What Is PowerToChoose.org?
The Power to Choose website is free to use and has an easy-to-use interface and search tools. Just answer a few basic questions, and you'll get a list of Texas electric providers. Energy Texas aims to provide you with the same easy experience that lets you choose the right plan for yourself. By entering your zip code here, you'll find a list of available plans to compare.
The History of Texas Electricity Deregulation
In 1999, the Texas Legislature deregulated most parts of Texas, opening the doors to free market competition while giving residents the power to choose their electric companies. By 2002, the system was in full swing, and Texans had the power to choose electricity service from hundreds of different electricity providers.
Understanding Your Power to Choose
The Texas electricity market comprises several key organizations and companies responsible for maintaining and managing the power grid, the physical power lines and infrastructure, and the electricity production itself. Let's look at who the players are and how they help make it happen.
Electricity Reliability Council of Texas (ERCOT)
The Electricity Reliability Council of Texas (ERCOT) is the grid's independent system operator, responsible for supplying 24 million Texans with electricity. They have four areas of focus:
- Regulating the wholesale electricity market
- Ensuring access to transmission
- System reliability
- Managing the retail-switching process
Transmission & Distribution Utilities
Transmission and distribution utilities operate and maintain the lines and infrastructure along which electricity is delivered to customers who use it. The PUC regulates five transmission and distribution facility owners in Texas:
- Oncor Electric Delivery
- CenterPoint Energy
- Texas-New Mexico Power
- AEP Texas
- Sharyland Utilities
Retail Electricity Providers
Retail electricity providers, such as Energy Texas, are the entities offering the choices as they are the companies that sell electricity. There are hundreds in the state, and they operate independently, offering a variety of plans, promotions, and rates by kilowatt-hour.
Public Utility Commission (PUC) of Texas
Created by the Texas legislature in 1975, The Public Utilities Commission (PUC) of Texas oversees ERCOT and the marketplace and ensures that retail providers comply with regulations. Their website, PowerToChoose.org, is a free resource where consumers can compare providers' plans and rates.
Power Generation Companies
Power generation companies, as you might guess, create electricity. Typically, these are large, industrial-scale operations generating billions of kWh per year from wind, solar, gas, coal, and others. Still, even a residential customer with solar panels technically grid qualifies as a power generator.
Types of Electric Plans in Texas
Different electric providers offer different electric rates and plans. Two plans - fixed-rate electricity plans and variable-rate electricity plans - are the most common types of Texas energy plans, but there are a couple of others, too.
Fixed-Rate Electricity Plans In Texas
A fixed-rate plan has a set price per kWh that doesn't change. You're locked into the kWh price you pay for the length of your contract. Regardless of the factors impacting the electric power market, your rate per kWh remains steady.
While fixed-rate plans are generally pretty straightforward, some may have a minimum electricity usage level. You could be charged a higher rate than advertised if you don't meet that minimum. Additionally, most plans have an early termination fee if you break the contract before its end date.
Variable-Rate Electricity Plans In Texas
With a variable-rate plan, your electricity rate can go up and down. Variable rate plans, or changing rate plans, have no monthly contract or cancellation fee, but the kilowatt-hour rate can go up or down within the market. Variable plans let customers benefit from lower prices, but they can also lead to higher rates if weather or market conditions aren't good.
The price per kilowatt hour can change on a variable-rate plan. That means you may pay more for power during periods of high demand, such as a hot Texas summer. Variable-rate plans usually run month-to-month, which may make it difficult to estimate or budget for your energy costs.
Prepaid Electricity Plan Options In Texas
Prepaid plans provide service on a pay-as-you-go basis. No deposit, no contract, just prepay for your electricity promptly. With prepaid plans, you will not receive a monthly bill. Many companies send emails or text messages to let you know how much electricity you have used and how much money is left in your prepaid account. If your account balance falls below the required amount, your service can be disconnected with little notice. These plans require close monitoring and the ability to receive electronic or phone notifications for essential communications such as balance updates. These plans generally charge a higher rate than non-prepaid plans.
