Learning Center

If you’re reading this, your electricity provider in Texas likely went out of business and you are now with another provider known as a Provider of Last Resort or POLR.

Here is what you need to know to make an informed energy decision for your household.

POLR transitions usually default to variable market rates, also called holdover rates.

Your Provider of Last Resort could honor the rate you were previously paying with your former electric company. Check the details of your new contract to find out.

In most cases, you are paying the Provider of Last Resort an expensive holdover rate.

Holdover rates are subject to changes in market conditions and are significantly higher than those for a fixed-rate contract.

Switch providers today right here on ComparePower to a fixed-rate plan that will be easier to budget and cheaper than a holdover rate.

Get a fixed-rate contract with a low rate in minutes.

What is a Provider of Last Resort, or POLR?

POLR service, or Provider of Last Resort, serves as a safety net for you when your preferred retail electric provider (REP) is unable to maintain service. 

Instead of utilities providing backup electric service to customers, the POLR structure requires competitive REPs to fill the service gap if any REP exits the market.

This service is intended to be temporary and should be used only in exceptional circumstances, such as when a REP goes out of business.

The Public Utility Commission of Texas (PUC) appoints certified REPs to provide POLR service in each service region every two years.

POLR must be served by the large service providers (LSPs), and smaller providers may volunteer to participate.

Find a low rate and switch energy providers instantly.

What are my options if my electric provider goes out of business?

Getting dumped to POLR is not ideal. There’s no getting around that, but you now have the opportunity to find a great new rate for your home.

You do not have to stay with your provider of last resort. You can choose your provider on ComparePower.

In as little as five minutes, you can compare all of your electricity options to find the right plan for your home.

We’ll show you all-inclusive pricing, so you know exactly what your bills will look like.

Shop with your usage to find plans that match your needs and avoid all the gimmicks that providers throw at you.

Will my power go out?

There is no interruption of power during a POLR transition. If you are in good standing, which means you’ve paid your electricity bills on time, then your utility company will continue to deliver power to your home.

When do you get POLR electric service?

Retail energy is a high-risk commodity business and REPs have to purchase electricity ahead of time to support your needs.

If a REP has not purchased enough electricity to serve their customers, they are forced to purchase real-time electricity to meet their customer’s needs.

And if the Electricity Reliability Council of Texas (ERCOT) views the upcoming market prices as risky, they may demand more collateral from your REP to cover the costs.

If your REP isn’t able to cover the costs of real-time electricity or put up enough collateral, they can quickly go out of business and you’ll be placed on a POLR plan.

This is exactly what happened after Winter Storm Uri when demand skyrocketed and real-time electricity prices hit all-time highs.

Who is your Provider of Last Resort?

The PUCT determines the Texas POLR list, which is updated every two years.

The largest providers are required to serve as a POLR and smaller providers may choose to take part in order to share the burden.

Current POLR providers are listed below, by delivery area:

– Oncor: TXU Energy
– Centerpoint: Reliant Energy
– TNMP: TXU Energy
– AEP: TXU Energy

How does POLR electric service work?

If you end up on a POLR plan, first off, don’t worry. The POLR system was put in place to make sure that your lights stay on so you won’t be stuck in the dark.

The first thing that will happen is that you’ll be notified that your electricity service has been transferred to a POLR.

You’ll receive a notice from the PUCT letting you know that your REP is no longer servicing your home, and soon your POLR will send information about the plan you are being placed on.

Your contract with your former REP will be terminated and your contract details will likely not be carried over.

Any payment or billing arrangements you had on your old electricity plans, such as average billing or Auto Pay, are also terminated.

The new POLR plan you are placed on will be month-to-month with no contract and will have a variable rate.

This means that the cost of your electricity will change each month and can be extremely expensive.

If you are hearing warning bells going off, you are right to assume that you don’t want to stay on a POLR plan for long.

The good news is that you have the opportunity to shop for a new electricity plan without any penalties.

When you’re transferred to a POLR you have 15 days to switch to another plan with that POLR or you can shop to find the best rate for your home.

Don’t wait. Switch providers here today in as little as 5 minutes and enjoy real savings on your energy bill month after month.

Search for a low electricity rate and enroll online in minutes.

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Any product or company names, marks, or logos shown on this page are the property of their respective owners. ComparePower is an unaffiliated, independent marketplace.

Set up Electricity for Your Apartment

Moving into an apartment requires an electricity account number to get your keys.

You shopped around, toured dozens of apartments, and finally found the perfect space.

You’re packed and ready to start your move, but you can’t get the keys to your new apartment until you give your leasing office an electricity account number.

If you’ve found yourself in this situation, first off, good news. Your apartment is in an area of Texas that has deregulated electricity.

You have the power to choose your electricity plan, which gives you the chance to find the best plan for your new home.

The downside is that finding the right plan can be difficult, and electricity companies will do everything they can to make as much money off of you as possible.

The market is flooded with gimmicky prices and plans that seem like a good deal on the surface, only to have hidden fees and confusing pricing structures lurking.

These companies even offer “special” deals to apartment communities, hoping you’ll sign up for one of their plans without checking the details.

These plans sucker you into an expensive rate with a pricing structure that doesn’t work for you and your apartment’s usage profile.

We’re here to help Texans beat electricity companies at their own game and find the right plan for their apartment.

Millions of Texans have already used ComparePower to find the right plans for their apartments. You can read what they say about us here.

We’ll help you avoid the most common traps, get an electricity account number, and get your keys in as little as 10 minutes.

Help Me Choose

Find the best plan for your apartment in minutes. Answer five questions about your apartment home and energy habits and find the right energy plan instantly.

Let us guide you to your best energy plan for your apartment.

Any product or company names, marks, or logos shown on this page are the property of their respective owners. ComparePower is an unaffiliated, independent marketplace.

How to get an electricity account number 

Learn how to set up electricity and get proof of service for your leasing office or landlord in minutes.

Total Time: 10 minutes

  1. Visit ComparePower.com

    Visit ComparePower.com for official electric rates from trusted Texas energy providers.

  2. Enter your zip code

    Enter your zip code to find energy plans and rates in your area.

  3. Compare plans & rates

    Compare energy plans and electricity rates by filtering the search results or features you want.

  4. Enroll online in 5 minutes

    Checkout and enroll online in one place.

  5. Have proof of service for your leasing office or landlord

    Get your keys and move into your apartment home stress-free.

Supply:

  • Your Apartment Address
  • Your Social Security Number
  • Drivers License Number

Tools:

  • ComparePower.com is all you need to get an electricity account number and the keys to your new apartment.

Materials: Computer or mobile device with internet access.

Apartment electricity costs

Factors such as the size of your apartment, weather, construction, heating and cooling equipment, insulation, and family living habits will affect your actual usage.

We’ll use Texas’s average electricity price of 12.56 cents per kilowatt-hour (kWh) and 1,000 kWh per month as the average usage in Texas.

These averages take into account apartments, homes, and commercial properties.

Most apartments use somewhere in the ballpark of 500 kWh of electricity each month. Using the average price of electricity, that would put an apartment bill at around $65 a month.

Not sure what your usage will be? Estimate your usage using this tool.

Let’s quickly find your best energy plan.

1. Size of home:

2. Number of residents:

3. Your energy habits:

Approximate average monthly usage: 690 kWh

Disclaimer: This tool is for approximation purposes only. Accuracy is not guaranteed or implied.

The approximated monthly usage is based on an average over 12 months. Air conditioning and heating costs can vary and often account for up to 50 percent of your home’s energy use during different seasons.

Factors such as size of your home, weather, construction, heating and cooling equipment type, insulation, and family living habits will influence your actual usage.

Other considerations

If you haven’t settled on an apartment yet, you might want to consider looking for an apartment on the first floor of the building.

First-floor apartments tend to maintain temperatures better than those on higher floors. This means it will stay cooler in the summer and warmer in the winter.

Heating and cooling significantly impact your electricity usage each month and finding an apartment that regulates the temperature can save you hundreds of dollars each year.

You can also look for apartments with energy-efficient appliances already installed. These appliances are designed to avoid excessive electricity usage and won’t use electricity while they are not in use.

New to Texas? 

Texans voted in 2002 to de-regulate the electricity market, allowing you to choose your electricity plan. The goal of deregulation was to lower electricity prices and create better choices for consumers.

The downside of deregulation is that the market is flooded with complex and confusing plans without straightforward pricing.

