Editorial note: Homefront (defined in the Disclosure below) may earn a commission from affiliate partner links featured on our site. This commission does not influence our editors’ opinions or evaluations.
Carter Gaddis is a senior writer at USA TODAY Homefront. He is an experienced journalist who has written about roofing, sunrooms, title insurance and other home service topics. Carter has contributed to the TODAY SHOW parenting section, CBS SPORTS and ESPN, among other publications. He lives with his family in Central Florida, where he spends most weekends at theme parks or watching English soccer on TV.
Dan Simms is a contributing writer at USA TODAY Homefront specializing in home repair, renovation and renewable energy. While working as a property manager for one of the largest real estate management firms in New York, Dan worked alongside contractors and renovation specialists to prepare homes for sale. He is an avid DIYer and has completed a shed construction and a bathroom renovation in his own home and investment properties. He lives on Long Island, New York. Reach out to him on LinkedIn.
The variety of Houston electricity plans reflects the spirit of competition that inspired the move to deregulated energy in Texas. But how are Houston residents to know what energy plan is right for them?
Most consumers’ main goal is to find the best electricity rates. After all, a lower electric bill was the advantage Texans were promised when the retail energy market was deregulated in 2002.
Yet, the sheer volume of Houston electricity rates can complicate the search for the right plan — unless you know where to look. Here are tips and steps to help you narrow your choice for the best electricity plan in Houston.
Choosing an electric plan might seem complex at first, but it makes more sense when you break down the energy plan shopping process into three manageable steps.
Find the website for a retail provider that interests you. Examples can be found on the cost table above and the ratings table below. Most have a form that allows you to enter your ZIP code, producing a list of the company’s energy plans. Type in your ZIP code and read through the plans.
You’ll also get additional information about each plan, including the contract length, changes in cost by electricity usage, the provider’s customer rating, the cancellation fee, rate type (fixed, variable or prepaid) and the percentage of your energy that will come from renewable sources such as wind or solar.
If you find a plan that appeals to you, move on to the details. Many plans offer tiered pricing, usually lower per kilowatt-hour (kWh) if you use more energy. Rate tiers are often capped at 500, 1,000 and 2,000 kWh per month thresholds.
Check your current electric bill for your average monthly energy usage, then use that to estimate your monthly kWh usage. The price can change based on your estimated consumption.
In most cases, the highest rates are charged for 500 kWh per month of energy usage and the lowest for 2,000 kWh per month.
Once you find a plan you like, most providers allow you to sign up immediately by providing your address and payment method. At this point, you’ll be able to initiate service.
While rates vary among electric companies, choosing an energy provider is not only about the bottom line on your electric bill. Every circumstance is unique, and your choice might hinge on additional services or a company’s reputation.
Here are the factors to consider when deciding what retail energy provider is best for you.
Plans are sold based on their rate per kWh. The average rate per kWh for residential electricity in Texas is 14.3 cents as of April 2024, according to the Energy Information Administration (EIA).
In Houston, the average rate per kWh in March 2024 was 17.6 cents per kWh, according to data from the Bureau of Labor Statistics.
Your monthly electric bill will be determined by your base rate, your rate per kWh and the amount you owe each month in additional taxes and fees.
Your bill might also be affected each month by renewable energy buybacks and any minimum usage fees that are included in your plan.
Most providers run a credit check before you sign up to determine whether to charge a prepaid deposit. If you decide to switch electric companies before the end of your contract, you may be charged an early termination fee as well. Our research shows providers charge between $20 and $300 for early termination.
Most providers show the electricity rate, transmission and distribution price and other recurring fees within their plans’ details. They might not include nonrecurring fees or taxes, so ask about that before you sign your agreement — or read the electricity facts label and full terms of service.
Energy plan types offered by most Houston electric companies:
Some energy companies have served Texas for generations. Others came into being shortly after the state’s energy market was deregulated in 2002.
No matter how venerable or new the provider is, you should perform your due diligence by researching consumer sentiment.
Check with your friends and neighbors for their favorite Texas retail electricity providers (REPs) — or for any red flags. Look up the company’s Better Business Bureau (BBB) page, where you’ll find a BBB-assigned letter grade (or NR for Not Rated) and any consumer alerts about the company.
