How to Buy Electricity in Texas (Without Getting Screwed)
So imagine this: you just moved to Texas. Maybe you’re coming from another state, maybe even from overseas. In the process of moving or right after, you’re ready to activate your electricity, and that’s when you realize you need to pick a provider.
Wait, what? Back in Louisiana (or wherever you’re from) you probably only had one utility company. You never had to think about it. But in Texas? It’s different. You land here and it feels like everyone is trying to sell you electricity.
You open Google, type “Texas electricity plans,” and instantly you’re drowning. Comparison websites, energy companies, ads everywhere, each one promising the “lowest rate.”"
One site says: “Fixed Rate Plan for 9.9¢/kWh at 1,000 kWh.”
Another shows: “12.5¢/kWh fixed rate.”
Well, 9.9 is cheaper than 12.5, right? So you jump on it.
Then reality hits. First month’s bill arrives and you’re like: “No way. This can’t be right. I’m paying way too much for electricity!”
Here’s what happened: that 9.9¢ plan? It wasn’t what you thought. You signed up for a bill credit plan. Basically:
If you use just under 1,000 kWh (say 999), your rate jumps to 22¢/Kwh.
if you use 1500KWH , it is 13.8 ¢/Kwh.
If you use 2,000 kWh, it is 16 ¢/Kwh.
Only in the “sweet spot” around 1,000 do you actually get that shiny low price they advertised.
This kind of thing infuriate lot of Texans. You’re not alone.
So… Is Buying Electricity in Texas Difficult?
Yes and no. The good news is, you have choices. The bad news is, those choices can be confusing and expensive if you don’t read the fine print.
So here’s a little starter guide for anyone new to Texas, told straight up.
Step 1 – Decide When to Buy
For most people, this one’s easy. You just moved in, or your old contract is about to expire. You basically have two choices:
Stick with the same provider (they’ll happily keep you on, usually at a higher rate).
Shop around.
Tip #1: always assume you can find a better deal somewhere else. Energy companies here love to throw “new customer” deals at people, often better than what you’ll get just renewing. Even if you want to stay with your current provider, don’t be afraid to negotiate. But always, always check what’s on the open market first.
Step 2 – Where to Look?
This is the tricky part: too many options, too many websites, too many people telling you “this is the best deal.” So where do you even start?
Some folks ask their neighbors. Others spend hours on the internet, even asking ChatGPT. Most people end up on comparison sites, and, if they dig a little deeper, they’ll usually find the most transparent option (because it’s regulated by the state): www.powertochoose.org
On Power to Choose, companies post their offers, usually as “fixed-rate” plans. Most of the time, these rates are cheaper than what you’ll see on random company websites or third-party sites.
But in the last couple of years, companies have started listing plans that aren’t really fixed:
Free Nights & Weekends (sounds great until you see how high the daytime rates are).
Bill Credits (okay if you hit their magic number, expensive if you don’t).
It’s confusing, and honestly a little overwhelming.
That brings us to Tip #2:
Tip #2: Always, always read the Electricity Facts Label (EFL). That’s the official document that breaks down the real numbers, the fine print that shows what you’ll actually pay depending on your usage. And this is exactly where Clear Energy Facts comes in. We collect the majority of the plans in your area and label them clearly. We even introduced a new tag called “True Fixed Rate”. meaning the rate won’t swing wildly just because you used 999 kWh instead of 1000. With True Fixed, what you see is basically what you get.
Step 3 – Know Your Usage
Here’s a real-life scenario. Let’s say you live in an apartment. You’re out all day at work, you set the thermostat at 80°, come back home, set the thermostat at 70°, and keep it running overnight. On top of that, you’ve got an EV that you plug in every night. So you start thinking: “Maybe I should get one of those Free Nights plans, right? I mean, I’m home mostly at night anyway.” Sounds logical… but in most cases, it doesn’t work out the way you expect. A lot of times you actually end up paying more than if you had just gone with a plain True Fixed Rate plan. Why? Because companies raise the daytime rates to make up for those “free” hours.