Same-day Power

If you need power today, you can schedule a same-day connection until 6 pm with TXU Energy or Payless Power and before 2 pm with all providers in our marketplace.

Place an order before 2 pm, and service can be scheduled to start today during checkout.

Learn how to get same-day service.

Texas Electricity Companies

There are over 60 energy providers in Texas that can supply you with electricity.

The following are some of the top energy providers in the state.

Energy CompaniesPhone Number
4Change Energy855-550-6663
Amigo Energy866-526-7192
Direct Energy855-307-6915
Discount Power855-236-1309
Reliant855-887-2194
Tara Energy866-217-5179
Frontier Utilities866-763-5084
Constellation855-798-2889
Gexa Energy855-639-8210
TXU Energy844-359-7999
Payless Power855-854-8482
Pulse Power888-853-4522
New Power866-448-2720
Just Energy866-586-3564

Apartment Electricity FAQs

What uses the most electricity in an apartment?

Air conditioning and heating costs can vary and often account for up to 50 percent of your home’s energy use during different seasons.

How long does it take to get the electricity turned on?

Most providers offer same-day service if you submit a request before 2 pm. A few providers can even get your lights on as late as 6 pm on weekdays.


ComparePower Texas

Very helpful, Compare Power makes switching providers stress-free.
“I plugged in my kWh usage from this past year & I could’ve been saving tons of money if I would have utilized this site & switched sooner!”
Ashley (TX, United States)
Moving to a new city is stressful, but shopping for an electric company was not!
Moving to a new city is stressful, but shopping for an electric company was not! It took less than 5 minutes to enter my info, compare quotes, and start service. I really like that you could search for renewable energy sources of electricity; it was my first time realizing that green energy was an option in my new area, and I feel good about opting for renewable rather than coal-generated electricity.
Sonia Y. (TX, United States)
I used to use Power To Choose…
“I used to use Power To Choose but this website is so much more user-friendly because it does all the energy calculations for me based on my usage history to find the best plan for our home!”
Natalie W. (TX, United States)
Super quick…
“Super quick and far better pricing than what I was paying! Thanks yall : )”
Doug D. (TX, United States)
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Any product or company names, marks, or logos shown on this page are the property of their respective owners. ComparePower is an unaffiliated, independent marketplace.

After finding a plan that meets your needs and before committing to that plan, you notice that there are multiple contract lengths available and that each shows different rates.

Is a short-term or long-term contract the better option? Which will save you more money?

It depends. There are no one-size-fits-all contracts that will work for everyone.

If you are planning on staying in your current home or apartment for the foreseeable future, we recommend that you pick a long-term contract of at least a year in length.

These contracts will range from 12 to 36 months, and you’ll get a great balance of low rates and stable pricing.

You’re not sure how long you plan to be in your current space?

The right contract length for you is a little bit more complicated. Short-term contracts could be a good option if you only need temporary power.

You’ll keep the flexibility to switch things up every couple of months, but there’s no guarantee that prices will be lower or even the same when renewing your contract.

In Texas, prices have trended up over the last several years and are predicted to do the same in the future.

A long-term contract can lock in the rates you see today for long-term savings.

If prices drop in the future, a short-term contract lets you take advantage of low prices and maximize your savings.

Regardless of your situation, ComparePower has short-term and long-term contracts to get your home or apartment powered on today.

Instantly find your best Texas electricity rate.

Short-term electricity contracts

Short-term contracts are less than a year in length. The most common length of time you’ll see offered by retail electric providers (REPs) is six months, although REPs will offer a three-month contract occasionally.

Plans with a short-term contract can be a great deal depending on the time of the year, but you can get stuck with a high rate if you start during times of peak energy demand.

Compare energy plans and rates in Texas.

What are the advantages of short-term electricity contracts?

The best part about short-term contracts is that they maximize your flexibility. You’ll never find yourself stuck in a contract for more than a few months at a time, so if electricity rates change, you can switch things up for a better contract.

If you can time your contract start and end dates correctly, you can enter a short-term contract when demand is low and get a good rate.

You get the most opportunity to shop for electricity throughout the year without worrying about any early termination fees.

What are the risks of short-term electricity contracts?

While short-term contracts offer excellent opportunities to find cheap electricity, you can quickly find yourself in hot water if you forget to shop at the end of your contract term.

Since you have to shop more frequently, you run a higher risk of falling into a monthly variable rate after your contract that can easily be double to triple what you had previously been paying.

At the same time, there is no guarantee that electricity rates will be cheaper or even the same price when you have to sign up for a new contract.

Electricity rates can change for various reasons, and a freak storm, like winter storm Uri in February of 2021, can send rates through the roof.

You could quickly find yourself stuck signing an electricity contract at a more expensive rate that you’ll be stuck paying for the next few months.

And if you are living on a fixed income or a strict budget, short-term contracts make it much harder to plan for future months. You never know what electricity rates will look like, so you can’t depend on your electricity bill to stay the same.

Find the best electricity plans and rates for your home or business.

Long-term electricity contracts

A long-term contract can last anywhere from one to five years, and the most common lengths you’ll see are 12, 24, and 36-month contracts.

With a long-term contract, you lock in your electricity rate without worrying about future changes, but you also make a bigger commitment than with a short-term contract.

What are the advantages of long-term electricity contracts?

With a long-term contract, you get to lock in that great rate you found over a longer period of time. This gives you a relatively stable electricity bill throughout your contract, depending on your usage.

You won’t have to worry about rates changing or even think about shopping for another plan until at least 11 months in the future.

And if you find a great rate, you get to lock in those savings for an extended time.
Long-term contracts also make it easier to budget for electricity throughout the year since your rate won’t change. If you want to take it a step further, some REPs also offer average billing that can help smooth out your electricity bills.

While electricity shopping isn’t particularly hard or time-consuming, a long-term contract lets you relax throughout the year without shopping around. You don’t have to compare prices each month and worry about any price hikes in the future.

Time is money, save both.

What are the downsides to long-term electricity contracts?

While locking in a great rate for electricity throughout the year can save you tons of money, you could find that rates take a dive if demand isn’t up to providers’ expectations.

You might be missing out on some savings during these times because you are locked into your contract.

If you are looking to maximize your savings, a long-term contract will prevent you from switching to a cheaper plan.

Most long-term contracts will have an early termination fee that can make breaking your contract costly.

If you decide to get out of a long-term contract, make sure you do a cost analysis and factor in the early termination fee.

You might be able to save enough money by switching plans to justify the cost of a few hundred dollars upfront.

Is a short or long-term contract better for you?

The short answer is that it depends. Unfortunately, there is no straightforward answer to tell you which will work best for you.

You’ll want to take a good hard look at what you want from your electricity plan before deciding on what type of contract you want to sign.

Most energy consumers in Texas and on ComparePower choose 12-month fixed-rate electricity plans.

Compare Texas electricity rates.

Choose a long-term rate and lock in your contract for the foreseeable future. This is a great option for someone who has a long history of electricity usage and plans to stay in their home.

If you are on the other side of the coin and don’t mind shopping frequently, a short-term contract could be a good play for you.

You’ll be able to shop for electricity every couple of months and can maximize your savings by finding the cheapest rates when you shop.

Just remember that electricity prices usually go up, so there is no guarantee that you’ll be able to find a cheaper rate in the future.

Another common situation we hear is someone moving into an apartment for the first time. If this is you, you probably don’t have any electricity usage history to shop with.

Finding a perfect plan for your apartment can be difficult without any historical usage. A short-term contract could be a good option until you establish some usage history.

If you ask us, your best bet is to pick a 12-month contract that doesn’t have any bill or usage credits. This type of contract will give you the best balance between a great electricity rate and the stability of a long-term contract.

You’ll get a good idea of your usage throughout the year and can pick a plan with a longer contract in the future that fits your unique usage profile.

Not sure how long you’ll be in your home or apartment? Don’t worry about signing a long-term contract if it is the best rate for you.

Texas law protects all movers from early termination fees, so you can sign up for that cheap 12-month contract without worrying about moving.

If you don’t want to commit to an electricity contract, you can look at pre-paid and month-to-month options.

These plans let you avoid signing a contract, but you’ll likely be looking at higher rates or some form of upfront deposit.

Ready to do your part for the environment? Many providers have plans that range from 6% to 100% renewable energy to help offset your carbon footprint.

Instantly compare the best Texas electricity companies, plans, & rates.

Contract Length FAQs

What time of year is electricity the cheapest?