The Public Utilities Commission of Texas (PUCT) also tracks consumer complaints it receives about every REP. The PUCT considers the ratio of complaints per customer and assigns ratings on a 5-star scale. The more stars are assigned, the lower the ratio of consumer complaints against the company.
While price, plan variety and reputation are the most important factors for selecting a REP, many companies offer perks that improve the customer experience and add value to the deal.
For example, if you are concerned about sudden loss of AC or heat, find out if your REP provides additional surge protection or backup power options. If reducing your home’s carbon footprint is a priority, find out if your REP offers “smart” thermostat installation or automatic usage monitoring.
Some electric companies in Texas are wading into the home warranty business, as well, offering to cover some or all of the cost to repair or replace your home’s major systems or appliances.
As mentioned earlier, when choosing a provider, you should consider other factors such as reputation.
In the chart below, see how our top 12 providers stack up in terms of our star ratings, their PUCT scorecard ratings and their BBB ratings.
The three REPs listed below serve the Houston area and have earned 5-star or 4-star customer ratings from the PUCT’s Power to Choose site. The rating measures complaints per 1,000 customers based on a six-month rolling average.
These three Houston energy providers are also our highest-rated out of the two dozen we’ve reviewed.
Since its founding in 1997, Green Mountain has built a reputation for its commitment to sustainable energy. Its residential and commercial plans are billed as “pollution-free,” and its pricing is at or near industry standards.
Based on its reasonable rates, excellent reputation among consumers and quality customer service, we rated Green Mountain 4.5 out of 5 stars — the highest star rating among the two dozen Texas electric companies we’ve reviewed.
In addition to being one of the largest energy companies in the state, TXU also shows a strong commitment to sustainable energy sources. Its offerings include a basic 12-month plan for 13.9 cents per kWh.
One of TXU’s plans offers free at-home charging for electric vehicles between 7 p.m. and 1 p.m. every day. Any electric vehicle charging that takes place outside of those hours will cost the full per kWh rate.
We gave TXU Energy 4.4 out of 5 stars — tied with Reliant Energy for our second-best score.
Like TXU, Reliant is a well-regarded energy company that successfully transitioned to the deregulated market. Even though the company is not rated by BBB, Reliant earned 4.4 out of 5 stars based on our review standards.
Also like TXU, Reliant likes to make a green energy splash. Most of its plans include some renewable energy sources.
Reliant also offers a wide range of additional services, such as air conditioning and heating systems protection, surge protection and portable backup power.
The biggest difference between consumers who want to switch electric companies and those new to deregulated energy is familiarity with the process, contract language and industry terms.
If you are a new deregulated energy customer in Houston, you should know that many electric companies require you to use a minimum amount of energy each month. Some charge a fee if your usage falls short of the minimum.
When a contract expires, some companies automatically renew on a month-to-month basis. This can affect your rate, so familiarize yourself with renewal policies.
Most Houston electric companies charge an early cancellation fee (also called a termination fee) if you decide to switch companies before the end of your contract.
Some electric companies require a security deposit, usually spread out in payments over time and almost always refundable. The deposit might be waived if your credit history is favorable. However, an electric company might require an upfront deposit paid in full if your payment history is inconsistent.
Every retail provider must include an electricity facts label (EFL) when it presents a consumer with an electricity plan. The EFL is usually a one- or two-page document that includes sections on pricing, key terms and questions, and disclosures.
The top section on pricing contains a detailed breakdown of costs related to electricity delivery to your home. In addition to the price per kWh, you may see a breakdown of costs based on monthly usage, the amount your provider is paying the utility company, meter fees, taxes and other charges.
The terms section includes details about the deposit policy and other associated fees.
The disclosure section covers cancellation fees, the percentage of renewable energy you’ll receive in your plan, and whether the plan is considered a prepaid or pay-in-advance plan (most are not).
Most retail providers in Texas include some renewable energy sources for the power they sell to consumers. Renewable sources include wind, solar, biomass, landfill gas or hydroelectricity.
