Texas Electricity Rates and Providers (May 2024)

Residents of Texas are fortunate to have the ability to choose their electric plan, with a variety of electricity companies offering plans that range in rate, length, and renewable energy percent. The table below lays out the cheapest plan provided by each Texas electricity company:

Overall, Discount Power currently has the lowest electricity rates in Texas at just 10.9 cents per kWh, around 25% lower than the average cost per kWh in the Lone Star State. However, we recommend Gexa Energy over Discount Power – for just 4 cents more, you can have a plan with 100% renewable energy and potentially only a 12-month contract. 

How To Choose the Best Electricity Plan

When searching for the best electricity rates in Texas, keep in mind that rates and the average cost of electricity can vary based on numerous factors, so you may be given a different electric rate than that of your neighbors. Here are a few things to consider:

Types of Electricity Plans in Texas

Most Texas electric companies will offer a few plan options for customers to choose from. Here’s an overview of the different types offered in the Lone Star State, as well as their advantages and disadvantages, so you can pick what’s best for your household.

Fixed-Rate vs Variable-Rate Plans in Texas

Just as it sounds, a fixed-rate plan allows you to secure a rate that will stay the same throughout the entire duration of your contract. Note that “fixed rate” does not mean that your electric bill will be exactly the same every month. Instead, it means the rate you pay per kilowatt-hour (kWh) of electricity won’t change. So, your bills will still be higher during months you use more electricity.

A variable rate means — you guessed it — the price you pay is based on variables in the energy market. The price per kWh will increase or decrease depending on supply and demand. If you prefer paying month-to-month instead of being locked into a length-based contract, you may consider a variable-rate electric plan. We saw the biggest risk of the variable-rate plan during Texas’ winter storm of February 2021, when millions were in the dark due to a massive power outage. Texans who kept their lights on paid the price, with at least one customer facing an electric bill over $16,700.³ Texas power companies were reportedly overcharged $16 billion dollars by the electric grid operator.

Green Energy Plans in Texas

Green energy plans are those that supply electricity from renewable energy sources. That’s going to be primarily wind and solar energy in Texas.⁴

Some REPs may have Green-e Verification or a similar certification to ensure that the electricity is responsibly generated, transmitted and distributed. Non-green energy plans, at least in Texas, rarely meet 25% of their total energy from renewable sources.⁵

Your Energy Usage

The amount of electricity your household consumes may affect the rate you pay per kWh. Most REPs offer tiered plans based on average energy usage. Tiered-rate energy plans are often called “V-shaped plans” because the rates are more expensive for people who use the least and most amounts of energy and are lowest for those in the middle.

For example, in a typical tiered plan, customers who use around 500 kWh or 2,000 kWh per month will pay more than those who use around 1,000 kWh per month. According to the EIA, the average Texas home uses around 1,094 kWh per month.⁶

Your Contract Length

The length of the contract will also play a factor in the cost of your electricity. As with most things, the longer you commit to one provider, the better deal you’ll get. We’ll discuss the different types of electricity plans in the next section.

A word of caution: Read the fine print and ask questions before you sign.

Many contracts come with startup fees as well as cancellation fees for early termination. And while some Texas electricity providers advertise a $10 cancellation fee, the fine print may read that it’s really $10 per month left on the contract.

Some additional things to consider when comparing contract lengths include:

• Early-termination fees
• Cancellation fee
• Enrollment or sign-up fees generally reserved for shorter terms
• New-customer or introductory rates that will increase part way through your contract

Unfortunately there are a lot of sketchy energy companies out there just trying to get your money. To get connected with an energy provider we trust, use this tool or click one of the links below to compare prices and find the right plan for you.

Electricity Facts Label

When shopping for energy providers in Texas, always check their Electricity Facts Label (EFL). Similar to a nutrition label you see on your favorite snacks, an EFL will give you all of the information about a company’s electricity prices, contract lengths and terms, sources of generation, and emission levels.⁷ Here’s an example of what to expect on an EFL:

Watchouts

One of the most crucial things to be aware of when choosing an energy plan is your rate type. Variable rates can save you money, but they can also end up costing much more over time if the market rates spike. Make sure you understand the risks before choosing a variable rate plan. You should also check for unusually high early cancellation fees if you back out of your contract before the agreed upon term is up. A small fee under $75 is standard, but look out for higher charges.

Unfortunately, there are also scams to be on the lookout for. One popular scam occurs when someone claiming to represent your power company calls and demands immediate payment and threatens to shut off your power. Never provide payment information over the phone. Another common scam occurs when someone claiming to be a company rep knocks on your door and asks for payment or your social security number to secure lower payments or purchase energy-saving equipment.

Understanding Deregulated Energy in Texas

A deregulated energy market simply means that the companies that market and sell electricity plans compete with one another for your business. The power producers and distribution companies are still regulated, but the Retail Electricity Providers (REPs) are not. Texas deregulated its electricity market in 1999, giving most Texas homeowners the opportunity to shop around for a plan that works for them.

What’s the Difference Between Utility Companies and Electricity Provider Companies in Texas?

Retail Electricity Providers (REPs) purchase electricity on the wholesale market and sell it to customers at varying rates. While you can choose your own REP, you don’t have a choice of utility company (called a TDU in Texas). Your TDU will automatically be assigned to you based on where you live.

Unlike REPs, TDUs handle the transmission of electricity. In other words, utilities are responsible for delivering electricity to your home, despite your choice of REP. TDUs are also responsible for the reliability of your electricity. Your choice of REP will not affect the frequency of power outages that you may experience.

