Frequently Asked Energy Questions About Deregulation

Texas deregulated energy questions

What is deregulated electricity?

Deregulated electricity means consumers can choose which electric company to purchase energy from, rather than receiving a default energy plan from their local utility. In Texas’ deregulated energy market, residents and businesses can compare plans and providers from a wide range of options and select their preferred choice.

What is an electricity provider?

A retail electricity provider (REP) sells energy to customers in deregulated areas. In many regulated states, residents can only buy energy from the local utility company. But in Texas, residents can choose their REP from a variety of available companies. Your provider sends your monthly energy bill, manages your electric account, and handles customer service questions about your plan.

What’s the difference between an energy provider and a utility company?

Energy providers sell electricity to consumers and manage their energy plan and account. Utility companies deliver electricity to homes and businesses in their service area and maintain the local electric infrastructure. In Texas’ deregulated market, consumers can choose their provider, but not their utility company.

How does the power grid work?

Texas has a standalone power grid that operates independently from the rest of the country. The power grid is composed of power plants, transmission lines, and distribution systems that work together to move electricity across the state. The Electric Reliability Council of Texas (ERCOT) manages the power grid to ensure it operates smoothly.

What is an Electricity Facts Label (EFL)?

An Electricity Facts Label (EFL) is an important document that outlines details about your energy plan. In an EFL, you’ll find your electricity rate, contract length, delivery charges, cancellation fees, provider contact information, and more. You can review the EFL for every plan on our marketplace by clicking “more details” and “plan documents.”

Shopping for electricity

How much does electricity cost?

Electricity rates fluctuate based on location, time of year, the size of your home, and energy demand. In 2025, the average residential electricity rate in Texas was 15.47 cents per kilowatt-hour (kWh), according to the Energy Information Administration. Enter your ZIP code to explore current Texas electricity rates in your area.

Why do electricity rates fluctuate?

Electricity rates fluctuate for several reasons, with seasonal demand changes being a major factor. The time of year can affect energy prices because extreme weather forces consumers to use more electricity, increasing overall demand. The power grid works harder to meet the demand, which can elevate prices.

How do I compare electricity rates?

You can easily compare energy rates on Choose Texas Power’s independent marketplace. Our plan comparison tool is free to use, letting you weigh your options and sign up in one place. Explore competitive prices from a variety of Texas energy providers in your area. Enter your ZIP code on our site or call our experts to start shopping.

Can I choose an energy provider for my business?

Yes, businesses also have the freedom to choose their energy provider in Texas. If you are interested in finding a reliable commercial electricity plan, use our commercial energy guide to get in touch with a Choose Texas Power team member.

Will I have to pay a deposit when I sign up for an energy plan?

Many Texas energy providers require you to pay a deposit to begin service if you do not meet their credit requirements. Each REP has different deposit requirements for its customers. If you want to avoid paying an upfront deposit, some providers offer no-deposit energy plans, such as prepaid electricity.

Energy plans

What are green energy plans?

Green energy plans account for 100% green electricity from renewable sources with the least environmental impact, like solar power and wind energy. Although you’re not directly using renewable power, your green energy provider purchases renewable energy credits (RECs) to ensure the exact amount of green energy you use is added to the power grid.

What is the difference between a fixed-rate and variable-rate plan?

With a fixed-rate plan, customers can lock in a stable energy rate for a specified contract length, typically one to three years. These plans protect you from price spikes if energy demand rises. While your rate remains the same during your contract, your energy usage will still affect your monthly bill. Fixed-rate plans typically charge an early termination fee (ETF) if you cancel your contract early.

A variable-rate plan offers less protection from price changes but allows more flexibility. Your electricity rate changes monthly with the wholesale cost of energy. Rates often dip when demand is low and rise as demand increases. Variable-rate plans don’t require a contract, so you can switch to another plan at any time without paying an ETF.

How do bill credit plans work?

Bill credit plans offer you a monthly discount on your bill if you reach a usage minimum. For example, you may receive a $100 monthly bill credit if you use more than 1,000 kWh. These plans can be a great way to save money, but only if you meet the usage minimum every month. Otherwise, your bill may skyrocket if you slip back into a lower usage tier with a higher rate.