It’s important to know that electricity providers in the state can designate Texas-produced natural gas as a green energy source in Texas.
About a quarter of all the electricity plans available in Houston guarantee that 100% of the energy they deliver comes from renewable resources. Approximately half of companies guarantee that some of your power will be generated using green energy sources.
Many prominent electric retail providers — such as Reliant, TXU Energy and Constellation — offer at least two or three renewable energy plans. A couple of electric companies in Texas stand out in the green energy market, with myriad sustainable energy sources available.
Green Mountain Energy is a well-known industry leader in Texas. The provider offers seven wind-powered plans over 12, 24 or 36 months with rates between 14.9 cents and 16.5 cents per kWh. It offers two solar plans for 18 months at 15.9 cents per kWh or 12 months at 16.9 cents per kWh.
Green Mountain also offers wind energy plans that include no charges for electricity used between 8 p.m. and 6 a.m., with fixed rates of 17.5 cents per kWh for 12 months or 16.9 cents per kWh for 24 months. The company offers four solar energy buyback plans, which allow consumers to earn credits for solar energy they don’t use.
Gexa Energy is another electric company with a deep selection of green energy plans. All of Gexa’s 17 plans are categorized as renewable energy. Its energy sources include wind, solar, nuclear power and natural gas. The company also offers electric vehicle owners solar energy buyback options and specialty plans.
A deregulated energy market, such as Houston’s, differs from a regulated market in that Houstonians have the power to choose which company to buy electricity from. In regulated energy markets, consumers must use the electric company assigned to them based on where they live.
In Texas, deregulated energy means there are three major players in addition to consumers and government agencies. Those players include the following:
In Houston, the TDU is Centerpoint Energy. Every electricity plan in the region relies on infrastructure managed and monitored by Centerpoint.
Whether you are a Houstonian who wants to switch electric companies or a new Houston resident navigating deregulated energy for the first time, the state of Texas provides a useful tool called Power to Choose.
This website provides a detailed list of available electricity plans when you type in your ZIP code. Along with the name and star rating of the REP, the displayed results include the length of the plan in months, the price per kWh, any cancellation fee and other information to help you make an informed decision.
We typed in Houston’s most-populated ZIP code, 77084, and found 142 plans offered by 42 providers with a cost range of 10.3 cents per kWh to 17.8 cents per kWh.
A deregulated electricity market means competition, which is a positive thing for consumers. Companies fighting for homeowners’ business generally means lower pricing, and that’s exactly what Houston — and Texas as a whole — has seen.
“Texas is the third-fastest-growing state in the country, and as a result, the demand on the grid is immense,” said Payless Power CEO Brandon Young. “Peak demand has grown 42% since 2005, which is enormous. Texas has been able to keep energy costs low while greatly expanding its total generation capacity.”
According to Young, deregulation is a big reason why those costs have remained low for consumers.
“Competition is always good for the consumer,” he said. “Prices in Texas are very competitive and cheap compared to other major markets.”
“Prices in Texas are very competitive and cheap compared to other major markets.” Brandon Young
“Prices in Texas are very competitive and cheap compared to other major markets.”
Weather conditions play a big role, too.
“While events such as Winter Storm Uri and some extremely hot summer temperatures have distorted this perception [that deregulation is a positive thing], based on commodity pricing alone, competition has had a positive impact on the market,” said Don Whaley, a current advisor to Houston REP OhmConnect and former president of two other REPs in the area.
Since Uri — the 2021 winter storm that caused widespread blackouts throughout Texas — the PUCT, ERCOT and the state legislature have taken several steps to ensure the energy supply’s long-term stability, said Whaley.
“Unfortunately, each has come with a price and the result has been a steady increase in the cost consumers pay each month,” Whaley said. “Despite the relative stability in commodity prices, Texas consumers are paying more for their electricity.”
Based on data from the EIA, Texas is the second most likely state to see power outages behind Louisiana. Texas residents saw more hours of power interruption in 2021 than all but two states.
