How to choose an electricity plan in Texas

How do you choose an electricity plan?

Work out three things about your home: how much electricity it uses, what equipment it has, and what you want from the contract. Then price every plan at your usage, set aside the ones that cost clearly more, and choose among the rest by fit.

1. Confirm you have a choice. Most of Houston, Dallas–Fort Worth, Corpus Christi, and Lubbock have retail choice. Homes in Austin, San Antonio, El Paso, and most electric cooperative areas buy from the local utility instead, so check the address first. In an apartment, also check whether the unit has its own meter or electricity comes with the rent.
2. Find your usage. Use 12 months of kilowatt-hours (kWh), the unit your bill counts. Without a history, use about 500 kWh a month for an apartment, 1,000 for a house, or 2,000 for a large home.
3. Note what's at the home. Solar panels, a battery, or an electric vehicle can change which plan fits more than the rate does.
4. Decide what the plan should do for you. That might be a longer price lock, a short commitment, a plain standard plan, or renewable supply.
5. Price a shortlist at your usage, then choose by fit. Compare in dollars a month, and read each plan's documents before you sign.

If your contract is ending, a switch that takes effect in the final 14 days before the expiration date carries no early termination fee, and many providers let you enroll ahead with that start date.

Sorting a list by the price at 1,000 kWh is a common shortcut. It works for a home that uses about 1,000 kWh every month, on a plan whose price doesn't depend on reaching that number. Most homes swing with the seasons, which is why the price check comes after the questions that decide what you're pricing.

What differs between Texas electricity plans?

The contract differs; the electricity doesn't. The same local utility delivers the power and restores outages whichever plan you choose. What changes is how the price is built, how long it holds, and what else the plan and provider give you: equipment programs, billing and service, and how the renewal is priced. Those can matter as much as the price, or more.

Most residential plans in Texas are fixed-rate. Under Texas rules, a fixed-rate term runs at least three months, and the price holds for all of it except for changes in the utility's delivery charges, administrative fees from ERCOT (the state's grid operator), or new or changed fees from laws or regulations. A variable price can be offered to a home only month to month. Plans that tied a home's price to market indexes are gone: wholesale-indexed plans, behind some of the largest bills during Winter Storm Uri in February 2021, have been barred for homes since September 2021, and indexed plans since February 2022.

Fixed-rate plans still come in different shapes. Every plan has an Electricity Facts Label, or EFL, which shows its average price per kWh at 500, 1,000, and 2,000 kWh a month, delivery charges included. Those three prices are slices through a curve, and the curve's shape is what you're choosing:

Which plan fits a home like yours?

A year of your home's usage usually points to a starting plan type. Find the household closest to yours, then test that type against real offers with the checks below.

How much electricity does your home use?

Use the last 12 months if you can, because both the yearly total and the gap between your mildest and hottest months affect which plan fits. Your bill and provider account show it, and Smart Meter Texas has the same data down to 15-minute intervals.

How precise you need to be depends on the plan:

• A simple fixed-rate plan needs only a typical month or the yearly total.
• A plan with a bill credit, usage tiers, or a minimum-usage charge, whose price changes when a month crosses a set kWh level, needs every month, especially your lowest ones.
• A time-of-use or free-nights plan needs your hours as well as your months.

The average Texas home used 762 kWh in March 2024 and 1,570 in August, and a house with electric heat can peak in January instead. The usage guide shows how to read your own pattern, and the guide for new residents covers a first plan with no history.

Does anything at your home change which plan fits?

Yes, if it has solar panels, a home battery, or an electric vehicle. Each changes how much electricity the home buys and when, so a plan built for that equipment can be worth as much as a lower rate, or more. If the home has none of these, a standard fixed-rate plan is usually the right place to start.

The buyback plan costs 1¢ more per kWh at every EFL row and still saves the solar home about $220 a year, because it pays for the 4,350 kWh the panels export. For homes with solar or a battery, compare net yearly dollars, because the EFL's average price leaves out export credits.

• Solar panels. Compare the export credit, any caps, and whether unused credits carry forward. Some plans put a solar lease or loan and the electricity on one account and one bill, which can make the true monthly cost easier to see; check how the plan is tied to the system agreement if you sell the home or change providers. The solar buyback guide shows how to price both sides of solar buyback plans.
• A home battery. Some plans pay or credit the home for letting a program use the battery when the grid needs it. Check the backup reserve, how often the battery can be called, and what happens to the program if you change plans. The home battery guide covers program terms.
• An electric vehicle. Charging can add several hundred kWh a month, and it's one of the few large loads you can schedule. A plan with lower-priced or included charging hours fits when the car reliably charges in that window. With solar too, charging in the daytime gives up the export credit to avoid buying that power at night, so the gap between those two prices decides when to charge.
• A pool, electric heat, or a large home. These mostly move you up a usage level. Price plans at your higher months, and for electric heat, at January as well as August.

Read the eligibility terms: some time-of-use and free-nights plans exclude homes with solar, batteries, or EVs, and some equipment programs require a specific plan. Count a feature's value only if the household will use it.

