cost since the price per kWh may be higher anytime it isn’t free.

Prepaid Energy Plans

It’s possible to pay for your electricity use in advance with a prepaid energy plan. There’s typically no credit check or deposit and you’ll know how much you’re paying for electricity each month. But the rate could be higher than postpay energy plans, especially if you have a variable rate prepaid plan. This type of energy plan is best for consumers that are consistent with their energy use and know exactly how much electricity is used each month. 

You’ll find a variety of electricity plans with Lone Star Energy, and they all have something in common. Every plan we offer is straightforward and easy to understand. It’s Texas electricity made simple. Find out more about our electricity plans in your area.

Compare Offers From Electric Providers

Now that you know what rate you’re signed up for, it’s time to see how that compares to the current cost per kWh average in Texas and what electric providers are offering. Electricity is a very volatile commodity. That means the price can go up or down at any time depending on a number of factors. 

You can find the average price per kWh in Texas for the previous months on the Energy Information Agency (EIA) website. You’ll also see how that rate compares to the year before as well as the current U.S. average. The information gives you a better idea of whether you can expect rates to be higher, lower or about the same compared to when you signed up for your last electric plan. It’s also helps  you compare offers from Texas Retail Electricity Providers that operate in your market area.

There are a few different online comparison tools specifically for residents in deregulated energy markets that can help consumers find and compare electricity plans in Texas. These search tools are just a jumping off point for finding electricity providers in your market. You can use them to narrow down the list of potential electric providers and make the comparison process more efficient. 

However, you need more than a snapshot and basic information to make a decision that’s going to impact your monthly finances. To find the absolute best electricity provider you’ll want to visit each provider’s website and get specific details about their current energy plans. While doing so, you’ll want to pay attention to the Electricity Facts Label.

Electricity Facts Label

When you’re reviewing plans from electricity providers, make sure to check out the Electricity Facts Label (EFL). The EFL has all of the essential information you need to determine which electricity plan fits your needs the best. 

The Public Utility Commission of Texas (PUCT) requires that REPs supply an EFL for every energy plan. It’s part of the plan’s contract along with the Terms of Service. What is included in the EFL and the format are standard for all providers, making it easier to compare plans. The whole reason that Electricity Fact Labels are required is so that consumers understand the terms of an electric plan and aren’t caught off guard by surprise expenses. 

EFLs specify all the related terms and expenses for an electricity plan, not just the kWh rate that’s advertised. Items that you’ll want to pay attention to include:

  • Plan type

  • Start date for the energy contract

  • Energy rate - the price per kWh you will pay

  • Average monthly price per kWh for 500 kWhs, 1,000 kWhs and 2,000 kWhs

  • Base charge or minimum usage fee

  • The Transmission and Distribution Service Provider (TDSP) delivery charges

  • Contract length

  • Early termination fee

  • Security deposit amounts

  • Usage credits

  • Percentage of renewable content for the energy being consumed

There will also be a disclosure chart that summarizes all of the key points for the power plan. 

Choose an Electricity Plan & Complete the Enrollment Process

You’ve compared rates and researched the electricity companies that serve your area. Now you’re ready to commit. The good news is the actual process of switching electricity providers is just as easy as shopping for anything online. You can sign up with a new electricity provider either through a marketplace or on the electric company’s website. 

To start new electricity service with a new company, you’ll need to provide: 

  • Your first and last name

  • Email address

  • Phone number

  • Service address or Electric Service Identifier (ESID) number

  • Drivers license number

  • Social Security number

  • Whether you are switching service or moving to your address

  • Requested start date

If you’d like to talk to someone before signing up, you can call the provider to initiate service.

Sit Back and Wait for the New Service to Start

Enrolling in a new electricity plan in the Lone Star State is as easy as it gets. Thanks to how Texas’ electricity market works, you typically won’t need to do anything else after you make the switch. That’s because your new electricity provider will end your plan with your current company and communicate with your TDU to ensure everything goes smoothly. 

Although your new electricity company will handle the transition, don’t be surprised if your current provider tries to win you back. They may offer a better rate than your renewal rate, a gift card or some other perk.

Congratulations! You’ve done your homework, found the right electricity plan and taken full advantage of Texas’ deregulated energy market. All you need to do is relax and wait for your first bill to arrive. 

Are you looking for a new electricity company? Lone Star Energy is here for you. From Corpus Christi and Houston to Dallas and Fort Worth, we offer straightforward power plans with competitive rates and friendly customer service. We’re Texan through and through. If you believe in no-nonsense electricity, you’ll feel right at home with us. Shop for your new power plan here.