Texas Energy Shopping Red Flags

Understanding energy shopping red flags

Shopping for electricity in Texas often involves hours of sorting through dozens of providers, plans, and documents. While energy deregulation affords you more choices, you also run the risk of overlooking a red flag. Unfortunately, many Texans have found themselves trapped in expensive energy plans or dealing with bad customer service because they missed the warning signs. The good news is that Choose Texas Power can help you spot the most common red flags so you can avoid a bad experience.

Offers that seem too good to be true

If a plan’s price or offer seems too good to be true, there’s probably a catch. Plans that claim free electricity, suspiciously low rates, or other unusual promotions are normally better on paper than in reality. Typically, these plans make up for the “free” or discounted electricity with high rates.

Instead, prioritize plans with affordable pricing and reasonable contract terms. Straightforward fixed-rate plans typically lead to the most affordable energy bills. Always read the Electricity Facts Label (EFL) to review a plan’s details and catch any gimmicky policies.

Large price swings between usage tiers

Watch out for energy plans with significant price gaps between usage levels. Many Texans pick a plan based on the advertised price, without realizing that they don’t qualify for that usage tier during most of the year and will actually pay a much higher rate for a different usage level. This often occurs with bill credit plans. Review the price for all usage tiers before you enroll in a plan. And most importantly, examine a handful of your past energy bills during various seasons to figure out which tier you typically land in.

Consistently negative reviews from customers

If a provider has a large number of negative reviews from customers with similar experiences, it could be a red flag. While online reviews can sometimes be skewed, recurring themes on Google reviews or Trustpilot may indicate the importance of considering provider reputations.

Choose Texas Power always encourages our shoppers to consult online provider reviews from real customers. This can help you learn about other Texans’ experiences and inform your decision when choosing an energy company. We also rate the companies featured on our marketplace, which you can find next to or below the provider name on each plan on our site.

Note: Keep in mind that personal experiences can vary drastically between customers. One customer may have left a negative review because the plan they chose was a poor fit for their usage and led to high bills. Additionally, a long-standing provider may have more negative reviews because it’s been in business longer than a newer company.

High monthly base charge

A high monthly base charge can be a cause for concern if you have low energy usage (below 1,000 kWh). A $10 monthly base charge raises the average price for a customer who uses 500 kWh versus 1,500 kWh because the fee is spread across fewer kWh. Search for a plan with little to no monthly base charge for more stable energy costs.

High early termination fees

A high early termination fee (ETF) could be a red flag if you can’t commit to the contract. The majority of Texas electricity plans include an ETF, which typically ranges from $100 to $300, depending on your contract length. Watch out for a high ETF if you suspect you can’t stick with the full contract. For example, a 36-month plan may have a low rate, but it might not be worth it if you cancel early and have to pay a high ETF.

Exception to the rule: Texas providers will waive your ETF if you move outside of their service area. In this scenario, simply show proof of your move to your provider, and they’ll waive the fee.

Variable-rate plans during a high-demand season

Variable-rate plans are not necessarily a red flag themselves, but choosing one without understanding the risks could land you in a tricky situation. Variable-rate plans have no contract, and the price shifts month-to-month. The upside is that you can switch plans at any time without penalty. The downside is that variable-rate plans can become very expensive during times of high electricity demand, such as the summer.

Carefully consider the pros and cons of a variable-rate plan before enrolling. It can be a great short-term solution for customers in a time crunch, but it can be costly if you’re not careful.

Consult a Choose Texas Power energy agent

While you have the power to choose your own energy provider and plan in Texas, you don’t have to navigate that decision alone. Choose Texas Power is dedicated to helping consumers understand their options and secure reliable electricity. If you want expert guidance to avoid red flags and find the best option, call the number on your screen to connect with our team.