What do you want the plan to do for you?

Decide what matters most this time: a price that holds longer, the freedom to leave soon, a plan you don't have to think about, or renewable supply. Each points to a different term or plan type.

• Lock in my rate longer. A 24- or 36-month term holds the price longer and skips a decision, for a longer commitment and often a larger early termination fee. The contract-length guide compares terms at the same usage.
• No long contract. A month-to-month plan has no early termination fee, but its price can change every billing cycle, and it tends to run higher, partly because the provider can't lock in supply for a set term when the customer can leave any month. If the reason is a possible move, a longer term may still work, because moving waives the early termination fee (see the FAQ below).
• Just a standard plan. One energy charge, usually a monthly base charge, and no credits, tiers, or time windows. The bill moves in a straight line with usage, so it's easy to predict and to check against the EFL.
• 100% renewable. The EFL shows the plan's renewable share next to the statewide average. A plan can be called renewable only when it's 100% renewable or the claim states the percentage, and providers back the claim mainly by retiring renewable energy credits.

What is a good electricity rate in Texas?

There's no single good number, because delivery charges differ by utility and the price per kWh depends on your usage. Judge a rate by the EFL's average price at your usage against other plans for the same address. For context, Texas homes paid about 16¢ per kWh over the 12 months through July 2026, according to the U.S. Energy Information Administration.

An advertised 9.8¢ is often the energy charge alone, or a bill-credit plan's best-case price. Add delivery, about $59 to $85 a month at 1,000 kWh depending on the utility, and a typical base charge to a 9.8¢ energy charge, and it lands around 16¢ to 19¢. A 16¢ renewal and a 9.8¢ ad can describe the same price, so check which number each one is. The delivery-charge guide lists current rates for each utility.

How do you compare prices between plans?

Compare each plan's EFL average price at your usage and turn the gaps into dollars a month. Within about 3%, plans are tied; up to about 10% more is worth paying only for something you can name.

At the 2024 Texas average of 1,096 kWh a month, every 1¢ per kWh is about $11 a month, or about $130 a year: $5 a month at 500 kWh, $20 at 2,000. A two-year plan priced 0.7¢ above a one-year plan is an $8-a-month decision, to weigh against what two years of a steady price is worth to you.

For a simple plan, the EFL's charges give any month's bill. At 1,300 kWh, the simple plan in the curves above costs 9.0¢ × 1,300 = $117.00, plus its $4.95 base charge and delivery of $73.94 ($4.39 + 5.35¢ × 1,300): $195.89, or 15.1¢ per kWh. For a plan with a credit or tier, do the same for each month and treat the result as a range, measured against the lowest-priced plan you would actually keep. Leave out prices that hold only for a first term before a much higher renewal.

To skip the arithmetic, the EFL analyzer reads a plan's facts label, prices it at several usage levels, and shows where a credit or threshold changes the result.

A practical way to read the gaps:

• Within about 3% of the lowest price, around $5 a month at typical usage, plans are tied. Choose by fit, and if two fit equally well, take the cheaper one.
• Up to about 10% more, around $16 a month, pay the difference for something specific: a longer lock, renewable supply, or a feature the home will use.
• Beyond that, the extra cost has to buy a lot, usually a feature that changes the bill itself, such as an export credit for a solar home priced in net yearly dollars.

A plan should fit the home you have, without running the heater in October to reach a credit; the bill-credit guide shows a three-bill test for threshold plans.

Where do you find plans, and how many should you compare?

Providers' websites and comparison sites list plans with their EFLs. Three to five plans are enough to compare: the lowest-priced simple 12-month fixed plan at your usage, one or two that match what matters most to you, and your renewal offer if you have one.

Power to Choose, the official comparison site of the Public Utility Commission of Texas (PUCT, the state's utility regulator), lists offers from providers that choose to post there. Its lowest listings at a single usage level often belong to plans built around that level or priced for a first term, so price your shortlist at your own months before relying on the sort order.

When should you choose, and how long does it take?

Choose when something starts the clock: a contract nearing its end, a move, or a switch you've decided to make. Texas rules build in time for each, and the power stays on throughout.

• A contract ending. Your provider must send at least three expiration notices, the last at least 30 days before the end for contracts longer than four months. A switch that takes effect in the final 14 days before the expiration date carries no early termination fee. If you do nothing, service continues month to month at a price that can change each billing cycle. The renewal guide shows how to judge the offer; staying is a good outcome when it holds up.
• A move. Request service a few business days before move-in, and ask about any expedited-service charge if you need it sooner. The setup guide covers the steps.
• A switch mid-contract. Compare the early termination fee with what you'd save over the months left; the early termination fee guide has the break-even math.

The new provider handles a switch with the utility and confirms the start date. The switching guide covers the handoff and the final bill from the old provider.

Does it matter which electricity provider you choose?

