How to Choose the Right Electricity Contract in Texas (Without Losing Your Dang Mind)
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How to Choose the Right Electricity Contract in Texas (Without Losing Your Dang Mind)
Picking an electricity plan probably ain't on the top of your fun list, but getting it right can mean real money in your pocket. Thanks to deregulation, Texans have the power to choose who powers their home and how. That freedom is great, but it also means more options and more fine print.
We’re here to cut through the confusion and give you the no-bull guide to electricity contracts in Texas. Let’s get to it.
What in Tarnation Is an Electricity Contract?
In plain terms, it’s an agreement between you and your Retail Electric Provider (REP)—like us folks at Energy Texas. This little ol’ contract spells out:
Your price per kilowatt-hour (kWh)
How long your rate is locked in
Any fees or fine print
Your rights and responsibilities as a customer
Here are the three big documents you’ll see with any Texas electricity plan:
Electricity Facts Label (EFL): Think of this like the nutrition label on your plan—just without the calories. It breaks down the actual rate you’ll pay at different usage levels. Learn how to read an EFL like a pro.
Terms of Service (TOS): All the legal stuff. Payment terms, fees, and what happens if you cancel early.
Your Rights as a Consumer (YRAC): This one’s all about your protections under Texas law. Worth a look.
Fixed or Variable: What’s the Right Fit for Your Wallet?
Texas gives you choices—but that means you need to know what you’re signing up for.
Fixed-Rate Plans
Same rate every month, no matter what.
Easy to budget and predict.
Perfect for folks who don’t like surprises.
Here’s why Texans love fixed rates.
Variable-Rate Plans
Rates go up or down monthly with the energy market.
Could save you money—but can also jump sky-high when demand spikes.
Best for savvy shoppers who keep an eye on the market.
Curious about how they work? Check out our guide on variable-rate plans.
Short-Term or Long-Term: Which Way to Go?
Short-Term Contracts (1–6 months)
Great for renters, college students, or anyone who’s not ready to settle down.
Total flexibility.
Just be ready for rate changes—short-term plans can bounce around.
Long-Term Contracts (12+ months)
Lock in your rate and ride out market swings.
Ideal for homeowners or anyone planning to stay put.
Watch for early termination fees (ETFs) if you need to leave early.
Want to Go Green? It’s Easier Than Ever
Here in Texas, we don’t just talk about wind and solar—we lead the nation in renewable energy production. Many electricity plans (yep, even ours) offer 100% green options that won’t break the bank.
Back clean energy without installing panels
Reduce your carbon footprint
Get peace of mind and solid rates
Check out our guide to renewable plans in Texas and feel good about the power behind your light switch.
Don’t Let These Gotchas Catch You Off Guard
Deposits
Some providers require a deposit based on your credit. But good news: plenty of plans skip the deposit if you qualify—or offer prepaid options.
Early Termination Fees (ETFs)
These kick in if you end your contract early. But if you’re moving, you might be off the hook.
Contract Expiration
When your plan ends, your provider could bump you to a “holdover rate”—usually way higher. That’s a big ouch for your wallet.
Pro tip: Set a reminder 30–45 days before your plan ends so you’ve got time to shop. Here’s why that timing matters.
Mistakes Folks Make (and How You Can Avoid ‘Em)
Not reading the EFL
Forgetting to renew
Picking a plan that doesn’t fit your lifestyle
Ignoring your energy habits or seasonal changes
We’ve seen these missteps too many times—and we’d rather help you avoid the headaches.
FAQs
How do I avoid high holdover rates? Set calendar alerts 30–45 days before your contract ends. Shop early and switch before your old plan rolls over.
Can I switch providers mid-contract? You bet, but watch out for ETFs. If the new deal saves enough money, it might still be worth it.
Are no-deposit plans a thing? Absolutely. Some providers (us included) offer no-deposit or prepaid plans. Always read the EFL for the full picture.
Is renewable electricity more expensive? Not necessarily. Many green energy plans are just as affordable—and better for the planet.
When’s the best time to lock in a contract? Fall and winter usually bring lower rates. Some Texans ride out summer on a short-term plan, then lock in a long-term deal later.