There are technically five TDUs in Texas: Oncor, Centerpoint, AEP Texas North, AEP Texas Central and Texas New Mexico Power (TNMP). The majority of Texans are served by Oncor, followed by AEP and CenterPoint. TNMP serves roughly 260,000 customers in the western part of the state.⁸

Keep in mind that your utility will impact your electricity rates, but not as much as your REP. Each TDU has its own costs for delivering electricity, meter readings, wiring and more. You’ll pay these charges no matter which Texas energy plan or provider you choose, and they’ll be baked into the monthly bill from your REP. All TDU rates are regulated by the Public Utility Commission of Texas (PUCT).

Texas Electricity Rate Trends

*This information comes from the U.S. Energy Information Administration

As you can see based on the data above, the average retail electricity rate in Texas was reasonably steady from 2014 through 2020. It’s possible that COVID caused an increase in the price for electricity, as 2020 to 2021 brought nearly a 12% increase in the cost. Between 2014 and 2024, the price has increased by over 37%. The EIA notes that the cost of fossil fuels increased between 2021 and 2022, which was a big reason for the nationwide price increase. The unexpected deep freeze Texas saw in 2021 also drove up average electricity prices.

Switching Electric Providers in Texas

If you’ve been living in Texas but you’re unhappy with your electricity provider, you probably don’t need us to tell you why they haven’t been living up to your energy needs (or wants).

Still, before choosing a new Texas electricity company, we recommend considering the following:

• Percentage of renewable energy: Consider switching to a provider who is striving to make a more positive environmental impact. The bad news is that not every energy company that offers “green plans” is using 100% renewable energy. The good news is that each company is required to have an EFL for each plan that states how much of their energy is sourced from renewables (the state standard is at least 25%).
• Electricity rates — read the fine print: Compare providers to see who’s offering the best value plan. Notice: we don’t say the cheapest price. If one company is offering a lower rate but it’s a new customer deal and it only lasts for the first three months of a 36-month contract, it may not be the best price over time. Be sure you fully understand the terms and conditions before you sign.
• Types of plans offered: A lot of Texans on variable-rate plans were shocked to see their electricity bills skyrocket during the winter storm of February 2021. If you were one of the victims of an insanely high utility bill, you may consider switching to a fixed-rate plan.

Choosing an Electricity Plan when Moving to Texas

You’re new to Texas, so you may not be as familiar with the idea of deregulation. Maybe you’re moving from a state where deregulated energy isn’t an option. It can be tempting to pick the provider with the lowest rates, but if you’re moving from a different state (especially one with a different climate) you may not know how your energy usage is going to be in your new home.

As a new Texas resident, we encourage you to consider the following:

• Customer reviews: Hearing first-hand accounts of what it’s like to work with this electricity provider will tell you a lot about how your experience will go. Keep in mind that people don’t exactly love paying for electricity, so you won’t find a perfect rating with any company. But still, you should sift through customer reviews online to see what people in your area are saying about their experience with this company. Better yet, ask your neighbors!

• Company history: There are more than 150 REPs in Texas. If a company has been able to stick around for decades despite all the competition, it likely means they have a lot of happy customers who wouldn’t ever look to switch energy providers.

• Percentage of renewable energy: You’re reading EcoWatch, so we assume you care deeply about your environmental impact. Be wary that not every energy company that claims to offer “green plans” is actually offering a renewable energy plan. Fortunately, each Texas energy company has an EFL that clearly outlines how much of their energy is sourced from renewables. The state standard is at least 25%.

How to Switch Electricity Plans in Texas

Switching electricity plans in Texas is very simple and takes just a few minutes of your time. Since all of the providers in Texas deliver energy from the same producers, switching plans is all done digitally. Your service won’t be affected, and the only thing that will change is your rate.

Before you get started, you should check to see if you’re enrolled in a contract, as you might need to pay a cancellation fee to get out of it. Most plans switch to a month-to-month option after the contract expires, though, so chances are good that you’ll be able to make the switch without a fee.

Just follow the steps below to find the best provider and electricity rate for you:

1. Scroll to the top of this page and enter your zip code.
2. Choose whether you’re switching providers or if you just moved to Texas and need new service. If you’re getting new service, then you don’t need to worry about paying a cancellation fee for your current provider. If you’re currently enrolled in a contract with a different provider, you should contact them or check your contract for information on cancellation fees.
   Some providers don’t charge an early cancellation fee, and others charge $200 or more. In the next step, if you choose to have a live advisor help you, they can do the necessary research for you and potentially even help you reduce the cancellation fee.
3. You have three options to choose from. Advisor Plus+ is a paid service, but a live representative will help you choose the best plan for your needs. This is beneficial, as the cheapest plan isn’t always the best. The advisor will consider fixed and variable-rate plans, go over when you tend to use electricity to get the best time-of-use rates, check your bill to see how much electricity you use per month to secure the best prices and more.
   EnergyBot Advisor is a free service, and a plan is chosen for you based on criteria that you enter. This option delivers a less customized selection, but it should still meet the needs of most customers.
   Standard View is also a free service, but it requires the most work on your part, as you’ll need to look at the plan options and choose one manually. You’ll see the contract term, rate, discounts, renewable energy percentage and more for each plan available in your area.
4. If you chose one of the first two options in the previous step, you’ll get on-screen prompts to help you make the switch from your current provider to the new one selected for you. If you chose the Standard View prompt, you’ll get a list of providers with plan rates and terms, and you can simply click on Select Plan to move forward.
5. Finally, you’ll be prompted with a button that will take you to the provider’s site. You’ll also be told what plan to look for once you’re there to sign up and lock in your new rate.

Best Electric Companies in Texas

The EcoWatch Reviews team narrowed down the top clean-energy providers in the state. Start connecting with suppliers by using this tool or by clicking the links below to compare prices and find the right plan for you.