How to Compare Energy Rates in Texas

Thanks to deregulation, over 80% of Texas has a competitive electricity market where customers have the power to choose their own provider. The power to choose your own electricity company is great, but it can also be very stressful because there are over 130 retail electric providers throughout Texas.

Many providers give you many options when you're shopping around, but it can make choosing your electricity company very difficult. Each of these companies offers up to 10 different plans, which means you have hundreds, if not thousands of options to choose from. If you're wondering how to compare energy rates in Texas in a fast and simple fashion, ElectricityRates.com is here to help.

The Importance of Comparing Energy Rates
What to Look for When You Compare Energy Rates
What to Look at Besides the Listed Rates
How to Compare Energy Rates in Texas

The Importance of Comparing Energy Rates

Comparing energy rates is extremely important when you're in the market for a new electricity plan. The energy rate is what determines how much you pay per kilowatt hour every month and ultimately decides what your monthly electric bill is going to be.

You can decide which rate and plan are right for you by comparing different energy rates from various companies. Making the right choice can save hundreds of dollars a year while making the wrong choice could cost you.

What to Look for When You Compare Energy Rates

When you compare energy rates to find your next electricity plan, it's important to look at the plan as a whole. Retail Electric Providers (REPs) in Texas are notorious for making it very difficult to compare energy rates accurately. They like to sneak hidden fees, tiered rates, and other pitfalls into their plans that make it difficult to save money.

Tiered Rates

Tiered rates are where you pay a different rate for electricity based on how much you use. For example, let's say you see an electricity plan with a listed rate of 12 cents/kWh, which is slightly lower than the Texas average. Because it's a fixed-rate plan you assume that 12 cents is the rate you'll pay no matter what.

However, they didn't want you to notice that the rate of 12 cents is based on using a minimum of 2,000-kilowatt hours. In other words, you'll only pay 12 cents/kWh if you use at least 2,000-kilowatt hours of electricity. Here's how the plan is actually structured when you factor in the tiered rates.

As you can see, you'll only pay the low rate of 12 cents/kWh if you use enough electricity. If you use between 1,000 and 2,000-kilowatt hours, your rate jumps to 15 cents. If you use less than 1,000-kilowatt hours, your rate skyrockets to 20 cents.

Therefore, if you want to properly compare energy rates and save money, it's important to look at the Electricity Labels Fact Sheet attached to the plan to make an accurate comparison.

Hidden Fees

In addition to tiered rates, many electricity companies have fees in the fine print of their plans. These fees include things like delivery charges, minimum usage fees, overcharge fees, signup fees, restart fees, and more. You'll only notice these fees if you really dig into your plan and read the fine print, which they don't want you to do.

Your Monthly Usage

One of the most important things to consider when comparing energy rates is to compare them with your average monthly usage. As you saw in the section about tiered rates, your monthly usage will play a massive role in finding the right plan. Using that same example, let's say that you use an average of 1,500 kilowatt-hours of electricity per month.

If you sign up for the plan thinking you'll pay 12 cents/kWh no matter what, you're expecting your bill to be $180 a month. However, you're actually going to be paying $225 per month because your rate is 15 cents/kWh, and not 12. Therefore, knowing your average monthly usage will help you make the right choice.

What to Look at Besides the Listed Rates

In addition to the cost, here are a few other things to consider when you're comparing energy rates.

The Company Offering the Plan

The best plan in the world doesn't mean much when it comes from a company with a bad reputation. Here's where choosing your plan with ElectricityRates.com really comes in handy. We not only list the rates, terms and conditions, and details of various electricity plans, but we also list the company it's coming from and their Provider Score rating. According to experts and customers, seeing each of the company’s strengths and weaknesses helps you see the whole picture.

The Terms and Conditions of the Plan

The terms and conditions of the plan is where you'll find the tiered rates, hidden fees, rewards, perks, and everything else you need to know about your plan. It's also where you can find the Electricity Facts Label sheet and your rights as a customer.

The Type of Plan

Knowing what type of plan you're signing up for is also important. Each type of plan has different perks, benefits, and pricing structures. For example, if you want a fixed, steady rate where you know exactly what you're going to pay each month, you should look for a flat-rate plan. However, if you want the freedom and flexibility to change plans every month, you should look for a month-to-month plan.

If you want to maximize your savings and find a plan that meets all of your needs, you should Enter your ZIP Code in the free Rate Comparison Tool at the top of the page to find the best fixed-rate plan in Texas.