Electricity prices in Texas fluctuate throughout the year depending on demand. Summer and winter see the highest electricity demand as people heat and cool their homes. Conversely, spring and fall are usually when electricity rates are the lowest.

How long are energy contracts?

Energy contracts range in length from three months up to 36 months. The most common term lengths are 6, 12, 24, and 36 months.

Do I need to match my contract length to my lease?

There is no need to match your contract length to your lease. Instead, we recommend picking the contract length that gives you the best rate for your unique electricity usage.


ComparePower Texas

Very helpful, Compare Power makes switching providers stress-free.
“I plugged in my kWh usage from this past year & I could’ve been saving tons of money if I would have utilized this site & switched sooner!”
Ashley (TX, United States)
Moving to a new city is stressful, but shopping for an electric company was not!
Moving to a new city is stressful, but shopping for an electric company was not! It took less than 5 minutes to enter my info, compare quotes, and start service. I really like that you could search for renewable energy sources of electricity; it was my first time realizing that green energy was an option in my new area, and I feel good about opting for renewable rather than coal-generated electricity.
Sonia Y. (TX, United States)
I used to use Power To Choose…
“I used to use Power To Choose but this website is so much more user-friendly because it does all the energy calculations for me based on my usage history to find the best plan for our home!”
Natalie W. (TX, United States)
Super quick…
“Super quick and far better pricing than what I was paying! Thanks yall : )”
Doug D. (TX, United States)
Compare Power Reviews

Any product or company names, marks, or logos shown on this page are the property of their respective owners. ComparePower is an unaffiliated, independent marketplace.

What is Smart Meter Texas?

Smart Meter Texas (SMT) is a database that stores daily, monthly, and 15-minute interval energy data recorded by digital electric meters (commonly referred to as “smart meters”).

SMT gives you quick access to your electricity use, electricity meter, and premise information and allows you to share that information with providers or any other authorized party.

AEP Texas Inc., CenterPoint Energy Houston Electric, LLC, Oncor Electric Delivery Company LLC, and Texas-New Mexico Power Company jointly own and manage SMT.

SMT is also endorsed by the Public Utility Commission of Texas (PUCT).

SMT is a great tool to help you manage your electricity usage, lower your monthly electric bill, and compare your energy options to find the right plan for your home.

Why should you use Smart Meter Texas?

Reading your meter might seem like a daunting task, but SMT takes all the guesswork out of learning about your electricity usage.

Once you have created an account, you can easily view your usage throughout the day, week, or month to get a good idea of when you are using the most electricity.

This makes it easy to make a plan and cut back on your electricity usage to save money on your bill.

With a handle on your usage, you can also shop for electricity plans in the most accurate way possible right here on ComparePower.

Simply take your monthly usage numbers from SMT, and enter them into our TAB tool. You’ll see exactly what your bill will look like on any plan so you know what will save you the most money.

How to view your usage with Smart Meter Texas

Smart meter texas

With timely access to energy data, SMT enables customers to better manage their energy consumption to lower their monthly electric bills, and take advantage of new products and services offered by Retail Electric Providers and Competitive Service Providers.

Total Time: 5 minutes

  1. Find your latest electric bill

    Find your latest electricity bill or download a copy from your provider’s online account dashboard.

  2. Enter the PUCT Certificate Number for your REP

    You can find the PUCT Certificate number on your electricity bill.

  3. Enter the ESID number

    You can find the ESID number on your electricity bill.

  4. Enter the electric meter number

    You can find your meter number on your electricity bill.

  5. View Usage

    View 15-minute, daily, and monthly readings to get a handle on your electricity usage.

Supply:

  • Internet access

Tools:

  • A desktop, laptop tablet, or mobile device.

Materials: Your electricity bill.

Start saving on your Texas electricity bill.

When should you use Smart Meter Texas?

Use Smart Meter Texas to figure out when you used the most electricity throughout that billing cycle. 
Find the times when your usage peaked, and make a plan to cut back on electricity usage during those times to save money.

Ready to switch from your current provider? SMT has your monthly usage history so you can compare plans apples to apples.

Drop that usage right into our TAB tool and figure out which plans match your usage right here on ComparePower.com

All-inclusive pricing shows you exactly what your bill will look like with your usage. The savings will shock you.

Learn how to shop with your home’s electricity usage in Texas.

Who should use Smart Meter Texas?

SMT is a great service for anyone looking to get a handle on their electricity usage. You can quickly view your usage throughout the day and get a clear picture of which months will have the highest electricity bill.

If you’re shopping for electricity, create an account on SMT today. With your monthly usage history, you can get the most accurate prices right here on ComparePower.

We’ll show you all-inclusive pricing based on your exact usage history so you’ll know exactly what your bill will look like.

Shop with confidence that you are getting the best plan for your home in only a few minutes.


Compare Power Reviews

Any product or company names, marks, or logos shown on this page are the property of their respective owners. ComparePower is an unaffiliated, independent marketplace.

Your electricity meter gives you the most accurate information on your energy usage, and you can use it to calculate exactly how much energy you are using by day, month, and even year. 

For savvy energy savers, your energy meter will tell you when you are using more electricity and you might want to reign things in. 

If you find that you are using more energy than the average Texan, there are several steps to help conserve energy, and ComparePower can help you find a plan that fits your exact energy usage if you want to make a change. 

What is an electricity meter?

An electric meter is a device that measures your electricity usage. It is usually located where electricity enters your home through power lines, and you can read your usage to help lower your electricity bill.

All meters work similarly to the mileage on your car and record the total amount of power your residence or business has used since the meter was installed.  

Why should you learn to read your electric meter?

Your electric meter might seem like a foreign object on the side of your home or your apartment, but modern smart meters make it easy to understand your energy usage. 

With these meters, you can quickly get a real-time readout of your electricity usage, calculate your yearly averages, and find easy ways to conserve energy and save money. 

Looking for an easy way to keep track of your energy usage in Texas? Check out Smart Meter Texas.

Types of electric meters 

There are two main types of electric meters that you will find in Texas. 

The majority of meters have now been converted to what is called Advanced Metering Systems (AMS) or smart meters. 

These types of meters send a digital reading to your electricity provider which eliminates the need for someone to go out and read your meter.

They generally record your electricity usage every 15 minutes instead of once a month as older mechanical meters did. 

This gives you close to real-time readings on your usage that you can use to accurately assess how to save on your electricity bill. 

Some meters can even connect to an in-home display so that you can view your usage without leaving the comfort of your home.

In comparison, the old mechanical meters use a spinning disc to measure your usage, which is recorded on rotating needles or dials. 

The biggest advantage of smart meters is that you and your electricity provider have quick access to your usage, and your provider instantly knows if you have a power outage. 

How to read your electric meter 

Reading your meter is a relatively straightforward process, but some could have a few screens you’ll need to scroll through. 

Total Time: 5 minutes

Wake up the display

If the display on your meter isn’t on all the time, you may need to press the button to wake it up.

Read your usage

Once the screen is on, you’ll see a series of numbers that correspond to your energy usage. Keep in mind that the number you see is the total usage since the meter was first installed, so you’ll need to subtract the last reading total to find your current usage. 

If you have an older analog meter, the process is a little more complicated. Each of the dials spins in the opposite direction and should display numbers zero through nine. 

You’ll read the numbers from left to right, and if the arrow is between two numbers, make sure to use the lower number. 

Supply:

  • Electricity Meter

Tools:

  • None

Materials: None

Average electricity meter usage and costs in Texas

Last updated: August 2022

The average Texas residential electricity rate is 12.8 cents/kWh, 11.5% less than the U.S. average. 
The average Texas business, commercial electricity rate is 8.51 cents/kWh, 27% less than the U.S. average. 

average retail price of electricity in Texas

Texas Energy

Texas electricity rates at a glance:

  • The average retail price of electricity is 12.8 cents/kWh
  • The average energy usage in Texas is 1,132 kWh/month
  • The average electricity bill in Texas is $144.90

Source: eia.gov

Easy, simple, best rates, just a click away.”

~ Stephen H. (TX, United States)

Last updated: August 2022

Got me the cheapest electric. Nice.

Emily (TX, United States)

Using your electricity meter to lower electricity costs 

If you are like most people and want to save money, taking a deeper look at your electricity usage can save you hundreds of dollars each year. 

Paying attention to your own spikes in energy usage can help you find times where you might want to reign things in. 

Keeping that in mind, seasonal weather changes are one of the biggest factors in electricity usage for Texans. 