Indexed-Rate, aka Market Rate, Plans
Indexed-rate plans (also called a market rate plan) are like variable plans because the price per kWh can go up or down. The difference is that the rates are tied to a pricing formula connected to a publicly available index. If the index rises, your rate will too. But if the index drops, so does your rate. If you consider one of these
An indexed-rate electricity plan is a more stable form of a variable-rate plan. Index-rate plans are tied to a published market price index. With an indexed plan, the price per kilowatt-hour will change at specified points during the life of your contract. If you're considering these plans, ask the electric company for specifics about the pricing formula and how they receive notifications of index changes.
The Energy Facts Label Gives You the Info to Exercise Your Power to Choose
There are so many retail electricity providers and even more electricity plans. How can you find out the most important details about the plans they're offering? Say hello to the Energy Facts Label. This handy info sheet outlines all the essential information of a Texas electricity plan and every plan listed on the Power to Choose website has an EFL featured prominently that includes information like:
- The price charged for electricity used in kilowatt-hours (kWh).
- Base charges are a fixed monthly fee to cover the service's cost.
- Any delivery charges to the TDSP.
- Length and expiration date of the contract.
- Early termination fees for breaking the agreement.
- Type of plan, e.g., fixed-rate, variable-rate, or indexed.
- Payment methods accepted.
- Any other applicable charges, fees, and taxes.
The power to choose means you get to decide based on what's important to you. If you live in one of the more than 400 cities in Texas' deregulated energy market, take advantage of it and find an electricity plan that meets your needs.
Want renewable energy? You got it. Want a provider that's part of the community? Those are available. If you shop by price first, that's fine too. It's your call - that's the power to choose!
Learn the Lingo:
The Glossary of Everything Power-to-Choose
Average Payment Plan:
A billing arrangement in which the customer pays roughly the same amount per month, with the balances being periodically tried to account for over or under payments.
The price per kWh based on usage levels.
Automatic payment of electric bills to a retail electric provider from a customer's bank account or credit card.
The fee applied to a monthly electric bill regardless of how many kilowatts (kWh) were used.
A non-profit utility owned and operated by a city; city-owned utilities may opt into the Texas retail electric marketplace.
The number of months of your contract; typically one, six, 12, 18, 24, or 36 months.
The illegal practice of adding charges to a customer's bill without their approval.
Many retail electric providers deliver invoices electronically and offer incentives for paperless billing. Some may even require it.
Complaints concerning disconnection of service include a lack of appropriate notice, disconnected service with a payment plan in place, and the amount in dispute.
Distributed Renewable Generation:
Programs for customers who own small-scale renewable power systems and want to sell power back to the grid.
Early Termination Fee:
This is the fee you'll pay if you cancel the contract before its end date.
A member-owned electric utility that distributes electricity to its members.
Electricity Facts Label:
A fact sheet that provides customers with standard information about an electric plan, including contract terms, pricing, fees, and the percentage of renewable energy offered.
Electric Reliability Council of Texas (ERCOT):
The organization responsible for managing and maintaining the state's electrical power grid.
Energy Facts Label:
The electricity facts label, or EFL, discloses essential information about the plan's term length, early termination fees, renewable energy content, and every other piece of information that might be glossed over in some of the advertising.
The price per kWh for electricity.
An electricity plan where the kWh rate is locked in and will not change because of market conditions or other variables for the length of the contract. (Note that this excludes Texas Regional Entity administrative fees and federal, state, or local fees beyond your REP's control.
Texas electricity is produced by natural gas, coal, nuclear power, wind, water, biomass, or solar energy.
Indexed Rate Plan:
An indexed rate plan, or a market plan, is directly tied to a pricing formula connected to a publicly available index. If the index rises, so do your monthly rate will. But if the index drops, your rate does, too.
The amount of electricity you use each billing period will be expressed on your bill in terms of kilowatt-hours.