“The challenge Texas faces now is that it needs more power generation that is dispatchable — natural gas or nuclear, for example — yet the investment into power plants of this type is risky,” said Young. “The Catch-22 is that everyone wants clean energy and, likewise, reliability. At present, clean energy is not reliable because it is hard to predict when the wind will blow or when the sun will shine without clouds.”
Familiarizing yourself with energy industry terms is especially important, especially if you are new to Texas’ deregulated energy market. Here are a few acronyms and terms you should know:
The Public Utility Commission of Texas provides a form that allows consumers to file official complaints directly to the commission. The PUCT asks that consumers contact their electric companies to seek a resolution before filing a complaint.
Yes — if you are moving to a home located in the same service area as your former home. If you are moving to another delivery area, you must sign a new agreement. You might be charged an early termination fee, as well.
During extreme weather events, such as deep freezes or heatwaves, PUCT consumer protection rules prohibit providers from shutting off the power because of nonpayment. For example, a winter moratorium is triggered if a customer’s local temperature is at or below 32 degrees Fahrenheit for 48 hours.
If you haven’t already, search for a new electricity plan by perusing our top providers or heading to Power To Choose. A fixed-rate plan is a good option for avoiding surprise rate spikes.
Be sure to look at a recent electric bill to see your average monthly consumption, and use that to determine your rate. Houston electric companies usually have higher rates for customers who use less electricity.
Before you switch to your new provider, check to see if you’re enrolled in a Houston energy plan with your current provider. If you’re still in that contract, consider waiting until the end to switch, or check the early cancellation fee and see if the potential savings on electricity will make it worth paying the fee.
Remember that cheap electricity isn’t the only goal. When deciding, you should also consider contract terms, early termination fees, renewable energy inclusion and company ratings.
We review and rate retail electricity providers in Texas to provide the information you need to select the electric company that fits your budget and home energy needs. The best retail electricity providers offer a variety of plans at reasonable rates, as well as consistent, helpful customer service.
Our ratings are based on our detailed methodology. We score companies out of 100 points using review standards based on the plan types offered, the cost of those plans, the companies’ reputations and the customer service features they offer. We then divide their total scores by 20 to determine a rating out of 5 stars.
BBB and PUCT customer ratings are accurate as of April 2024.
Editorial note: The name “Homefront” refers to the alliance between USA TODAY and Home Solutions that publishes review, comparison, and informational articles designed to help USA TODAY readers make smarter purchasing and investment decisions about their home. Under the alliance, Homefront provides and publishes research and articles about home service and home improvement topics.
Homefront has an affiliate disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Homefront editorial staff alone (see About Homefront). Homefront adheres to strict editorial integrity standards. The information is believed to be accurate as of the publish date, but always check the provider’s website for the most current information.
From February 2023 to February 2024, the average electricity rate in the U.S. increased by nearly 3%, according to the U.S. Bureau of Labor Statistics (BLS). Additional BLS data shows that electricity prices have climbed 29.1% in the past decade and 90.1% over the past two decades. “We are seeing significant changes in both the…
Due to the passage of a landmark deregulation law in 1999, over 400 Texas cities — including Houston, Fort Worth and Waco — foster a deregulated electricity market. Following these changes in legislation, more than 85% of Texans gained the power to choose an electricity provider, according to Energy Texas. This disrupts local monopolies and…
Many municipalities in Texas switched to deregulated energy in 2002, giving residents of those areas a choice among electric companies. The Electric Reliability Council of Texas (ERCOT) manages about 90% of the power load for those deregulated regions, accounting for about 26 million Texans. But each Texan can choose their own electric company — also…
TXU Energy is a highly regarded electricity company in Texas, rated 4.7 out of 5 stars based on over 7,000 Google reviews. Positive reviews routinely praise the company for providing a positive customer experience and excellent communication. However, TXU has a price tag to match. According to March 2023 data from the Texas Public Utility…
TEST Our editorial team is committed to creating independent and objective content focused on helping our readers make informed decisions. To help support these efforts we receive compensation from companies that advertise with us.
The compensation we receive from these companies may impact how and where products appear on this site. This compensation does not influence the recommendations or advice our editorial team provides within our content. We do not include all companies, products or offers that may be available.