If you’re moving to Texas — or just moving across town — one task surprises a lot of new residents: you may get to pick your own electricity company. In most of the state, electricity is sold on an open market, which means dozens of providers compete for your business. That’s great for choice, but it can feel overwhelming when you’re staring at a list of a hundred plans that all look nearly identical. This guide walks you through how to choose an electricity provider in Texas with confidence, so you can lock in a plan that fits your home and budget without second-guessing it later.
First, is your area even deregulated?
Texas has a “deregulated” electricity market in most — but not all — of the state. In deregulated areas, a company called a Transmission and Distribution Utility (TDU) still owns the poles and wires and physically delivers your power, but you choose a separate Retail Electric Provider (REP) for the actual electricity plan and billing.
Not every Texas city works this way. Several large metros are served by a single municipal utility or cooperative, and residents there can’t shop around:
- Austin is served by Austin Energy.
- San Antonio is served by CPS Energy.
- El Paso is served by El Paso Electric.
If you’re in one of those areas, you’ll simply set up service with the local utility — no shopping required. But if you’re in Houston, Dallas, Fort Worth, or most of the surrounding suburbs, you’re in a competitive market and the choice is yours. When in doubt, enter your ZIP code on the state’s official comparison site, Power to Choose (powertochoose.org), run by the Public Utility Commission of Texas. If plans appear, your area is deregulated.
Know the main plan types
The single biggest factor in choosing well is understanding how a plan charges you. Texas providers offer at least a dozen structures, but most fall into a few buckets:
Fixed-rate plans
You lock in a set price per kilowatt-hour (kWh) for the length of the contract — commonly 12, 24, or 36 months. Your rate won’t jump around with the market, which makes budgeting predictable. The trade-off is that leaving early usually triggers an early termination fee. For most households, a fixed-rate plan is the simplest, lowest-stress option.
Variable-rate plans
These have no long-term contract and no cancellation fee, but the price per kWh can change from month to month at the provider’s discretion. They’re flexible — handy if you’re renting short-term or unsure how long you’ll stay — but the rate can climb quickly, especially in high-demand summer months.
Indexed and time-of-use plans
Indexed plans tie your rate to a market formula, and time-of-use plans (including “free nights” or “free weekends” offers) charge different rates depending on when you use power. These can save money if your usage lines up with the cheap hours, but they reward careful attention. If you run laundry, dishwashers, and EV charging late at night, they’re worth a look; if not, the “free” hours may cost you elsewhere.
Prepaid and no-deposit plans
If you’re rebuilding credit or want to skip a deposit, prepaid plans let you pay as you go by loading money onto your account. They’re convenient but often carry a higher per-kWh rate, so read the fine print.
Green/renewable plans
Many plans source some or all of their electricity from wind, solar, or other renewables. The plan’s paperwork tells you exactly what percentage is renewable, so you can match a plan to your values without guessing.
Learn to read the Electricity Facts Label (EFL)
Every REP is required by the state to publish an Electricity Facts Label for each plan. Think of it like the nutrition label on a cereal box — it’s the one document that lets you compare plans apples-to-apples, and it’s where the real cost lives (not in the big advertised number).
When you open an EFL, focus on these parts:
- Average price at 500, 1,000, and 2,000 kWh. Providers must show the average price at three usage levels. This matters because many plans look cheap at exactly 1,000 kWh but cost much more if you use less. Estimate your typical monthly usage and read the number closest to it.
- Base charge and minimum-usage fees. Some plans add a flat monthly charge or penalize you for using too little. A low advertised rate can evaporate once these kick in.
- TDU delivery charges. These are the fees for delivering power to your home. They’re set by your local utility and are the same no matter which REP you pick, so don’t let a provider make them sound like a special discount.
- Contract length and early termination fee. Know how long you’re committing to and what it costs to leave early.
The advertised “average” rate assumes a specific usage level. If your household doesn’t match that assumption, your real bill will differ — sometimes a lot. The EFL is how you catch that before you sign.
A simple step-by-step approach
Here’s a practical order of operations for choosing your provider:
- Estimate your usage. If you can, ask the previous resident, seller, or landlord for average monthly kWh. No history? A small apartment might use 500–800 kWh a month, while a larger single-family home with summer air conditioning can run 1,500–2,000+ kWh.
- Compare on the official marketplace. Start at powertochoose.org for an unbiased, state-run list, then filter by plan type, contract length, and renewable percentage.
- Read the EFL for your top two or three plans. Check the average price at your usage level, not just the headline number.
- Match the term to your situation. Staying put for years? A longer fixed-rate contract can lock in stability. Not sure how long you’ll be there? A shorter term or month-to-month option keeps you flexible.
- Sign up a few days before move-in. Give yourself a small buffer so the lights are on when you arrive.
Electricity is just one piece of the move-in puzzle. For a full walkthrough of getting power, water, and gas connected in the right order, see our guide to setting up utilities. And if you’re bundling services, our internet and TV resource can help you avoid signing up for the same thing twice.
A few tips to avoid common regrets
- Don’t chase the lowest teaser rate. The cheapest number on the page often assumes a usage level you’ll never hit. Always confirm with the EFL.
- Watch for bill-credit plans. Some plans give a big credit only if you use over a certain amount (say, 1,000 kWh). Use one kWh less and you can lose the whole credit.
- Note your contract end date. When a fixed plan expires, you can roll onto a pricier month-to-month rate automatically. Set a reminder to re-shop.
- Keep your account number handy. You’ll need your ESI ID (a meter identifier) to switch or start service — it’s on your TDU bill or available from the utility.
Frequently asked questions
Can I choose my electricity provider anywhere in Texas?
No. About 85% of the state is deregulated, but cities like Austin, San Antonio, and El Paso are served by a single municipal or cooperative utility, so residents there can’t switch. Enter your ZIP code on powertochoose.org — if plans appear, your area is open to competition.
Is a fixed-rate or variable-rate plan better?
It depends on your priorities. Fixed-rate plans give you a predictable price for the contract term and protect you from summer spikes, which suits most households. Variable-rate plans offer flexibility with no cancellation fee but can rise month to month. If you value budgeting certainty, fixed is usually the safer bet.
How far in advance should I set up electricity before moving?
Aim to enroll a few business days before your move-in date. Same-day or next-day connection is often possible in deregulated areas, but a small buffer ensures your power is on the moment you walk in — and gives you time to fix any hiccups.
Why do all the plans list a delivery charge?
That’s the TDU (Transmission and Distribution Utility) fee for maintaining the poles, wires, and meter that bring power to your home. It’s set by your local utility and is identical across every retail provider in your area, so it’s not something you can shop around — but it is part of your total cost.
The bottom line
Choosing an electricity provider in Texas comes down to three habits: confirm your area is deregulated, understand which plan type fits how you actually use power, and read the Electricity Facts Label before you sign. Do those three things and you’ll skip the “why is my bill so high?” surprise that catches so many newcomers.
Want a stress-free move-in from day one? Grab our free New Home Move-In Checklist — it lays out utilities, internet, security, and everything else in the right order so nothing slips through the cracks.
Move Ready Pro is an educational resource and does not endorse any specific electricity provider. Always review the official Electricity Facts Label and compare plans on the state’s Power to Choose marketplace before enrolling.