That said, for certain lifestyles, free nights or weekends can be a good deal. The trick is knowing which camp you fall into.
So how do you really know? How do you compare a Free Nights plan against a True Fixed Rate?
Here comes Tip #3:
Tip #3: Check your actual usage data. Every Texan’s electricity usage is tracked by the utility and stored on a government site called Smart Meter Texas (SMT). You can give Clear Energy Facts permission to use that data, and our system will crunch the numbers for you.
And when I say crunch, I mean it: our algorithm looks at every single hour of your usage, every day, every month, across every plan. That way you see exactly what you would have paid, not just a “marketing rate.”
Here’s an example using my own data:
I compared a bunch of 24-month plans.
The four cheapest were all True Fixed Rate plans.
But surprisingly, the fifth cheapest ended up being a Free Nights plan, which means for my pattern, it almost worked out.
That’s the point: your best plan depends on your lifestyle and usage. Without checking the data, you’re basically guessing.
Now, let’s look at some numbers. All the charts and calculations below are available to any user who logs in to Clear Energy Facts and allows us to download their data from Smart Meter Texas.
Example: Best 24-Month Plan (September 2025)
Here’s the graph for the best offer among 24-month plans as of September 2025.
Figure 1 - True Fixed Plan
This is exactly the kind of plan you want: a True Fixed Plan. Notice how the line stays steady and predictable. For usage below 500 kWh the rate is a little higher, that’s normal, since every plan includes a base monthly delivery and energy charge.
At 1,500 kWh, the rate comes out around 14.4 ¢/kWh.
At 2,500 kWh, it drops slightly to about 14.1–13.8 ¢/kWh.
This is the pattern you should be looking for. No gimmicks, no big jumps, and no surprise bills, as long as you keep your consumption consistent.
Example: Bill Credit Plan
Here’s what its graph looks like:
Figure 2 - Bill Credit Plan
This is the best bill credit plan for my historical usage, and it still only ranked 30th place. Even then, it’s very tricky to calculate its real cost.
From the graph you can clearly see when the bill credit kicks in (at 2,000 kWh). If I chose this plan and the following month my consumption dropped below 2,000 kWh, my effective rate would jump to about 18 ¢/kWh, more than 20% higher than the True Fixed Plan. On a $400 bill, that’s a big difference.
Example: Free Hours Plan
The best Free Hours plan for my usage came in at 7th place. Having a tool to compare these kinds of plans is crucial, because Free Hours plans have so many variables:
Different base energy rates
Different hours that are actually “free”
Different rules for credits
It’s almost impossible for a regular user to compare a Free Hours plan from Company A against one from Company B by only checking the EFL. But with Clear Energy Facts, you don’t have to guess. We rank all plans against your actual usage, so you know exactly where each plan stands.
Here’s the graph for a Free Hours plan in CEF:
Figure 3 - Free hours plan - Ranked 7th.
You can also plot your usage distribution for every month. In my case, this Free Hours plan isn’t a bad choice. The average rate I would get with it is about 14.5 ¢/kWh, not that far from the True Fixed Plan.
However, not all Free Hours plans work this well. Some offer more “free” hours but make up for it with higher base rates. For example, the next graph shows a Free Hours plan that ranked 70th:
Figure 4 - Free hours plan - ranked 70th
You may get more “free” hours with some of these plans, but the gotcha is the base energy rate, in this example it was 30 ¢/kWh. That’s insanely high and pushed the average rate up to 16.7 ¢/kWh.
This is exactly why you need a tool to compare these kinds of plans. You don’t want surprises. Most of the time, the safest choice is still the True Fixed Plan.
In summary, buying electricity in Texas can be simple, but it can also be tricky. That’s why I built Clear Energy Facts: to make the process easier and more transparent.
On our site:
Plans are labeled correctly.
You can use your own Smart Meter Texas data.
We compare more than 90% of the offers available in Texas.
With Clear Energy Facts, you stay in control of your decision.