As the summer heats up, electricity usage can double, if not triple, for some households. 

Taking steps like sealing any air leaks in your house or apartment can help keep your cold air conditioning inside for longer. 

If you live in an older home, you may even consider replacing your weather sealing and insulation to help your home regulate the heat. 

If it’s your first year in Texas or you’ve had the same plan for a while, you might want to dig into the details of your plan to see if your usage matches the prices you are paying. 

Different types of plans can save you money thanks to things like bill credits if you find yourself using more energy than you used to. 

Here at ComparePower, we recommend you take a look at your energy usage at least once a year and make sure your electricity plan still works for you. 

Better yet, you can shop and compare electricity plans with your home’s annual usage profile to find an affordable electricity rate for your Texas home.


Compare Power Reviews

Any product or company names, marks, or logos shown on this page are the property of their respective owners. ComparePower is an unaffiliated, independent marketplace.

What is average billing?

Average billing lets you pay a fixed amount every month instead of paying more during high-usage months and less during low-usage months making budgeting for electricity more predictable.

Have you ever found yourself in the middle of a Texas summer, the sun beating down on your home, wondering what your next electricity bill is going to look like? 

Texas weather is notorious for extreme weather throughout the year with little to no predictability. The only guarantee you have is that summer will probably be hot and winter can get cold. 

These changes in the weather can have a major impact on your electricity usage, and if you have ever wondered if you could even out your electricity bills, then average billing might be right for you. 

Average billing, also known as budget or balanced billing, uses your electricity usage throughout the year to calculate an average bill each month. 

Your bill remains relatively flat throughout the year, and you will have a much better idea of what your electricity bill will look like. 

This makes it easier to plan for your electricity bill, and you won’t have to worry about a hot week in the middle of March wrecking your budget. 

The important thing to remember is that average billing just offsets your bill each month based on your average usage. One way or another, you end up paying for your actual usage throughout the year. 

Instantly find the best energy plans in Texas.

How does average billing work?

The idea of average billing is that it should get you close to having the same electricity bill at the end of each month. 

Ideally, you’ll end up with predictable bills throughout the year so that you can easily budget for electricity. 

Retail electricity providers (REPs) use a simple formula to calculate what your average bill will be each month. 

They add up your past 12 months of electricity usage and then divide that number by 12 to get your average monthly electricity usage in kilowatt-hours (kWh). 

Once they have that number, it is multiplied by your current electricity rate to determine what your average monthly bill should look like. 

If you average 1,500 kWh of usage each month and your rate is 10 cents per kWh, your average bill each month would be $150 throughout the year. 

Each month your REP also looks at your bill to compare your actual usage with what you were billed for.

If you use more or less energy than your average, you’ll have a deferred balance that keeps track of any differences. 

Most providers will add 1/12th of your deferred balance to your next month’s bill to avoid that deferred balance getting too big. 

At the end of your electricity contract, any remaining balance will be added or credited to your account by your provider. 

If you don’t have a full year of electricity usage history or don’t have any at all, the REP can also use any previous history from your service address to calculate your average. 

Unfortunately, the calculation will be based on someone else’s electricity usage habits and likely won’t be accurate for you, so just keep that in mind before signing up for average billing.

Does average billing save you money? 

Are you wondering if average billing is worth it?

The unfortunate side of average billing is that you don’t end up saving any money at all. Each month your electricity provider adjusts your bill to smooth out any spikes in usage. 

Say it’s March, and you get surprised with some great weather. The clouds blow away and you’re wearing shorts and t-shirts for a week straight, so you crank up the air conditioning. 

You enjoyed the sun, got a tan, and now you have extra electricity charges that you haven’t paid for. The difference between your average bill and your actual charges is set aside in a deferred balance. 

Your provider is happy to keep track of anything you owe them and make sure that you don’t underpay regardless of the difference. 

If you manage to use less electricity, you can end up with a negative balance or a credit on your account. When your contract ends, your provider will apply for any credit on your account to your last bill. 

At the end of the year, you’ve still paid for all of your electricity usage and haven’t saved a dime. 

Compare energy plans and find an affordable electricity rate instantly.

What are the benefits of average billing?

The main benefit of going with an average billing plan is that your bill will stay relatively consistent throughout the year. 

You might have a small increase here or there to cover a deferred balance, but you don’t have to worry about any crazy weather spikes that could double or triple your bill in a single month. 

This makes it so that you’ll have a good idea of what your electricity bill will look like each month and you can easily budget throughout the year. 

Stability is great, but you still need to pay attention to your payments each month to make sure you aren’t racking up a large deferred balance. 

What are the drawbacks of average billing?

In an ideal environment, your deferred balance at the end of your contract would be close to zero.

However, any variation in your energy usage adds up and you can get stuck with a big payment at the end of your contract if you aren’t careful. It also matters when you start an average billing agreement.  

If you haven’t had a full year to sort through any overpayments and underpayments, you’re more likely to have a deferred balance left over. 

While average billing helps to smooth out weather extremes, they still have an impact on your energy use and can build your deferred balance throughout the year. 

And if you don’t have a full year of electricity usage history, then your average bill is based on someone else’s behavior rather than your own, to begin with.

Average billing can also lead to laziness when it comes to energy conservation. It’s easy to leave lights on and not pay attention to your thermostat if it won’t affect your wallet at the end of the month. 

In a worst-case scenario, your electricity contract expires and you end up on an expensive month-to-month holdover rate. 
 
The difference between your average bill and actual usage cost will grow your deferred balance even faster and you could be stuck with a big debt to pay. 

Is average billing right for me? 

Average billing is a great option for someone looking for a stable electricity bill throughout the year and isn’t afraid of keeping an eye on it. 

If you have a good understanding of your usage and are stable in your home, it should be easy for you to keep an eye on your deferred balance to avoid surprises at the end of your contract. 

You’ll have an easier time planning out your monthly finances without worrying about what the weather is doing. 

Stable electric bills could also be great for someone on a fixed income. You’ll have more consistent bills and won’t have to guess when planning your finances. 

Considering a new pool or maybe an electric vehicle in the future? You’ll want to wait on average billing if you think your usage patterns are going to change. 

A big change in your usage can lead to underpayment on your bill and a big deferred balance. At the end of your contract, you could be stuck with a massive bill to settle anything you owe to your provider. 

How can I get average billing?

You can request average billing for electricity by contacting your electricity provider directly by phone. Most providers on ComparePower offer average billing.

Compare energy plans and find a low electricity rates in minutes.

Other considerations 

If you aren’t sold on switching to average billing you have a few other options that could help you out with budgeting. 

You could try creating your own average billing plan without going through your provider. Take a peek at your bills throughout the last year and figure out what your average payment was. 

Each month your bill is lower than your average, you can put that extra money into a savings account and use it to pay for any expensive months in the future. 

Your savings account might also pay you a small amount of interest on that money which is better than nothing coming from your provider. 

You can also look into plans that use bill credits. These give you a discount on your electricity bill when you use a certain amount of electricity each month. 

If you know that you will always hit that usage threshold, you could save yourself some money each month with one of these plans.

Furthermore, you can take advantage of bill credit plans by shopping with your home’s historical usage profile. Shopping with your home’s usage history lets you compare energy plans apples to apples.  

Learn how to switch electricity providers with your home’s historical usage.


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Moving to a new city is stressful, but shopping for an electric company was not! It took less than 5 minutes to enter my info, compare quotes, and start service. I really like that you could search for renewable energy sources of electricity; it was my first time realizing that green energy was an option in my new area, and I feel good about opting for renewable rather than coal-generated electricity.
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“I used to use Power To Choose but this website is so much more user-friendly because it does all the energy calculations for me based on my usage history to find the best plan for our home!”
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Electricity contracts: Know the facts before you sign

If you’re shopping for an electricity plan in Texas, it’s important to know how to read an electricity contract. 

When it comes to choosing the right energy plan for your household, there are a variety of options you can consider, including long-term, short-term, fixed-rate, and variable-rate contracts.

You are entering into a legal agreement. A contract is a legal agreement between you and your energy retailer. 

Look over the terms of service, electricity facts label, and customer rights page before you sign to make sure you are informed of all of the details. 

Understanding what is in your electricity contract can help you choose the best energy plan and help you avoid surprises on your electricity bill.

Compare electricity rates in your neighborhood.

Reading an Electricity Contract 

When shopping for electricity, you need to pay attention to three documents. Details matter, and nowhere is this more evident than with electricity in Texas. Be sure to carefully read each document before you sign your contract.

