How to find the cheapest electricity plan when moving to Texas
Texas electricity choice looks like a free market. In practice it’s a maze of usage tiers, bill credits, and base charges designed to make rate comparison nearly impossible. Here’s how to cut through it.
The Electricity Facts Label is the only thing that matters
Every Texas REP must publish an Electricity Facts Label (EFL) for every plan. The EFL shows the average price per kWh at 500, 1,000, and 2,000 kWh of monthly usage. That number — at your tier — is your real rate. Marketing pages quote whichever tier looks lowest.
Bill credits: the most common trap
A typical bill-credit plan looks like “6.9¢/kWh!” The fine print: $100 bill credit applied only when monthly usage falls between 1,000 and 1,999 kWh. Use 999 kWh? No credit. Effective rate jumps from 6.9¢ to 16.5¢. Use 2,001 kWh? No credit either. The plan is engineered for narrow-band consumers and punishes everyone else.
Base charges
Many plans add a $9.95 monthly base charge regardless of usage. On a 500 kWh apartment, that’s effectively 2¢/kWh added to your bill. Always add base charges into your effective-rate math.
Fixed vs. variable
Variable-rate plans expose you to wholesale market price spikes. The 2021 winter storm pushed wholesale rates to $9,000/MWh; some variable customers received bills in the thousands. Choose 12-month or 24-month fixed unless you actively trade energy markets and understand hedging.
Plan archetypes by usage tier
- Apartment, 500–800 kWh: flat-rate fixed, no bill credits, low base charge.
- Small house, 1,000–1,500 kWh: bill-credit plan engineered for the 1,000–1,999 band is often genuinely cheapest.
- Large house, 2,000+ kWh: tiered plans designed for high usage; check that the credit applies above 2,000 kWh.
- EV owner / shift-flexible: free-nights or time-of-use plan if you can move consumption to off-peak windows.
Frequently asked questions
What is the cheapest electricity plan in Texas?
It depends on your monthly usage. Bill-credit plans show the lowest advertised rate but only at exactly 1,000 or 2,000 kWh — outside that band, the effective rate jumps 30–50%. For most apartments (500–800 kWh), a flat-rate fixed plan with no bill credit is cheapest.
How do I read a Texas Electricity Facts Label (EFL)?
The EFL shows the average price per kWh at three usage points: 500, 1,000, and 2,000 kWh. Find the row matching your expected monthly usage. That's your real rate. Ignore the headline number — it's usually pegged to the most flattering tier.
Should I pick a fixed-rate or variable-rate electricity plan?
Fixed-rate beats variable in about 90% of historical periods. Variable plans expose you to wholesale market spikes — including Texas's 2021 winter storm event when some bills hit thousands of dollars. Choose 12-month or 24-month fixed unless you actively trade markets.
Are 'free nights' or 'free weekends' electricity plans worth it?
Only if you can meaningfully shift consumption to those windows — running dishwashers, charging EVs, or running pool pumps after 8 p.m. Otherwise the daytime rate is usually inflated to subsidize the 'free' hours, and you pay more overall.
Images via Wikimedia Commons (Austin skyline, CC BY-SA 4.0; Residential service entrance, CC BY-SA 4.0; Magic Calculator, CC BY 2.0).