How to shop for a Texas electric plan without getting tricked

Texas deregulated its electricity market so that in most of the state, you don't get your power from one default utility — you choose a Retail Electric Provider (REP) from dozens of competing companies, each offering their own plans. The company that actually owns the wires to your house (the TDU, or delivery utility) is a separate thing entirely and isn't something you get to pick — more on that below. Plans are usually priced per kilowatt-hour (kWh), and that price is where almost all the real differences — and almost all the gimmicks — live.

The four plan types you'll run into

Nearly every plan on the market is one of these four structures. Knowing which one you're looking at tells you most of what you need to know.

• Fixed rate — your price per kWh stays the same for the whole contract term. Easiest to budget around, since you know exactly what you're getting into. The tradeoff: most fixed plans carry an early termination fee if you cancel before the term is up, so it's worth knowing that number before you sign.
• Variable rate — your price per kWh can change month to month at the provider's discretion, often tracking demand. No long-term contract and no early termination fee, so you can leave anytime — but your bill can also move on you with no advance notice. Better suited to people who want flexibility more than predictability.
• Prepaid — you pay for electricity before you use it, similar to a prepaid phone plan. No deposit required and no traditional monthly bill. The catch: service can be disconnected on short notice if your balance runs out, so it's not available to households with Critical Care medical status, and it takes more active monitoring on your part.
• Time-of-use — different prices apply at different times of day or days of the week, often cheaper nights or weekends. This can be a real deal if your usage naturally shifts to the discounted window — but if it doesn't, the advertised "free nights" rate isn't the rate you'll actually pay most of the time.

Where the real terms actually live: the Electricity Facts Label

Every plan is required to publish an Electricity Facts Label (EFL) — a standardized, one-page disclosure that spells out the actual energy charge, any base charge, the delivery charge, the contract term, and — critically — the exact termination fee language, including any exceptions (like a waived fee if you're moving). The advertised headline rate on a provider's website is a summary; the EFL is the real contract math. It's dense reading, which is exactly why we built this site: we read the EFL for you and surface the parts that actually matter directly on each recommendation, instead of leaving you to decode a PDF.

The one thing that trips up almost everyone new to Texas: your delivery utility

Your ZIP code determines which company owns the physical wires to your house (Oncor, CenterPoint, AEP, TNMP, or a handful of others) — and that delivery charge gets baked into every plan's advertised price whether you notice it or not. You don't get to shop for this part; it's just a fact of your address. Some ZIP codes even straddle more than one delivery utility's territory, which is a genuinely confusing wrinkle we walk you through automatically if it applies to you.

Quick checklist before you sign anything

• What's the actual price per kWh at your realistic usage level (500 / 1000 / 2000 kWh), not just the headline number?
• Is there an early termination fee, and does it have a move-out exception?
• Is a deposit required, and is that disclosed anywhere?
• If it's a bill-credit or time-of-use plan, does your actual usage pattern match what the discount requires?
• What's the provider's track record — is this a name you actually recognize, or should you weight that uncertainty into your decision?

Source: Public Utility Commission of Texas, Ways to Save — Shop for Electric Plans. Learn more directly from the PUCT at puc.texas.gov/industry/electric/plans.