The Electricity Facts Label 

The first document you need to understand in your contract is the Electricity Facts Label (EFL), which is one of the most vital parts of your contract. 

Following complaints that it was difficult to compare electricity contracts apples to apples, the Public Utilities Commission of Texas mandated that all providers of retail electric service provide standardized information about their contracts via the Electricity Facts Label.

In the EFL you will find information on the charges for your electricity, including the cost per kilowatt-hour (kWh) and any extra fees associated with the production and distribution of electricity. 

Learn how to read your Electricity Facts Label.

Terms of Service 

Next, you will need to read and understand the Terms of Service (TOS).  

This is the legally binding part of your contract, and it is vital that you understand it before signing. 

It is similar to the terms and conditions you agree to when using other products and will give you information about the obligations both parties must fulfill. 

You’ll be notified a month before your contract expires and you can cancel or negotiate new terms any time within two weeks of your contract’s end date. 

Your Rights as Consumer 

Finally, you must know about “Your Rights as a Consumer” (YRAC). 

This document will detail the federal protections in place, like the supplier’s responsibility to not discriminate based on gender, race, and religion, as well as other rights you have.

This can include your right to privacy or the company’s obligation to notify you of certain changes and seek your consent when necessary.

Contract Expiration

Make sure your contract does not expire. Not doing anything is by far the most expensive option. 

You’re automatically put on a holdover rate when your contract expires, one that fluctuates based on market conditions, resulting in unexpectedly high electricity bills.

You might overpay for electricity if you let your contract expire without taking action.

Set a reminder here and we will notify you when it’s time to switch.

If you have an expired contract, it’s time to act. Comparing energy plans in Texas based on your usage history is the best way to save money.

Contract Renewal Cycle

Generally, you want to avoid contracts with short or odd-numbered terms, such as three or nine months, as these will expire when electricity demand is at its peak and prices are high for example right before or in the middle of summer in Texas.

These short-term plans may appear to be a good deal, but their purpose is to delay the end of your contract to a period that is less advantageous to you and more favorable to the electric provider long term.

Learn how electricity contract renewals work in Texas.

Compare electricity rates and save.

Shopping Considerations

Consider these additional factors when shopping for a new energy plan. 

Contract Length

The majority of electricity contracts last 6-12-24 months. 

If you are renting, the term of your electricity contract does not need to coincide with the term of your lease. 

You can cancel an energy contract in Texas if you move out, so you can select any term length that offers you the best price.

Going with a long-term contract is the best option if you plan on staying in the same place for a while and don’t want to change providers frequently.

Most Texas consumers find that 12-month plans offer the right balance between affordable rates and the hassle of switching providers often.

Short-term Contracts 

Short-term energy contracts last less than a year. Most providers offer six-month contracts, but a few offer three-month plans as well. 

Short-term contracts offer more flexibility if you don’t find shopping and switching providers burdensome.

You will have the opportunity to switch more frequently with a short-term energy plan, which can be an advantage if you like to shop the market for lower rates often. 

It might be a risky game, however. Plan prices in Texas tend to fluctuate with demand throughout the year. 

If you sign up for a short-term plan, you may find yourself renewing in a month that would be less ideal, such as in the middle of a hot Texas summer when prices are at their highest.

Unless you enjoy monitoring electricity rates often and understand how to shop we recommend going with a 12-month length plan. 

A full year between shopping tends to be a good balance between shopping for a new plan and minimizing the burden of having to shop for a new energy plan often. 

Long-term Contracts 

Long-term electricity contracts allow you to lock in an electricity rate for an extended period of time. They usually last anywhere from 12–36 months.

In a market where prices fluctuate, this gives you the ability to set your budget and avoid guessing what your bill might be each month. 

In addition, companies usually charge less the longer you commit.  

There will normally be a fee for canceling the contract, but if you move within the plan’s timeframe, there are consumer protections in place that may waive the early termination fee.

The drawback of a fixed-rate contract is that it keeps you locked in even when prices drop. 

Shop affordable Texas electricity rates.

Rate Type 

Most Texas consumers prefer a fixed-rate electricity plan over a variable-rate plan as they lead to more predictable power bills. 

Which is better: Fixed-rate or Variable-rate Electricity?

Fixed Rates

A fixed-rate plan keeps the same electricity rate throughout your contract period. This is a more traditional option and what many of our readers choose.  

Note that a fixed-rate energy plan does not mean your electric bill will always remain the same. You still pay for each kilowatt-hour that you use each month, which can change each month throughout the year.

The total amount of energy you use, the energy rate, and any additional fees charged by the utility will determine your monthly bill.

Variable Rates

On the other hand, a variable-rate plan will let you pay the market price for electricity. 

When rates drop, you see the savings. When rates go up, you pay the price.

If you are in a position where you can control your usage daily, this is a good option. 

You can use more electricity when prices are low and reduce usage during peak demand.

The decision is yours and you’re looking to find the best rates, regardless of the type of plan. 

The best electricity plan or rate is often determined by the price per kWh and your home’s kWh usage. 

Learn how to switch energy providers in Texas. 

Features

Some plans include features like 100% Green, Free Nights & Weekends, or a free Nest Thermostat. 

Deposits

Depending on your credit score and utility payment history, a deposit may be required. 

There might not be a deposit required from some ComparePower providers, so you can sign up for service right away. 

You may not have to pay a deposit if other providers do not require one. A single order gives you an overview of deposit requirements across providers. 

ComparePower can help you find a no-deposit plan quicker and more efficiently.

Go prepaid and avoid deposits and credit checks altogether?

Learn how to get no-deposit lights in Texas

Canceling an Electricity Contract

Cancellations are possible at any time, but there may be an early termination fee if you switch providers before your term is due. Be sure to read your contract and understand the cancellation rules.

In order to terminate an electricity contract before its expiration date and without paying an early termination fee, you must move out. 

An example of this scenario occurs when couples divorce, when family members go into the military, or when roommates move out.

With two or more people living in the same house, you can cancel your electricity contract and have someone else transfer it in their name to another electricity provider.

You can then have another household member place a move-in order through ComparePower for the same address with a new provider.  

Make sure that you select “move-in” at checkout.

Call your electric provider and ask them to cancel your service by a certain date because you are moving out. You can avoid service interruptions by doing this, and the bill will be removed from your name.

Depending on your provider, they may require proof, such as a forwarding address for your last bill, but you are not required to provide it.

Your home will be serviced by a new provider, and the electricity billing will no longer be in your name, but in the name of the other household member. 

In no way is this intended as a way to avoid paying your bills. Paying your electric bill on time will allow you to enjoy low rates without upfront deposits and remain in good standing with the electric company. 

Changing providers without paying your bill can hurt your credit and ultimately result in a higher rate or an upfront deposit.

Compare rates ad make an informed decision.

Electricity Contract FAQs

Will I lose power if my electricity contract expires?

No, you will not lose power if your electricity contract expires. Your current provider will continue to provide power to you, but at a high rate, called a holdover rate. 

Do not let your contract lapse. Inaction is by far the most costly and can lead to unpredictable electric bills. Shop with your home’s historical usage on ComparePower and find the right plan for your home in 10 minutes. Enroll online confident you got a great rate. 

Can I cancel an electricity contract?

In Texas, when switching providers, you can cancel an electricity contract without penalty within 3 days by contacting the provider directly by phone. 

Cancellations are possible at any time, but switching providers before the end of your contract may result in an early termination fee. In Texas, you have 14 days before the end of your contract to switch providers without penalty. Be sure to read your contract and understand the cancellation terms.

An electricity contract can also be canceled by moving out of your residence and ceasing service under your name entirely. You can easily cancel your electricity service when you move out by calling your electricity provider. Early termination fees do not apply when moving out. 


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ComparePower fixes the EFL

Do you feel befuddled when attempting to understand the differences between energy plans in Texas?

We did, too. That’s the reason we fixed the EFL. 

Like nutrition labels on foods, electricity fact labels provide information on prices and contract terms. 

There is just one big problem. The EFL only indicates the price you will pay for three very specific usage values of 500, 1000, and 2000 kilowatt-hours (kWh). 

If you’d like to know the price of electricity outside of those 3 usage points, you’re on your own.

Who uses exactly 500, 1000, or 2000 kWh each month? Looking back at my past bills, the monthly usage varies drastically with each season.

