Smart Electricity Shopping

Knowledge is power! Master the Texas Energy Market and avoid overpaying for electricity!

Did you know Texans can potentially save hundreds of dollars each year by choosing the right electricity plan?

Knowledge is power, especially when it comes to saving money on your monthly electricity bill. Texas Electricity Finder is here to help you become a savvy shopper and avoid the pitfalls of confusing Texas electricity plans. On this page, we’ve gathered our most insightful tips to ensure you choose the perfect plan for your needs and avoid overpaying for electricity.

Insider Tips When Shopping for Electricity Plans

Mastering the art of choosing the perfect electricity plan starts with Smart Electricity Shopping! Here are our insider tips to empower you to find the best plan for your needs and avoid costly mistakes.

1. Know your usage!

First and foremost, when shopping for electricity plans, you need to know how much electricity you use. You don’t need to know exactly how much you use, but you should have a pretty good idea of how much electricity you use.

When shopping for an electricity plan and you come across one with a really low price, in almost all cases, that low price requires special conditions for you to receive it. And nearly all those special conditions are based on how much electricity you use. The two most common plans with these special conditions are Bill Credits and Time of Use plans—more on those in a bit.

While Bill Credit and Time of Use plans can lead to substantial savings, they are tailored for customers with specific usage patterns. Understanding how much electricity you use is the key to unlocking these savings.

Monthly energy usage over a year period.

How to Determine How Much Electricity You Use

As mentioned earlier, you don’t need to know your exact usage to determine if an electricity plan is right for you. However, knowing how much electricity you used during your lowest and highest usage months is a great start.

An easy way to do this is to check your electric bills for March and September. Look for a section labeled “kWh Usage” or something along those lines. That number represents how much electricity you used during that billing cycle. The usage of those two months will give you a good idea of your low and high electricity usage for the year.

• March Bill: Reflects February usage, often the lowest of the year.
• September Bill: Reflects August usage, typically the highest of the year.

These two values will give you a good idea of your usage range, which is helpful when shopping for electricity and determining if a plan is right for you.

In the sample above, the March bill was for 981 kWh, and the September bill was for 4132 kWh. So this customer’s usage range was roughly 1000 to 4000 kWh, a difference of 3000 kWh.

2. Check ALL Advertised Prices

Every electricity plan includes three advertised prices based on usage levels: 500, 1000, and 2000 kWh. These prices reflect the average cost per kilowatt hour (kWh) you’d pay at those exact usage amounts. Reviewing all three advertised prices is a quick and effective way to identify whether a plan is simple or comes with special conditions or modifiers.

Many consumers are drawn to plans with low advertised rates, often overlooking potential hidden costs. The key issue is that the low advertised price typically only applies to one specific usage level. If your actual usage is higher or lower, your electricity costs can increase significantly.

For simple plans without special conditions, the advertised price will gradually decrease as usage levels increase, meaning the prices remain relatively consistent across all usage levels. However, with complex plans, the advertised prices tend to fluctuate significantly.

Plans with gimmicks or special conditions are designed to create an artificially low advertised rate at a particular usage level to rank higher on comparison sites. This makes it crucial to review all three advertised prices to fully understand what you’ll pay as your usage varies.

In most cases, simple, straightforward plans end up being the most cost-effective choice over time.

Examples of Different Advertised Price Patterns

Bill Credit Plan

Notice the really low price at one specific usage level (1000 kWh), while the other two are significantly higher. Advertised Prices fluctuate the most with Bill Credit Plans.

Time-of-Use Plan

Advertised Prices reduce drastically as the usage increases. The rate of change should be closer to 0.1¢, not 1.5¢.

Note: Time-of-use plans typically assume 35-40% of usage will be at the discounted rate. We’ve found that 25-30% is more accurate.

Simple Plan

Advertised Prices gradually reduce as the usage increases. The standard rate of increase for a simple plan is 0.1 to 0.2¢.

3. Know and Understand What the Provider is Charging

In our Electricity Plan Pricing Guide, we explain that your electricity bill covers two distinct services: purchasing electricity and having it delivered to your home. First, you’re buying electricity from the provider. Second, you’re paying a utility company, known as a Transmission and Distribution Utility (TDU), to deliver that electricity.

What is essential to know and pay attention to is what the provider is charging. The provider’s charges is what will be different on each plan. All plans will include an “Energy Charge” which is the retail price you’re paying for each kWh of electricity you use. Some plans will have a “Base Charge” which is a flat/fixed fee the provider charges each month.

The Provider's Role

Electricity providers purchase electricity from the wholesale market and resell it directly to consumers. They manage your account, track your usage, generate your monthly bill, and handle all payment transactions.

The TDU's Role

TDUs maintain the power lines, transformers, and other infrastructure needed to deliver and maintain electricity in your area. They are also responsible for restoring power during outages and ensuring the physical delivery of electricity.