Yes, though not always in the ways people expect. The local utility owns the wires and the meter and restores outages whichever provider you choose, but the provider shapes much of your experience around them. A good provider gets service started with the utility promptly, responds quickly when something goes wrong, and bills clearly. Some also watch usage data and flag unusual patterns that can point to a problem with the home or its equipment. The provider also runs any plan programs and prices your renewal when the term ends.

The PUCT publishes two views of complaint data:

• The complaint statistics count complaints by provider and category, such as billing and switching without permission, over the latest six months. They also list each company's brand and former names. Counts aren't adjusted for size, so large providers show more.
• The complaint scorecard adjusts for size, ranking providers against each other in five groups of about equal size by complaints per 1,000 customers over a rolling six months, whether or not the provider was found at fault. It covers only providers that list plans on Power to Choose.

Look up the provider named on the EFL. A plan sold under one brand can be served by a retail provider with a different name, and that provider is the one the PUCT counts.

Then look at how the provider prices renewals. Your renewal notice shows the offer, and providers must post the current price of each month-to-month plan, with up to a year of history, on their websites. A contract that expires without a renewal rolls onto one of those plans, so the history shows where a renewal could start.

Reviews help most when you read them for patterns, like repeated billing errors or problems that stayed unresolved. Check the practical side as well: how you reach a person and whether the account shows your usage clearly.

What should you check before you sign?

Read three documents for the exact plan: the Electricity Facts Label, the Terms of Service, and Your Rights as a Customer. Confirm the price at your usage, the term and end date, any early termination fee or deposit, and the eligibility rules. Then save copies.

Make sure the documents match the plan you priced, including the plan name, version, and utility area. Plans with similar names can differ in price, term, or credits.

If a formula is hard to follow, the EFL analyzer can read the label and explain each charge before you agree to it.

A few sales practices deserve a second look:

• Pressure to decide on the spot, at the door or on the phone. A legitimate provider will let you read the EFL before you agree.
• Sites or callers presenting themselves as the utility or the state. Where you have retail choice, the utility leaves plan sales to retail providers, so check the provider named on the EFL.
• A first-term price far below everything else. Check the formula and term, and the provider's month-to-month price, to see where a renewal could start.

Choosing an electricity plan FAQ

What is the best electricity plan in Texas?

No single plan is best for every home. The best plan for you fits how much electricity the home uses and when, works with its equipment, does what you want from the contract, and is fairly priced at your usage. If you're unsure, a simple fixed-rate plan with a 12-month term is a reasonable place to start.

Is a fixed-rate or variable-rate electricity plan better?

For most homes, a fixed rate. It holds the price for the term, except for changes in regulated delivery charges and certain fees. A variable-rate plan is month to month: no early termination fee, but the price can change every billing cycle. Indexed and wholesale-indexed plans, which tied a home's price to market indexes, can no longer be offered to Texas homes.

What contract length should I choose for my first Texas plan?

A 12-month fixed term is a common starting point because it gives you a year of bills to judge the next decision by. Choose a longer term if price certainty matters more than flexibility. If you might move, Texas rules waive the early termination fee when you move, give a forwarding address, and show proof of the move if asked.

Does my credit score affect my electricity rate in Texas?

Not on a plan with a term of 12 months or less: Texas rules bar a provider from using your credit history or past utility payments to set the price. Credit can decide whether a deposit is required, capped at the greater of one-fifth of a year's estimated bills or two months' estimated bills and refunded after 12 on-time payments in a row. Providers must waive the deposit for customers 65 or older who aren't behind on an electric bill, and prepaid plans don't require one.

Should I choose the cheapest plan on Power to Choose?

Only if it stays the lowest after you price it at your own usage and check what follows the first term. Some of the lowest listings are priced below the provider's usual rates to attract new customers, and the renewal price can be substantially higher. Others depend on reaching exactly one usage level.

Do I need to change electricity plans every year?

No. A reliable provider that prices renewals fairly removes the need to switch every year. Pay attention when you sign and when the contract nears its end; if the renewal still fits your home and is fairly priced, staying is a good outcome.

Sources and related reading

The Public Utility Commission of Texas's customer protection rule for retail providers, 16 TAC §25.475, defines fixed and variable products, bars indexed and wholesale-indexed products for residential customers, sets what an EFL must show, bars using credit to set the price of residential terms of 12 months or less, and governs expiration notices, month-to-month price disclosure, and the moving waiver. The provider-selection rule, §25.474, sets the three-business-day right to cancel a switch; the deposit rule, §25.478, sets deposit limits, waivers, and refunds; and the renewable energy rule, §25.476, governs renewable claims. Delivery charges are the utilities' current residential rates, listed in the delivery-charge guide. The statewide average price and monthly usage come from the U.S. Energy Information Administration's electricity data for Texas homes.

Reviewed October 19, 2026. This guide provides general educational information, not legal advice. Rules and plan terms can change; confirm current PUCT materials and your plan documents for your situation.

Continue with how to read an Electricity Facts Label, bill-credit and free-nights plans, comparing contract lengths, solar buyback plans, or renewing or switching when a contract ends.