Many energy consumers in the state choose energy plans that seem like good deals based on the price advertised for three usage points that don’t even apply to them. 

There has never been a single month when I’ve used exactly 500, 1000, or 2000 kWh on my electric bill. And I bet you haven’t either.

Take a look at your electricity bill to see for yourself. While statistically possible, I would bet the majority of our readers on this site have never used exactly 500, 1000, or 2000 kWh on the dot every single month.

So then, how can you determine the real cost of electricity if you do not use exactly 500, 1000, or 2000 kWh?

Use ComparePower. Avoid hours of deciphering the EFL altogether. Our users can enter any usage value and see the prices for that exact usage on any of the plans in our marketplace.

Shopping directly on a single provider’s website you’ll have to decipher what you’ll pay for your home’s specific usage. Guessing at the right energy plan and hoping things work out.

Not here. Get a complete pricing profile for any electricity plan in our marketplace and for any usage value you choose.

No more guessing which plan is right based on three randomly chosen usage points. Know what you are buying before you buy it.

That is how ComparePower fixes the EFL. Here you can see the price for any usage and be confident that you made the right choice.

Compare energy plans according to your home’s specific usage, not three arbitrary points Texas electricity companies advertise.

The best energy plan for your Texas home is determined by comparing energy plans that match the historical usage profile of your home.

Enter your home’s past energy usage data and get an accurate estimate of what you’ll pay for an entire year of service, taking into account plan gimmicks such as bill credits and variations in monthly usage throughout the seasons.

This is how electricity shopping should be done. Clear and transparent.

Learn how to shop with your home’s usage history for real savings on your electric bill month after month.

Why is this so important? Check out this short 2-minute video to learn how ComparePower lets you find the best plan for you.

Find the real price you'll pay for electricity.

What is an Electricity Facts Label?

The Electricity Facts Label (EFL) is a legal disclosure mandated by the Public Utility Commission of Texas (PUCT) that must be included with all energy plans. 

The specifics of each plan will vary, but by reading an EFL, you can assess what you are getting from your energy provider.

To avoid surprises, the EFL intends to make the charges on your statement completely transparent, so you are never in the dark.

Your electricity provider can offer you a copy of each retailer’s electricity facts labels upon request.

The Electricity Facts Label allows you to compare facts in a consistent style and select a Retail Electric Provider based on your priorities.

Why should I use an EFL?

So, now that you’ve learned what an EFL is, why should you bother looking for one in the first place?

Every plan and supplier has a unique pricing structure, which can significantly alter the amount you spend for power each month. 

Dive into the EFL for each plan to find variances and price structures that may not be what you’re looking for.

At the same time, EFLs are there to protect you as a consumer from being surprised with a large charge at the end of the month.

The contract details for all plans are provided in the EFL to ensure transparency between you and the energy provider, so you know what kind of plan you’re getting. 

They also break down the various charges that can affect your monthly spending.

If you’re interested in renewable energy, EFLs can help you select plans that range from 5% renewable content to 100% renewable supplied energy while staying within your budget.

What exactly is an EFL?

An EFL is normally divided into three sections that outline the pricing structure for the plan, any disclosures made by the provider, and finally the provider’s contact information.

EFL - Electricity Facts Label
Sample Electricity Facts Label

Average Price per kWh: The first thing you’ll notice on an EFL is a chart showing the average price of electricity depending on the average monthly usage in kWh. 

It displays the average price per kWh charged if you use 500, 1000, or 2000 kWh per month.

Remember that this is only an example of what your payments may look like if you utilized those EXACT amounts of energy. 

The real expenses for each plan will vary depending on your monthly use.

Base Charge: The base charge is a cost that some companies will charge in addition to your monthly consumption. The energy provider will normally add a certain amount to your bill each month.

Most plans have a base charge of five to ten dollars, but you should keep a lookout for plans with higher base charges.

Energy Charge: The energy charge is the rate at which your energy provider bills you for your electricity usage. 

It does not take into account your usage levels and is essentially the baseline for what you would be charged for each kWh of electricity you use.

Bill/Usage Credits: Bill or usage credits are also included in the pricing part of EFLs. This tells you that an energy provider will reduce your payment by a particular amount if you use a certain number of kWh each month. 

This can be a wonderful deal for certain people, but keep in mind that if you don’t meet the usage criteria laid out in the EFL, you may be charged a much higher fee, which can lead to high bills.

Learn how to avoid high electricity bills in Texas.

TDU Delivery Charges: The last price section you should look at is the Transmission and Distribution Utility (TDU) charges. 

These will provide you with a fixed fee that will be applied to your monthly statement, as well as an additional cost per kWh of electricity used. TDU pricing in Texas is regulated and can only be altered twice a year.

Product Disclosure: The disclosure part informs you of the type of energy plan you are enrolling in.

A fixed-rate plan maintains the same rate for your energy usage throughout the length of the contract.

A variable-rate plan, on the other hand, means that your supplier can adjust your pricing each month.

Contract Term: Most suppliers offer plans for 12, 24, and 36 months, but you can find shorter durations if you look hard enough.

If you’re new to comparing Texas power and moving into a rental or an apartment, you might be asking if you need to match your electricity contract with your lease. 

You don’t have to match them together, and you can choose the electricity plan that’s suitable for you regardless of the contract duration.

Keep in mind that Texas law prohibits providers from charging you a termination fee if you move before the end of your contract and are not required to transfer your service.

Termination Fee: If you want to cancel your service before the end of your contract period, you may be charged a termination fee. 

They may appear to be large, intimidating sums, but in some situations, paying the termination charge and switching to another provider might actually save you money over the course of a year.

Price Changes: The price changes part of the disclosure is an important spot to pay attention to. 

This indicates whether or not your provider has the ability to adjust the monthly fee you pay. 

These adjustments typically reflect changes in TDU rates or administrative costs levied by the Electric Reliability Council of Texas (ERCOT).

These variations in your rates are documented so that providers can compensate for changes in their costs that are beyond their control.

Pre-Payment or Advance Payment: You’ll also see a section indicating whether or not your plan allows for prepayment or making payments in advance. Plans that allow you to prepay are few and far between, so look for one specifically if you wish to make advance payments.

Renewable Content Disclosure: The final piece of the disclosure you’ll see tells you how much, if any, of your energy originates from renewable sources. You’ll also see an estimate of the statewide average, which is roughly 25%, and how the plan you’re considering compares.

Getting in Touch: The final portion of an EFL contains all of the contact information for the service provider who is in charge of that plan. If you encounter any problems or have specific inquiries, you can contact them by email or phone during the given office hours.

How to Understand an EFL

Now that we’ve gone over the various areas of information on an EFL, you’re probably wondering where you should start looking and what factors to consider when comparing different electricity plans.

The simplest way to approach an EFL is to start with the pricing structure. 

This will give you a decent indication of whether you’re looking at a simple plan, one with a lowering pricing structure as your consumption increases, or one with a more intricate structure that you’ll want to investigate further.

If you know how much power you use each month, you should be able to quickly determine how different plans compare to what you are currently spending, or you may estimate your usage if you are moving into a new home or apartment.

Once you’ve determined whether a plan’s pricing structure is within your budget, read the disclosures to see if the contract duration matches your desired contract length. 

Remember that you are NOT required to match your contract term with your lease period.

If renewable energy is important to you, after you’ve reviewed the pricing, scroll down to the bottom of the disclosures to learn how much renewable energy that plan consumes. 

The average in Texas is roughly 25% renewable content, so you might be able to locate a plan at a lower cost that still contains some renewable energy.

Before you make a decision, the energy plans in our marketplace always list the EFL, so you know precisely what you’re getting.

Ready to find your best energy plan and rate?.

Frequently Asked Questions

What is an Electricity Facts Label

EFL - Electricity Facts Label

The Electricity Facts Label (EFL) is a legal disclosure mandated by the Public Utility Commission of Texas (PUCT) that must be included with all energy plans. Amongst other factors, the EFL displays the average price per kWh charged if you use 500, 1,000, or 2,000 kWh per month.

Where can I find the Electricity Facts Label?

The Electricity Facts Label comes with every energy plan in Texas. On ComparePower you can view it by viewing the Plan Details for any plan you choose in our marketplace. Your energy provider can also send you a copy of your current EFL upon request.

What is the cost of electricity outside of the advertised 500, 1000, or 2000 kWh in Texas?

