Loading...
Finding you the best energy plans
All Blogs

How to compare electricity plans

Posted on by Everything Energy 2 minutes

If you are new to Texas, the electricity market here may be puzzling. In deregulated areas of Texas, electricity customers shop for the right plan from a variety of providers in the market. This competitive market was designed to spur innovative electricity plans that help serve customers better.

For newcomers unfamiliar with shopping for electricity, choosing the right plan can be intimidating. We’ve put together this list of terms and details to help you select a plan and a provider with confidence.

How to pick the best electricity plan

Do you already have an electricity contract? Don’t switch electricity providers before confirming your current contract period. If your current plan is not yet up for renewal, you might be subject to a cancellation fee if you switch. Most electricity providers will not charge the cancellation if you are moving, but if you switch to another provider before your contract is complete, there will likely be a cancellation fee on your last bill. Call your electricity company or check your electricity bill to see if there’s a contract binding you to your current provider.

Head over to your account online or check your bill to determine the amount of electricity you consume every month. While your usage will likely be higher at certain times of the year, knowing your range of usage will help you select the best plan while you are shopping. While you are looking at your usage, get a feel for your monthly bill and how it varies at times of the year so you can compare options to what you have now. It’s worth saying that electricity prices rise and fall during the year due to market conditions. There’s no guarantee that rates when you are shopping will be in the same range as they were last time you signed up.

Texas electricity market has a huge variety of term durations that differ in price points. If you’re looking for stability in prices, long-term contracts will meet your needs. On the other hand, shorter durations don’t tie you to an extended commitment. The most common plan duration is 12 months, but those that don’t enjoy shopping for electricity often select longer plans, to lock in a price and push off having to shop again. As long as you are getting a rate you like, there’s no real downside to a longer term length. If you are renting a home, it can be handy to match the term length to your rental agreement.

Most plans in deregulated power market come at either fixed or variable rates. To learn more about these rate plans, you can

Fixed rates are sometimes called Secure or Term. These provide you with a fixed price for the length of your contract. They provide price security, but they usually have a cancellation fee if you switch away before the term is up. The cancellation fee is usually not applicable if you move.

Variable rate plans are sometimes called Flex plans or Month To Month plans. In this arrangement, there is no term length and you can switch providers anytime. However, your electricity rate can change each month. These plans don’t lock you into a commitment, so they are great for consumers that are in a short-term situation.

Most electricity providers have a wide range of plans. You may see plans with rewards or incentives – like cool technical gadgets or gift certificates or sports memorabilia. These plans may cost a little more, but you might find a great perk – like a signed football jersey. If these rewards appeal to you, Everything Energy has filters to help you find plans like this.

Compare electricity plans & providers

You can go to popular Retail Electricity Providers’ sites to shop individually. You can also check Texas’ state-run REPs’ directory and other relevant websites. Everything Energy makes it easy to shop across different REPs with a wide diversity of plan selections. We’ve got helpful filters to help you narrow down your search based on rate types and term lengths, so you can see only the plans you are interested in.

Where ever you choose to shop, look for these details:

Average Price per kWh: this is the all-in price you would pay at a given usage level – sites usually display 500, 1000, 2000. The price factors in the cost of the electricity, delivery charges from the utility company, and taxes and surcharges. Note that the taxes and surcharges can change over time.

Usage Level Selector: As noted above, most sites will display price at a couple usage levels – set it at the level closest to your usage to see pricing most relevant to your home.

Rate Type & Cancellation fee: Once you know which plan type you prefer, you can search and filter based on this information.

Go through the Electricity Facts Label (EFL)

EFL (similar to a Nutrition Facts Label) of each plan that your chosen provider offers allows you to ascertain your consumption’s price point. 

What’s the TDSP charge?

While REPs sell you the electricity for your usage, the delivery of power has always been the Transmission and Distribution Service Provider’s responsibility. They own and maintain the poles, wires, and meters. They’re also responsible for reading the meters.

The charges from these utilies are passed on to the consumer via their electricity bill, and are known as the TDSP charge. In Texas, the TDSPs have to get permission from the PUC to raise their rates. This does happen occasionally, and when it does, even customers on a contract will see a higher average price on their bill once the new TDSP charge is factored in. The TDSP charge is calculated into the Average Price per kWh.

These TDSP charges apply to all electricity customers in the ulitity area, regardless of which REP the customer is with. So you can’t get out of this fee by changing REPs. The TDSP will usually bill this charge to your REP, who will, in turn, indicate it on your bill without any markup. 

What if I Change my Mind after Signing Up?

You can ask your power provider to cancel your registration with them within three business days from when they delivered the Terms of Service agreement to you, whether you got the deal in the mail or signed it online. You’ll then receive a confirmation to cancel your plan (alongside the information on how to cancel) through the mail.

According to the state directives, your retail electricity provider should allow you between 3 to 14 days to cancel the plan without charging you any penalty. If you do so after this period has elapsed, you may pay the cancellation fee. 

Wrapping Up

You now have an idea on how to shop around for the best electricity plan. Head over to the Find Plans section to compare plans from the best electricity providers and make an informed choice.