Are certain energy plans better for apartments?

Yes, some energy plans are better suited for apartments. Since apartment dwellers typically have lower energy usage, you’ll want to find a plan that offers a good price for 500 to 1,000 kWh monthly usage. Review our guide on the best energy companies for apartments to begin your search. You can also filter by home size on our marketplace when comparing plans.

Does my energy plan contract length matter?

Your energy plan length is important because it determines how long you are committed to your rate. Our experts recommend that renters match their contract with their lease to avoid overpaying. Homeowners can spring for a longer contract if they plan to live in their current home for multiple years. If you cancel your contract early, you’ll likely have to pay an early termination fee (ETF), which can be costly. That’s why it’s important to make sure you can commit to your plan’s time frame.

Choosing an energy provider

How do I choose an electric company?

There are many factors to consider when choosing an energy provider, including the contract length, rate type, energy price, renewable content, bill credits, and more. For more information on the shopping process, explore our guide to choosing a provider.

What is the best energy provider in Texas?

TXU Energy, 4Change Energy, Express Energy, and Veteran Energy have received the highest ratings from our marketplace experts. We based this analysis on customer service, plan variety, and online accessibility. However, the best energy provider varies for each shopper depending on their budget, energy needs, and preferences.

Which energy provider has the cheapest electricity rate?

Electricity prices vary by location and can change daily. The best way to compare current energy rates in your area is to enter your ZIP code on Choose Texas Power. We’ll show you a list of current energy prices near you, starting with the cheapest rates.

Switching energy providers

Can I switch to a different energy provider?

Yes, you can switch energy providers in Texas. If you are currently enrolled in a fixed-rate plan, you may need to pay an early termination fee (ETF). Before switching, check your EFL to confirm whether your provider will penalize you.

How do I switch providers?

Once you’ve checked your contract for early termination fees, switching providers is simple. Enter your ZIP code on our marketplace, and we’ll show you electric rates and energy companies in your area. Once you are satisfied with your choice, you can sign up online or call us to set up your plan. A confirmation email will be waiting in your inbox, and your work is done. Your new provider will handle switching your service with no interruption to your power.

Texas utility companies

How do I know who my utility company is?

The easiest way to find your utility company is to review your past energy bills, as it will be listed there. But if you moved to a new home and don’t have past bills, you can call Choose Texas Power to help determine which utility is assigned to your area. Your energy provider should also be able to help answer this question.

What are the main utility companies in Texas?

There are five main utility companies serving deregulated cities across Texas: AEP Texas Central, AEP Texas North, CenterPoint Energy, Oncor Electric Delivery, and Texas-New Mexico Power.

Who do I contact during a power outage?

If you experience a power outage, report it to your utility company. Your electricity provider cannot assist you because the utility is in charge of delivering your power and repairing damaged power lines or poles.

Why does my utility charge a monthly fee?

Every utility company charges a fee to deliver electricity to homes and businesses. This fee is regulated by the Public Utility Commission of Texas (PUCT) and cannot be changed. Everyone in your service area pays the same fee for delivery, which is usually listed on your bill as a transmission and distribution utility (TDU) charge.

Can I choose my utility company?

You cannot choose which utility serves your home because it’s assigned based on location.

About Choose Texas Power

What is Choose Texas Power?

Choose Texas Power is an independent energy marketplace created to help Texans understand their options and find affordable electricity. We believe that shopping for energy shouldn’t be complicated, which is why we make it easy for you to compare your options and enroll in a plan, all in one place. Our marketplace is backed by energy experts who can help you navigate your options and make a confident choice. We also craft educational resources that explain Texas’ electricity market, different types of energy plans, popular providers, and more. Check out our energy resource page for a full list of guides.

How does Choose Texas Power work?

Start by entering your ZIP code on our marketplace to review providers and plans in your area with the latest rates. You can filter by price, contract length, plan features, or provider ratings to find plans that fit your preferences. Once you find the right plan, you can enroll in minutes online or over the phone with an agent.