The Electricity Facts Label only discloses the price you’ll pay for 500, 1000, or 2000 kWh. To get the price for any other usage value visit ComparePower.com — We fix the EFL in Texas by allowing you to shop energy plans for any usage or with your home’s specific annual usage profile. Fully transparent electricity shopping is available.


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Understanding Your Electricity Bill

Every electricity consumer receives a monthly bill that details their energy company’s charges.

Most people, however, simply check the total amount at the bottom of their bill and accept the charge.

Your last bill may have surprised you and left you wondering what was charged.

This short guide will help you understand your energy bill and what you’re paying for.

Understanding the charges on your electricity bill will help you compare rates and save money on your next power bill.

Looking for Inconsistencies in Your Electric Bill

If your bill is higher than expected, there are a few places to look to find out why.

Average kWh: The first section to look at is the kWh of electricity used during your billing period.

Most providers will show you how much you used compared to last month, and some will show you how much you used last year.

Your high bill is likely due to increased usage caused by seasonal changes in weather.

Heating and cooling use a lot of electricity, so hotter and colder months mean higher bills.

Learn how to avoid high electricity bills.

Energy Charge: The rate you pay for electricity does not remain constant throughout your contract, but rather changes based on your usage. The electricity rate you are quoted is for specific usage.

Your plan probably shows you pay between 8 and 10 cents per kWh if you use 1,000 kWh during that billing period.

With some plans, the moment you use 1,001 kWh of electricity, your rate can double, and it can also change if you use less energy.

Plans with bill credits may also affect your electricity bill from month to month.

Some providers give you a discount if you use a certain amount of electricity each month.

If you have a bill credit plan and meet the usage threshold one month but not the next, you lose the discount, which can drastically change your energy bill total.

TDU Charge: If you have an unbundled bill from your provider, you can see those separate TDU charges and can compare them to previous bills to see if the prices have increased.

TDU charges can change, but they are subject to regulatory approval and can only change twice per year.

Plan: Lastly, look for changes in the name of your plan.

If your plan name changed, your provider may have switched you to another plan.

Your provider may have sent you a renewal notice that seemed like your plan would remain unchanged.

Once, your contract expires providers will generally raise your rate under the guise of a renewal offer. But this is in fact a completely new contract and rate.

Learn how to compare your provider’s renewal offer.

If you let your plan expire, you could also be placed on a “hold over” rate.

Your electricity provider will then change your rate month to month, resulting in significantly higher costs as demand increases.

Again, if you have an unusually high bill, look at how much electricity you used and how much you were charged for it to rule out any mistakes in billing.

Lower your electric bill with your home's usage and save big.

What’s on Your Texas Electric Bill?

The information on your electricity/energy bill is generally broken down into five main sections: account information, bill summary, a breakdown of your energy consumption, your current charges, and finally the price of the electricity you used.

Account information: This shows you the key details of your account. Your account number will be displayed, which can be used to help the provider find your information quickly if you run into any issues.

You should also find an ESI ID number, which is your electronic service identifier and is connected directly to your meter.

Bill Summary: Here you will find an overview of the current charges that you will need to pay. Most providers will break these down into smaller charges that show the energy cost, supply fees, market cost, utility charges, and taxes.

Energy consumption: this section shows your electricity usage throughout the billing cycle. Generally, you will see a comparison of the current month to the last month, which will be shown as kilowatt-hours (kWh) used.

Sample Electricity Bill

Front Page – Sample Electricity Bill
how to read electricity bill
Back Page – Sample Electricity Bill

How a Kilowatt-Hour is Calculated

Each month, your energy provider tracks the number of kilowatt-hours that you use and then charges you for that usage.

The amount of energy that you use fluctuates through different times of the year, which you will see reflected on your bill.

What exactly is a kilowatt-hour?

A kWh is the standard unit of measurement for electricity usage. It is a combination of both the speed at which something uses power (wattage) and the amount of time that electricity is consumed at that speed.

To calculate the kWh usage you might see on your bill, you can multiply the wattage of any appliance you have (most appliances have a label that shows you the wattage) by the number of hours that you use that appliance during the day.

So let’s use some numbers as a concrete example. Take your 1,000-watt microwave and say you got a little carried away and ran it for five hours.

That would put you at 5,000 watts of energy used, divided by 1,000, and just like that, you have used five kWh of electricity.

Now, this is an extreme example of electricity usage, so let’s put one kWh into real examples:

What can you power with 1 kWh?

  • Dishwasher: 100 minutes
  • Washing machine: 100 minutes
  • Desktop computer: 5 hours
  • 1500-Watt Space Heater: 40 minutes
  • 200-Watt Oven: 30 minutes

Find a lower rate plan and save money on your electric bill.

Charges on Your Electricity Bill

Looking at your bill you should see the electrical charges broken down into what are called delivery and energy charges.

Delivery Charges: Delivery charges cover the transportation of energy to your home from the company that generated it.

Energy Charges: Supply charges are the amount of electricity that you use and the rate you pay for that electricity.

Here it is good to make note of the two different types of bills that you may see from your provider. All plans will use the same transmission and distribution utility (TDU) charges, but your provider may show these at a bundled rate or an unbundled rate.

Bundled bills will show one combined rate for your electricity usage that lumps the TDUs and your supply costs together.

Unbundled bills will show each one of these as separate charges and give you some extra information to consider when looking at your total payment.

Frequently Asked Questions

What is the average electric bill in Texas?

Texas had an average retail price of 11.56 c/kWh in 2021, according to the U.S. Energy Information Administration. If the average household uses 1,000 kWh per month, at 11.56 cents per kWh, the average electricity bill would be around $115.60

How is electricity billed in Texas?

In Texas, electricity consumers are billed by their electricity providers. Customers are charged for both the electricity used (energy charge) and the delivery of the electricity (utility charge).

How do I read my electric bill?

You need to check total usage and then the breakdown of the costs being charged. We’ll show you here how to calculate the prices you paid and verify if it’s correct.


ComparePower Texas

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Moving to a new city is stressful, but shopping for an electric company was not! It took less than 5 minutes to enter my info, compare quotes, and start service. I really like that you could search for renewable energy sources of electricity; it was my first time realizing that green energy was an option in my new area, and I feel good about opting for renewable rather than coal-generated electricity.
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How electricity contract renewals work in Texas

You do not have to renew your energy contract with your electricity provider.

You can choose another provider and switch to a cheaper rate. We’ll show you how in this short guide.

If your electricity contract is about to expire, shop the market before renewing your contract.

Rates usually go up at renewal time. Providers offer low introductory rates to attract and acquire new customers.

Once you sign up and establish service many providers count on the fact that you won’t bother switching providers at renewal time to raise your rate so it is more profitable for them.

You may be leaving money on the table by accepting your provider’s renewal offer without comparing competing plans and rates.

Texas Energy

Texas electricity rates at a glance:

  • The average retail price of electricity is 12.8 cents/kWh
  • The average energy usage in Texas is 1,132 kWh/month
  • The average electricity bill in Texas is $144.90

Source: eia.gov

Easy, simple, best rates, just a click away.”

~ Stephen H. (TX, United States)

Last updated: August 2022

You have to renew or switch providers

It’s important to understand that you cannot continue with the same contract or price and must either accept the new offer (and a new contract) or switch to a different provider. 

While you can turn off the lights and replace all your bulbs and appliances with energy-efficient ones, the fastest way to save money is by finding a lower rate.

We’ll show you how to compare your provider’s renewal offer to competing energy plans based on your home’s annual historical electricity usage profile.

Comparing energy plans with your home’s historical usage is the best way to beat the gimmicks and save money on your electricity bill month after month.

Shopping rates for your business? Click here to compare business energy plans and rates from over 30 electricity companies in Texas.

Renewing could end up costing you more

The choice is yours in Texas. You can renew, switch providers, or do nothing at all.

Shopping for electricity in Texas can be confusing. Choosing the right electricity plan can be difficult, especially if you don’t know or remember how.

We get it. Nothing is more frustrating than trying to solve a problem you don’t understand. It’s like playing a game and you don’t know the rules.

It’s okay if you don’t know the rules. We’ll help you with that. Our mission is to help all Texans win the game of electricity.

If you’re reading this it’s likely that you haven’t thought about electricity in a year or more, so if you feel confused or frustrated, you’re not alone. We’re here to help you beat them at their own game.

Before you give up and accept your provider’s renewal offer, keep in mind that the offer is not a continuation of service at the same price.

You will not be paying the same rate by renewing with your provider. The renewal offer is a completely new contract with a new rate.

