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How to Choose Your Electric Provider
As a consumer advocate covering Texas electricity, I’ve witnessed countless struggles to navigate the complex world of retail electricity providers.
In this article, I’ll share my insights on choosing the best electricity provider for your needs and saving money on your annual electricity expenses.
TLDR: In Texas, choose the electricity provider with the best price for your usage. Retail providers don’t affect reliability, so find the cheapest plan that fits your needs.
Table of Contents
More Than Just Billing Companies
First and foremost, it’s important to understand the role of your retail electricity provider.
These companies primarily function as a billing service, purchasing electricity from generators at wholesale prices and reselling it to consumers at retail.
With around 100 retail electric providers in Texas, household names like TXU and Reliant compete for your business alongside smaller retailers, who often compete on price with the lowest rates.
Many Texans are wary of smaller retailers, wrongfully assuming that switching their retailer will affect the reliability of their electric service.
In reality, switching retailers will not impact your service reliability, and spending a few minutes comparing plans based on your home’s kWh usage can save you hundreds on your electric bills.
This is one of the easiest ways to save on your electricity costs in Texas, and it’s what energy deregulation was designed for – competition.
But you must use the free market and switch providers to realize these savings.
Learn how to switch electricity providers in Texas.
Are you moving in?
If you’re moving into a new home, you won’t have a usage history to rely on when choosing a plan.
A kWh calculator can help you estimate your usage and find the best plan for your needs.
Learn how to start service in Texas.
Electric Utility Companies
Many Texans mistakenly believe that their retail electricity provider is responsible for the reliability of their electricity service.
In reality, the utility company maintains the infrastructure, including the wires and poles that deliver electricity to your home.
If you experience a power outage, your utility company should be your first point of contact, not your retail provider.
Utility companies in Texas, along with their service areas:
- Oncor Electric Delivery – Serves the Dallas-Fort Worth metroplex and other parts of north, central, and west Texas.
- CenterPoint Energy – Provides electricity to the Houston metropolitan area and surrounding cities.
- AEP Texas – Serves southern and western Texas, including Corpus Christi, Abilene, McAllen, and Laredo.
- Texas-New Mexico Power (TNMP) – Operates in areas of Texas near Houston, Dallas, Fort Worth, and the Gulf Coast.
- Lubbock Power & Light (LP&L) – Serves the city of Lubbock and the surrounding areas in the South Plains region of Texas.
The Key Factor in Choosing a Provider: Price
When selecting the best electricity provider, price should be the primary consideration.
While some companies may tout their eco-friendliness or charitable contributions, your retailer does not determine the quality of your electricity service.
As a consumer, your goal should be to find the provider that offers the most competitive electricity rates for your specific usage profile.
Calculating the True Cost of an Electricity Plan
To find the cheapest plan for your household, calculate the total monthly cost of each plan you’re considering for an entire year.
This process involves using your previous year’s kilowatt-hour (kWh) usage data and the pricing information provided in each plan’s Electricity Facts Label (EFL).
You can manually calculate the cost of any electric plan using a spreadsheet by inputting your monthly kWh usage data, the plan’s base charge, energy charge, TDU delivery charges, and any applicable bill credits.
Following a step-by-step guide, you can determine each plan’s monthly and annual costs.
While this method is time-consuming, comparing plans based on your specific usage patterns is the most accurate.
As a shortcut, you can save hours using online tools like ComparePower’s savings calculator to compare plans quickly based on your usage.
Enter your zip code and compare plans tailored to your unique needs. Here’s how it works:
Making an Informed Decision
I advise Texas energy consumers to focus on price when choosing an electricity provider.
Be cautious of marketing claims and compare the projected annual costs of various plans based on your specific usage patterns.
Additionally, consider contract terms, cancellation fees, and customer service, as these can impact your overall experience.
Taking the time to understand the role of retail electricity providers, the importance of utility companies in maintaining reliable service, and calculating the actual cost of an electricity plan, you can make an informed decision and potentially save hundreds of dollars on your annual electricity expenses.
How to Choose Provider FAQs
Choosing the right electricity provider can be daunting, especially given the numerous options available in the Texas market. Here are some frequently asked questions to help you make an informed decision.
How do I start shopping for an electricity provider in Texas?
Start by understanding your energy needs. Look at your past electricity bills to determine your monthly usage.
Use tools like ComparePower.com’s proprietary usage history tool and kWh calculator to find the best-priced plan for your specific usage pattern.
What should I consider when comparing electricity plans?
Consider factors like price, contract length, renewable energy content, customer reviews, and additional features and benefits.
Remember, the cheapest plan isn’t always the best if it doesn’t suit your usage patterns or values.
What is the difference between fixed-rate and variable-rate plans?
Fixed-rate plans have a set price per kilowatt-hour that remains constant for your contract, providing stability and predictability.
Variable-rate plans can change from month to month based on factors like demand, fuel prices, and weather, offering potential savings when energy prices are low but can be unpredictable.
How do I choose between a fixed-rate and a variable-rate plan?
Consider your risk tolerance and ability to handle fluctuations in your electricity bill. A fixed-rate plan might be the best choice for stability and predictability.
A variable-rate plan could be a good fit if you’re comfortable with some risk and want the potential to save when prices drop.
Are there any green energy options available?
Yes, many Texas electricity providers offer plans that include energy from renewable sources like wind and solar.
Choosing a green energy plan can help reduce your carbon footprint and support the transition to a more sustainable energy future.
Make an Informed Decision
Armed with your usage information, you’re now ready to make an informed decision.
ComparePower lets you compare plans based on your specific usage, ensuring you find the best deal.
Whether you’re switching or starting a new service, we’re here to help you save time, reduce stress, and potentially save hundreds of dollars a year on your energy bills.
We provide the tools and information you need to make an informed decision and create a plan that will brighten your life.
Call us at 855-441-3030 Monday through Friday, 8:30 a.m. to 6:30 p.m., or Saturday, 9:00 a.m. to 4:30 p.m.
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