Why This Matters

TDU costs are standardized and remain the same for everyone in your area, regardless of the electricity provider or plan you choose. While it’s important to know these charges to estimate your monthly bill accurately, TDU costs should not influence your decision when selecting an electricity plan—they are consistent across all options.

Instead, your focus should be on what the provider is charging. Provider charges vary between plans, and this is where you’ll find the biggest differences.

Understanding these components is essential when comparing plans. Knowing what the provider charges will help you find the best plan for your needs while avoiding hidden fees and unexpected costs.

Provider's Charges

In the details section of our plan cards, we break out the charges so you can see the Provider’s charges versus the TDU charges, the prices you pay per kWh, and the monthly Fixed Fees.

Energy Charge: This is the price you’re paying for electricity from the provider. It’s the retail price, specific to that plan, for each kilowatt hour (kWh) of electricity used.
Base Charge: Some plans include a fixed monthly fee regardless of how much electricity you use (typically between $0 and $10).

Note: All plans include an Energy Charge, but not all plans include a Base Charge.

Don’t Be Misled by the Advertised Price!
The advertised prices include all applicable discounts and credits. Providers assume those discounts and credits will apply to you, so they reflect them in the advertised price, which makes the prices appear low. To understand the actual cost of your electricity, focus on the provider’s energy charge—this is the exact price per kWh before any adjustments. Then, determine if any applicable discounts and credits would apply to you.

Pro Tip:
A $10 base charge adds approximately 1¢ per kWh to the plan price. For example, a 13¢ per kWh plan with a $10 base charge is roughly equivalent to a 14¢ per kWh plan with no base charge at 1000 kWh usage.

Key Takeaway:
Understanding provider charges equips you to compare electricity plans accurately and make an informed decision that helps you save the most money.

For straightforward, no-gimmick plans, we recommended finding the plan with the lowest Provider’s Energy Charge and Provider’s Base Charge

4. Look Out for Plan Modifiers or Special Conditions

Understanding and spotting plans with modifiers or conditions like bill credit and time-of-use plans is crucial for smart shopping. While these plans can offer significant savings, they might not be suitable for everyone. Here, we’ll cover two of the most common plans with these modifiers.

Bill Credit Plans

Bill Credit plans are the most common conditional plans you’ll find. They are on almost every comparison site because they have a very low advertised price. Refer to #2 on our insider tips, and you’ll notice that the very low price is only one of the usage tiers for Bill Credit plans.

These plans work by rewarding you with a credit on your bill if you use a specific amount of electricity per month. However, there’s a catch!

There are two components to a Bill Credit plan: Trigger Amount and Credit Amount.
Trigger Amount – This is the specific amount of electricity (measured in kWh) you must use to qualify for the credit. Common trigger amounts align with advertised usage tiers, typically 500, 1000, or 2000 kWh.
Credit Amount – This amount will be credited to your electricity bill if your usage meets or exceeds the trigger amount.

The biggest issue with a Bill Credit plan is its strict usage range. To benefit from the bill credit, your electricity usage must consistently fall within a narrow range—typically within the trigger amount and +400-500 kWh. Falling outside that range will result in overpaying compared to a straightforward, no-gimmick plan. That’s why “Know Your Usage” is our #1 tip for shopping for electricity.

Example: Let’s say a plan offers a $50 credit for using 1,000 kWh. If your usage consistently falls between 1000 and 1,400 kWh, you’ll benefit from the credit. However, every month your usage is below 1000 kWh or above 1,400 kWh, you’ll either miss out on the credit or pay a higher per-kWh rate than a simple non-bill credit plan.

Time-of-Use Plans

Time-of-use (TOU) plans are the second most common type of conditional electricity plan and are rapidly gaining popularity. As customers increasingly move away from Bill Credit plans, providers are shifting their focus toward offering more Time-of-Use options.

These plans offer discounted rates during off-peak hours (typically late nights and weekends). They work best if you can shift your high-usage activities (laundry, dishwashing) to these times.

Time-of-Use (TOU) plans present two main challenges: the amount of electricity providers assume is used during the discounted rate period, and the complexity of verifying your electric bill reflects the correct usage at the correct rates.

For Time-of-Use plans, you must look at the assumed usage during discounted rate time, which is found in the electricity facts label. Providers calculate the advertised price based on the assumption that 35-40% of your electricity usage will occur during discounted rate periods. However, in practice, most customers only achieve 25-30% usage during these times unless they significantly adjust their habits.

If your usage patterns don’t align with these assumptions, you could end up paying more than expected. Lifestyle Impact: To truly benefit, you might need to adjust your daily routine to take advantage of off-peak hours.

