Texas Electricity Guide: Understanding Your Right to Choose Electricity in Texas
A Newcomer’s Guide to Texas Energy Choice, Electric Providers & Rates
What the Power to Choose Your Electricity Provider Means for You
In the past, Texans bought their electricity from a local utility that was often the only choice in town. Utilities had very little incentive to keep rates low or go the extra mile for customers. Today, Texas is one of a growing number of states with a competitive energy market that allows residents to purchase power from retail electricity providers or suppliers. Competitive markets are also referred to as deregulated energy markets. A competitive marketplace can have positive results for customers as competing energy providers offer a variety of plans and rates so you have the power to choose among them.
What is Texas Energy Choice?
Energy choice gives Texans the freedom to choose their electricity provider instead of being required to purchase power directly from the local electric utility. Competition among energy providers can drive down rates, spur the creation of new electric plans and lead to improvements in customer service.
Retail Electric Providers vs. Utilities in Texas
A retail electric provider or supplier such as Constellation purchases power on the wholesale market and sells it to customers. The utility is still responsible for delivering energy to your home, tracking your energy usage and maintaining the electric wires. With a choice of retail electric providers in one market, competition is possible that would not be with a single utility selling power to homes and businesses.
Types of Electricity Plans to Choose From in Texas
There are two popular types of electricity plans in Texas:
Fixed-rate electricity plans:
Customers lock in the price per unit of energy for the duration of the contract. In other words, you pay a fixed price for each kilowatt hour regardless of when you use it. These plans can protect you from price fluctuations due to demand, seasonality, and other factors beyond your control.
Variable-rate electricity plans:
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.