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Light Companies in Texas and How to Choose One

Updated: 02/27/2023

Finding the right light company to fit your needs can mean spending time on the phone or the internet to nail down the best electricity company and rate in Texas. Between the hustle and bustle of work, life, family, or anything else, your free time is precious and limited.

However, can easily help. Simply enter your ZIP Code into our free rate comparison tool at the top of the page. Using our comparison tool, you can quickly and easily decide which electricity company and plan is right for you. We lay out all the information about each plan in a way that’s easy to read and understand but leave the ultimate choice up to you.

What are Light Companies in Texas?

Depending on where you’re from, you probably think of stores that sell lights when you hear “light companies.” In Texas, however, light companies are just another name for electricity companies known as retail electric providers (REPs.) REPs are privately owned businesses that purchase electricity from power-generating plants at wholesale cost and sell it to residential and commercial customers at retail price.

There are over 130 retail electric providers in Texas, offering thousands of plans between them. However, not all of these companies and their plans are available in all parts of Texas. Depending on where you live, you may have access to thousands of plans or just dozens of plans.

Either way, choosing the right plan from the right company is essential if you hope to save money on your electricity bills.

How Does Deregulated Electricity Work?

There are so many light companies in Texas because of deregulation, which happened in Texas in 2002. Before deregulation, only a handful of electricity companies were either government-owned or had their prices regulated by the government.

Homes and businesses in Texas also didn’t have the freedom to choose their own electricity company prior to deregulation. You simply had to sign up with whichever company operated in your area.

After deregulation, however, all government restrictions on electricity prices were removed, and energy became privatized. As a result, anyone with the means and the desire could start their own REP, and begin buying and selling electricity. Because there aren’t any government restrictions, REPs can price electricity at whatever rate they desire and structure their plans however they please.

In addition to the business world, deregulation also profoundly impacted individuals in Texas. No longer were people forced to enroll with whichever electricity company operated in their area. Now, Texas customers have the power to choose whichever electricity company they prefer. While the power to choose gave Texas residents more freedom and flexibility, it also made their lives more difficult.

How do Electric Companies in Texas Structure Their Rates?

The reason that the power to choose isn’t all good is because of the headache it causes. Before deregulation, people may not have loved their electricity plan, but it was usually with a decent company and offered a decent rate. Since deregulation removed a bunch of restrictions, it gave electric companies the ability to structure their plans however they pleased, which often led to people getting tricked into choosing the wrong plan.

How Electric Plans are Structured in Texas

Here’s an example of how electric companies structure their electricity rates in Texas.

Grand Electric Energy Company advertises its newest fixed-rate electricity plan online for 13 cents/kWh for 24 months. At 13 cents/kWh, this plan is slightly cheaper than the Texas average. However, what you may not see if you’re not looking closely is that their fixed rate of 13 cents is based on using a minimum of 1,000 kilowatt-hours.

What you don’t see in the fine print is that when you use less than 1,000 kilowatt-hours, your electricity rate skyrockets to 25 cents/kWh. It also states that when you use more than 2,000 kilowatt-hours, your rate jumps to 20 cents/kWh. Therefore, you only pay 13 cents/kWh if you use between 1,000 and 2,000 kilowatt-hours of electricity.

This shouldn’t be a problem if you have a small family of two or three people. However, if you live alone or have a large family, your usage will likely fall outside of the 1,000 to 2,000 window, and you’ll end up overspending on electricity. Therefore, it’s essential to understand your energy usage and read the fine print of electricity plans before enrolling in one. With the plan in the example above, you would get locked into a 2-year contract with a hefty early termination fee.

Who is the Best Electricity Company in Texas?

Because of the many different electricity companies and plans in Texas, it’s tough to say who the best is. The best electricity company for your neighbor or coworker might not be the best electricity company for you. It all depends on the structure of the plan they’re offering and what their rates are.

If you simply don’t want to take the time to choose the right electricity company for you, here are some of the most popular.

To help guide your options for selecting an electricity provider check out our Best Texas Electricity Providers report to see how providers stack up against one another.

How to Choose the Right Electricity Company for Your Needs

When it comes to choosing the right electricity company for your needs, is here to help. Unlike other online comparison tools, we don't pick the company for you. We believe that you know what your needs are better than anyone, so we simply want to provide you with all the details you need to make an informed decision. Here's how the process works.

  • Our intuitive search engine shops for the best rates based on your exact home address, location, home size and actual usage.
  • A list of all the electricity companies in your area will pop up, giving you a personalized list of plans tailored to your home.
  • You can go through the list of plans and check things such as the listed rate, the tiered rates based on usage, your estimated bill, the REPs reputation, hidden fees, perks and benefits, and anything else you need to know pertaining to the plan.
  • Once you find the plan you like, you can select it and enroll immediately.
  • There won't be any service interruptions while we switch you from your old plan to the new one.

With just a few clicks, you can compare options from leading providers and easily sign up for your electricity contract to start saving money on your electricity bill today. Houston, TX Location

  • Address: 4201 Main St Suite 200, Houston, TX 77002
  • Phone: (832) 476-8721