Another issue is the complexity of confirming that your bill is calculated correctly. Most electric bills only show your total electricity usage (in kWh) for the billing cycle, without breaking it down by the minute or by time period. To verify how much electricity you used during discounted periods, you’d need to access itemized usage data from a third-party service like Smart Meter Texas.

Without this level of transparency, you’re essentially left to trust that your provider calculated your bill correctly—making it difficult to ensure you’re receiving the advertised savings.

Key Takeaway:
Don’t be lured by flashy advertised prices! Plan modifiers can be beneficial, but only if they align with your usage patterns. Choose a plan that offers a consistent rate that fits your needs!

5. Check the Term Length, More Importantly, When it Expires

Selecting the right plan term length is essential to avoid unexpected surprises. Providers are increasingly using creative term lengths as a strategy to rank higher on platforms like Power To Choose. By offering unconventional term lengths, they can advertise lower prices while sidestepping peak seasons. Here’s what you need to know:

Term Length and Pricing: Electricity prices can vary significantly throughout the year. Short-term plans with attractive rates might expire during peak seasons, potentially leading to higher prices when it’s time to renew. On the other hand, long-term plans provide price stability but may prevent you from benefiting from market price drops.

Finding the Balance: The best term length depends on your personal needs and risk tolerance. Short-term plans are ideal for temporary situations, while long-term plans provide predictability. For most users, we recommend choosing a term length between 12 and 24 months for a good balance of stability and flexibility.

Pro Tip: Our plan cards prominently display the term length and expiration month so you can plan ahead and make informed decisions about when to renew!

Texans can save up to

$500 per year

by switching to a new electricity plan

explore affordable plans in your area

Know Your Rights as a Customer

Understanding your rights as an electricity customer is crucial for making informed decisions and resolving any issues that may arise.

The Public Utility Commission of Texas (PUCT) provides valuable resources to empower you:

Dispute Resolution: Learn what steps to take if you have a disagreement with your electricity provider.
Service Rules: Understand the reasons why service may be refused or disconnected, and your rights in such situations.

Knowing your rights allows you to take control and ensure fair treatment by your electricity provider.

For in-depth information on specific rights, visit the PUCT website:

If an issue cannot be resolved with your electricity provider, it’s recommended that you file a complaint with the Public Utility Commission of Texas (PUCT), which can be done here.

Understanding Charges on your Electric Bill

Ever wonder where all those charges on your electric bill come from? Understanding your bill is crucial for managing your energy costs. This section will break down the different charges and empower you to make informed choices.

Below we’ve included a helpful guide from the Public Utility Commission of Texas (PUCT) along with a sample bill explanation to make understanding your bill a breeze!

The Public Utility Commission of Texas (PUCT) is a great resource for information regarding charges on your electric bill, but here we want to cover some of the most common items found on your electric bill.

Here are some of the charges we cover extensively on Texas Electricity Finder:

- Base Charge – A flat fee applied each month regardless of the amount of kilowatt (kWh) used.
- Energy Charge – A charge based on the electric energy (kWh) consumed.
- TDU Delivery Charges – Charge to cover the cost of moving electricity from the generation plant to your home, also known as “TDU Pass-Through Charges”

Here are other common charges you may see:

- Demand Charge – A charge based on the rate at which electric energy is delivered to or by a system at a given instant, or averaged over a designed period, during the billing cycle.
- Changes in Rates – Any change in the customer’s rates or charges due to the variable rate feature of the Terms of Service contract.
- • City Sales Tax – Sales tax collected by authorized taxing authorities, such as the state, cities, and special purpose districts.
- PUC Assessment – A fee assessed to recover the statutory fee for administering the Public Utility Regulatory Act.
- Miscellaneous Gross Receipts Tax Reimbursement – A fee assessed to recover he miscellaneous gross receipts tax imposed on retail electric providers operating in an incorporated city or town having a population of more than 1000.

For a complete list, visit the PUCT website.

Other Helpful Tools

We’ve created some help pages to help you become a smart electricity shopper. Our goal is for you to avoid bad plays and overpaying for electricity. Many plans available today are confusing, and if you don’t know what to look for, you could end up in a bad situation.

Electricity Plan Pricing Guide – Shopping for a new electricity plan can be confusing, but it doesn’t have to be. Here, we’ll explain how electricity plan pricing works in simple and easy-to-understand terms. Knowing how electricity plan pricing works will give you an edge and newfound confidence when shopping for a new electricity plan.
Plan Cards – No more surprises on your electric bill! Our plan cards are designed to help you make informed decisions and find the perfect plan for your needs.
Electricity Facts Label – Dive into the Electricity Facts Label. Where we cover what they are, how to read them, and how to use them to your advantage.
Utility Suppliers (TDU) – Your local utility supplier plays a key role in keeping the lights on. Learn more and find your Utility Supplier.

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