Don’t overpay for electricity. Join the millions of Texans who switch and save on their electricity bills year after year with ComparePower.

When your contract is nearing its end, we’ll give you all the details and a step-by-step plan to find the best electricity plan and rate for your home.

Let’s start by breaking down your provider’s renewal offer. 

Instantly compare competing Texas electricity companies.

Your provider’s renewal offer is rarely your best option

When your contract is coming to an end, your electricity provider will send you a renewal offer with the details of your new contract as well as your new electricity rate.

Texas law requires providers to send you a renewal notice at least 30 days before your contract expires.

However, you are likely to start getting phone calls and renewal offers up to 60 days, sometimes three months before your contract expires.  

It is generally not a good idea to renew your contract three or six months in advance.

Early renewal offers rarely have lower rates than what you are paying now. 

It is impossible to predict the rate of electricity in the future. Market rates may be lower closer to the expiration of your contract. 

Schedule a reminder here instead and we’ll remind you when it’s time to shop and switch.

You have 14 days before the end of your contract to switch providers without penalty in Texas.

The two-week window is a good time to look for deals and compare rates. 

Electricity companies are not on your side. Like any company, electric retailers operate on profit.

If you pay more for electricity, they will take it. Therefore, pay attention to the details of your renewal offer when your contract is about to expire. 

If you don’t shop around, you are stuck with a handful of energy plans offered by one company whose job is to take as much money from you as possible rather than provide you with the lowest rate.

There is no guarantee of savings. When you renew your energy contract, you do not keep the same rate. It is not an extension of your contract.

Even if your provider offers you the same rate on your renewal, competitive market rates might be even lower. You won’t know unless you take some time to shop and compare plans with your home’s usage history.

How do you compare your renewal offer? 

Generally speaking, there is no easy way to compare your provider’s renewal offer with market prices. 

Renewal offers and all electricity plans in Texas are required to advertise prices for three usage levels: 500, 1000, and 2000 kWh.

The price for usage outside of those three reference points is unknown to you. You won’t pay the advertised rate unless you consume exactly 500, 1000, or 2000 kWh per month.

When you shop for a plan based on the advertised prices for 500, 1000, or 2000 kWh, you may choose a plan that is not ideal for your home’s complete annual energy usage pattern.

Seasonal weather influences how much energy you use each month. During the winter and summer months, you will use more kWh because the temperature outside requires more heating or cooling.

Due to the seasonal differences in kWh usage, it is impossible to compare plans based on the three advertised usage points alone.

A great way to overpay on electricity is to shop at the advertised price; this strategy has been used by Texas electricity companies since the state deregulated its energy market.

Find out what you’ll really pay, not what is advertised. 

You only pay the advertised price if you use exactly the same amount of electricity as advertised. 

Electricity is the same. No matter where you buy it from, it’s the same energy. So why pay more for it when you can get it for less? 

Avoid overpaying. There is no need to give more of your hard-earned money to the electric company when you can beat them at their own game.

Follow this guide and you’ll be saving money on your electricity bill year after year. 

Switch to savings with your zip code.

How to compare your provider’s renewal offer

First, find your historical usage history.  You can access your historical usage by logging into your provider’s account dashboard.

Each provider has a different dashboard, but they all provide a way to look at and download your usage online.

Ideally, you should get at least 12 months of usage or as many months as you have usage for. 

Use the historical usage calculator below to enter your historical usage for each month.

After entering your usage, click on Compare Rates, then enter your zip code.

Your home’s specific usage profile should be entered now so that the next screen looks like the one below (except with your home’s specific annual usage profile).

Electricity Usage Calculator

Now you can review the total annual cost of the plans on the ComparePower marketplace based on 12 months of your home’s historical usage profile. 

This is how much you will pay for your electricity for an entire year of usage were you to choose any of the plans on ComparePower. 

To find out if you are getting a better deal you will need to look up your electricity billing statements and add up the amounts for the past 12 months. 

You should switch if the total annual cost you paid your provider exceeds the lowest cost plan on ComparePower. 

Click “Check Availability” and you’ll be on your way to a cheaper energy plan within five minutes, confident you’re getting a great deal.

We’ll even remind you when your contract is about to expire so you can come back and save year after year.

Compare the best energy plans in Texas.

The easiest way to save is to switch

The cheapest prices are only available to new customers. When you enrolled with your current provider, you may have been lured by a low introductory rate that is only available to new customers.

When you are nearing the end of your current contract, switching electricity providers to a plan with a lower rate is your best bet for saving money on your next power bill.

Do your homework. Texas electricity rates can change frequently, so do your research before enrolling in a plan. 

Compare energy plans and prices. If you’re looking for the lowest electric rates to save money, take your time to review and compare prices from competing providers. 

For maximum savings, shop with your home’s usage history and our historical usage calculator.

Comparing energy plans in Texas based on your usage history is the best way to save money.

Do not let your contract lapse. Inaction is by far the most costly. As soon as your contract expires, you’re put on a holdover rate, one that fluctuates based on market conditions, causing unexpectedly high electricity bills.

By letting your contract expire without taking action, you may end up overpaying for electricity. Schedule a reminder and we’ll notify you when it’s time to switch and save.

If your electricity contract expires, your power will not go out. You will continue to receive power from your current provider, but at a high rate called a holdover rate.

Holdover rates are variable market rates and are expensive and unpredictable. The majority of Texas consumers choose a fixed-rate plan.

You are entering into a legal contract. Remember that a contract, whether you opt to renew or switch, is a legal contract between you and your energy retailer. 

You can change your mind. You can cancel an electricity contract with no penalty within 3 days in Texas by contacting the provider directly. 

Cancellations are possible at any time, but there may be an early termination fee if you switch providers before your term is due. Be sure to read your contract and understand the cancellation rules.

Still confused about why this is so important?

Other considerations:

In addition to the price, consider features that may be important to you when comparing different electricity plans. Here are some additional considerations when you are shopping for a new energy plan.

Contract Term: Most electricity contracts are 6-12-24 months. The length of your lease does not have to match the length of your electricity contract. Because energy contracts in Texas can be canceled when moving, you can pick the term length that offers the best price.

Rate type: Most Texas consumers prefer a predictable, fixed-rate electricity plan over a variable rate.

Features: Some plans include features like 100% Green, Free Nights & Weekends, or a free Nest Thermostat. 

Price: The best electricity plan or rate is often determined by the price per kWh and your home’s kWh usage. Learn how to switch energy providers in Texas.

Deposits: Whether a deposit is required is determined by your credit score and utility payment history. There might not be a deposit required from some ComparePower providers, so simply pick a plan and enroll for service. 

If a deposit is required, we check our marketplace to see if other providers won’t require one from you. You can easily see the deposit requirements for all providers with just one order. You can save a lot of time and frustration finding a no-deposit plan on ComparePower. Want to avoid deposits and credit checks altogether? Go Prepaid here.

Learn how to get no-deposit lights in Texas.

To recap, switching is easy—10 minutes of your time can save you hundreds of dollars a year on your electric bill. You do not even have to call and cancel service with your existing provider. Switch on ComparePower and we’ll handle it all for you.

Ready to save time and money on your electricity bill?

Frequently Asked Questions

Who has the best energy rates in Texas?

Texas has no single electricity provider known for the most competitive rates. In Texas, the price of your energy depends on the amount of energy that you use each month. To find a low rate and avoid gimmicks, shop electricity plans with your home’s annual usage profile. Enter your home’s historical usage on ComparePower.com and you’ll be on your way to savings in minutes.

What is the best month to renew electricity?

In general, the cheapest times of the year for electricity are during the spring and fall months when there is less demand for electricity. Do not let your contract expire before switching providers. Doing so can be costly. ComparePower.com can help you find the best rate with your home’s annual usage profile. It is the best way to shop for electricity in Texas if saving time and money are important.

What is a good rate for electricity in Texas?

Texans paid an average of 12.56 cents per kilowatt-hour in 2021. You can find rates on ComparePower that are much less than the Texas average when you shop with your home’s historical usage profile. The best way to shop energy plans and save money is by using your historical usage profile on ComparePower.com

When can you switch electricity providers in Texas without penalty?

In Texas, you have 14 days before your contract expiration date to shop the market and switch to a new provider without penalty.

Will my new energy provider cancel my old contract?

Yes, make sure you’re within your 14-day grace period to avoid any early termination penalties, then simply enroll for electricity service with a new provider on ComparePower.com and we’ll handle the break-up call for you.