Local Wires Company:
Previously known as the Transmission and Distribution Utility, this company delivers electricity, reads your meter, and maintains the poles and wires.
Minimum Monthly Fee:
If your plan requires you to use a minimum amount of electricity per month and you don't, you could be subject to a minimum monthly fee.
The highest 15 to 30-minute period in 12 months.
Prepaid Electric Service:
Pay-as-you-go electric service where you pay in advance, and usage is calculated daily with a smart meter or another device.
Provider of Last Resort:
The Provider of Last Resort (POLR) serves as the "backup" provider when an electric company leaves the market for any reason. If this happens, customers may opt for service from the POLR or switch to another retailer.
Public Utility Commission of Texas (PUC):
The PUC is a state agency tasked with regulating the delivery of electricity and enforcing consumer protection in Texas.
Electricity made from renewable sources like wind, water, biomass, or solar. The amount of renewable energy a plan uses is listed on the Electricity Facts Label.
Retail Electric Provider:
These companies sell electricity to customers.
The illegal practice of switching services without customer approval.
Terms of Service (TOS):
This contract between a Retail Electric Provider and a customer describes fees, the length of service, and other important information.
Transmission and Distribution:
The delivery of electricity over wires to your house, provided by the local wires company (aka, the Transmission and Distribution Utility), which maintains the poles and wires and responds to emergencies and power outages.
Transmission/Distribution Service Provider (TDSP) Fees:
These government-regulated costs cover infrastructure, meters, and repairs and are present regardless of which company you choose. Texas-deregulated TDSPs include CenterPoint, Oncor, AEP Central, AEP North, and Texas New Mexico Power.
Measured in kilowatt-hours (kWh) and listed on your electric bill as "kWh used," usage is the electricity used during the billing period.
Plans where the kWh can go up or down based on the market.
Your Rights as a Customer Disclosure:
This document informs you of your rights as mandated by the PUC. Electric providers must provide this disclosure.
Renewable Energy Percentage:
How much energy in a plan is from renewable sources.
Frequently Asked Questions About Power to Choose
What is deregulation?
In 1999, the Texas Legislature passed a law allowing most Texans to choose their electric company. The law encourages free market competition and lower prices. Some areas, such as municipalities and cooperatives, are not required to deregulate, so customers in those areas may not have electric choice.
People in deregulated areas can choose their Retail Electric Provider. The Transmission and Distribution Utilities are responsible for delivering electricity to customers, regardless of their REP.
Do all Texans have the power to choose their electric provider?
No, communities served by municipalities, cooperatives, or investor-owned utilities can opt out of deregulation in Texas.
Can I be penalized for changing providers?
There is no penalty for changing providers unless you break a contract with your electric company and incur an early termination fee.
Do I have to tell my electric company if I find a new provider?
You do not need to contact your current electric company if you change electric companies, however you will be responsible for early termination fees that apply. Not contacting them won't get you out of those.
How are electricity rates calculated?
Electricity is measured in kilowatt-hours (kWh), which is the kilowatts an electric device uses in an hour. Monthly electric bills show the kilowatt hours used at the rate per kilowatt hour.
What happens to my electricity service in Texas if I move?
When you move to a new apartment or house in Texas, you can keep your existing contract if the new location is within the company's service area. If not, you'll need to find a new provider. Early termination fees do not apply if you have to cancel your contract because you move.
What are "bundled" vs. "unbundled" plans?
All plans are subject to Transmission and Distribution Utility charges. Some retail electric providers bundle the energy and TDU charges as one, others keep them separate.
How do I find my electricity usage by month?
If you have electric service, find "kWH Usage" on old statements. Additionally, SmartMeterTexas.com will show your home's past year of usage. If you're moving into a new place, ask the previous owner about their usage.
What if I don't choose a retail electricity provider?
If you don't select one, ERCOT will assign a REP for you. You'll likely pay double or even triple for your electric bill under your provider's "default renewal product." However, there may be solutions that better match your needs than ERCOT's assigned REP.