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How to Choose a New Texas Electricity Provider

Learn how to choose a new Electricity Provider in Texas

As a Texas resident, you have the option of either staying with your current electricity provider or switching to a new one each time your contract is up for renewal. When most people look for a new provider, you want a good rate, but you also need to consider the type of plan - including whether or not you want renewable energy. And let's not forget the possible promotions and rewards programs!

If you're unclear about how to shop for a new Texas electricity company for your home, we want to help you understand the process.

Fixed-Rate Plans

You must first decide if you want a variable- or fixed-rate plan. With a fixed-rate plan, the rate you pay for electricity will remain the same throughout the term of your contract. The price can change only to reflect actual price changes that are allowed by Public Utility Commission rules due to changes in law or regulatory charges. A fixed-rate plan allows you to be certain of your price during your contract period and protects you for the duration of your contract against the possibility of rising energy prices, but if market prices fall you have to wait until your contract is over to switch to a lower rate.

If you think you might want to discontinue service after a short period of time, look for a company that does not have contracts or offers short-term contracts. Companies that have contract periods often have a minimum term, and if you cancel your service before the contract period ends, you might have to pay a penalty. It's also a good idea to find out what happens to your rate at the end of your contract period.

Variable-Rate Plans

Variable-rate plans are also known as "month-to-month" plans, as they don't have a minimum contract period and are based on current energy market conditions. With this kind of plan, the rate you pay can go up or down every bill, depending on the changes in the electricity market. This allows you to benefit from lower energy rates at certain times of year - if you switch at the right times.

However, just as this type of plan would allow you to take advantage of market prices falling, your rate will also increase if market prices rise. For some people, dealing with constant changing electricity rates can be stressful so a fixed-rate works best for them. On the other hand, there are others who like being able to always get the best rate and don't mind searching for it, making a variable rate plan their best option.

Green Energy Plans

If you're interested in encouraging the development of renewable energy sources, try a green energy plan! You can check the provider's Electricity Facts Label (EFL) to see if their plan produces electricity from renewable resources such as solar, hydroelectric, landfill gas, biomass, geothermal, or wind.

Understanding Your Electricity Facts Label

Your Electricity Facts Label (EFL) contains more than hust the electricity rate. An EFL allows you to easily compare what each company has to offer to find the best fit for your energy consumption and budget. Each label contains the following information:

  1. Electricity Price: This is made up of the electric company's average price per kilowatt-hour (kWh) for 500 kWh, 1000 kWh and 1500 kWh, as well as a possible monthly customer service charge and seasonal pricing. Pricing can differ depending on the number of kilowatt-hours so it's important to look at your past usage. With some companies the more kilowatt-hours you use, the lower the rate will be.
  2. Contract Terms: Some companies have minimum terms and will charge you an early cancellation fee.
  3. Power Generation Sources: The provider tells from what resources the electricity is produced (coal, natural gas, renewable energy, etc.) The provider's percentages will be graphed to compare them to the average usage for electricity generation statewide.
  4. Emissions: In this section companies provide details on the types and percentage of emissions they create per kWh of electricity generated. The provider's percentages will be graphed to show if the emissions are better or worse than the Texas average. This might be an important section for you if you're interested in decreasing your carbon footprint.

Picking the Right Electricity Company

What Are Other People Saying?

So what's the next step? Once you've decided if you want a fixed- or variable-rate plan, it's time to see what plans are offered by different companies. Check out Texas Electricity Ratings and Electricity Choice Texas to compare prices and ratings.

Simply enter your zip code and then pick the kind of plan you want. You will be able to see different electricity providers and their company rating, different plans offered, cancellation fee, if electricity is produced from renewable or non-renewable resources and the terms and rate for each plan. These websites will also show you promotions and incentives offered by each company and if they have a rewards program.

What's In It For Me?

Take a look at the possible incentives and rewards programs offered when selecting an energy provider. Some companies offer rewards programs to their customers such as cash back, gift cards, and more.

Another important thing to look at is the forms of payment the provider will accept. Some will only send you electronic bills and auto-draft your account. Others offer free online bill pay, let you pay by mail, in person or over the phone and allow you to use your bank account or credit card. Keep this in mind when you sign up with a provider to make sure the billing and payment options are convenient for you.

There are many electricity providers and plans out there and by doing some research you will be able to find one that is right for your electricity needs and your budget.

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