Electricity Prices in Texas

As in most other areas of the U.S., Texas electricity prices are erratic and unpredictable. It’s important that you stay on top of your electric provider and make sure that you’re getting the best rate possible. That’s difficult, however, with the business of life and all your obligations. If you’re short on time or simply want to find the best electricity prices possible, contact us at Energenie. We would love nothing more than to help you lower your monthly power bill and have an electricity plan you’re comfortable with. Let’s take a look at how electricity prices work in Texas.

Electricity prices in Texas are determined by three things. How much it costs to produce the electric, how much it costs your electric provider to procur it, and how much it costs to get the electricity to your home. Each of these responsibilities are controlled by three different entities, each one looking to make money off the other.

In short, electricity is created by power generator companies by burning coal, gas, and other forms of fuel. There are also some power generating companies that specialize in renewable sources of energy via wind, solar, and other renewable resources. These power generating companies then sell the electricity they create to Retail Electric Providers or REPs. They sell the electric to you, the customer.

However, there’s a third company that makes sure the electric gets from the REP to your home. These businesses are called Transmission & Distribution Utilities or TDUs. They control the electric meter on your house, as well as the power lines and poles that carry electricity throughout Texas. Together, the REPs, TDUs, and power generators all determine what the price of electricity will be, starting with the power generators.

Another thing that affects what your electricity price will be is the type of plan you choose. There are four basic types of plans to choose from: fixed-rate, variable-rate, prepaid, and indexed-rate. Each of these plans might charge you a different rate based on how they’re set up. Electricity prices are paid by cents/kWh, which is the price that you’ll likely see listed on the plan.

If you sign up for a plan that costs 10 cents/kWh and you use 1,000 kWh, your charge for that month is $100. However, that only applies if you have a fixed-rate account where the price per kWh doesn’t change. Let’s take a look at how the different plans are set up and whether or not they affect electricity prices.

A fixed-rate electricity plan is one where the rate that you pay per month doesn’t change for the term of agreement that you sign up for. If you sign up for 12 cents/kWh for one year, the rate will stay the same no matter what. At the end of the year, however, the rate could go up or down depending on the energy market.

Within that fixed-rate plan, there might be tiers or levels of different costs based on how much electricity you use. You might pay 10 cents for the first 500 kilowatt hours, 15 cents for the next 500, and 20 cents for anything after that. It’s important that you understand the ins and outs of your fixed rate electricity plan. Contact us if you’re stuck in a rotten contract and want to switch to something better.

Variable-rate electricity plans are the polar opposite of fixed-rate ones. The rate that you pay each month can change every single time and go up or down. However, the rate that your provider sets at the start of the month can’t change within the month. In other words, if you’re locked in at 10 cents at the start of the month, you’ll finish the month at 10 cents.

Indexed-rate electricity plans have variable rates that are based on a set market price, such as the price of gas or coal. Indexed-rate plans are similar to variable-rate plans in that your price will fluctuate from month to month. The major difference is in how the price is set each month.

Prepaid electricity plans are like prepaid phone plans. You pay your power company for a predetermined amount of electricity at the start of each month. If you don’t use up your allotment of electricity, most prepaid plans will allow you to carry it over to the next month. In most cases you can also purchase additional electricity if you go over your limit.

Prepaid plans are great for people on a budget who only have so much money to spend on electricity. They might save you money or cost you money depending on how much electricity you use and if you go over your allotment or not. Some companies charge extra for additional electricity.

The type of plan that you choose can either raise or lower your electricity prices based on the market. Fixed-rate plans might save you money if prices go up, but they can cost you money if prices go down.

Overall, Texas has the fifth highest electricity prices in the nation. This is due in large part to deregulation, which turned the electricity market in Texas into a competition. Deregulation allows different power companies to charge different rates, which you then have to choose from. If you’re struggling to find the right power company with the right plan, the next section is for you.

As of 2022, there are over 100 different power companies in Texas. Each of them have dozens of different plans to choose from with different electricity prices. If you’re struggling to narrow down your options and make a decision, Energenie is here to help. All you have to do is go to our website and enter your zip code. Energenie will handle the rest. We’ll compile a list of the companies that are serving your area and find your the one with the best electricity prices.

EnerGenie is your personal electricity shopping assistant. By signing up with EnerGenie, you’ll have peace of mind knowing you have a cheap electricity rate locked in to avoid rate hikes. You’ll also never have to worry about falling onto a high variable electricity rate because we continuously monitor your account and the market to sign you up for another great rate when your contract is coming up for renewal.