In the deregulated Texas electricity market, customers have the freedom to choose which energy companies power their homes and businesses. Energy companies in Houston are part of that deregulated market. Even though Houston energy companies battle for your business with attractive rates and promotions, you still need to do your research.

All the advertising about from Houston energy companies about free nights, free weekends, free smart thermostats, and bill credits show the wide range of plans and companies ready to serve Houston electricity customers. So how do you pick the right company for you? It comes down to two issues. First, you need to understand your normal usage. Second, you see how the plans that are available line up with your power consumption habits.

But before all that, here are some basics about how Houston energy companies operate.

Who are Houston energy companies?

Even though you pay one bill each month for your Houston electricity, there are actually two companies that come together to power your home. One manages the utility infrastructure, and the other buys electricity that they then sell to you.

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TDSP's - Transmission and Distribution Utilities

CenterPoint Energy is the transmission and distribution service provider (TDSP) for Houston and the surrounding area. Like TDSPs in other parts of Texas, CenterPoint maintains the transmission lines, power poles, electricity meters, and other infrastructure that keeps electricity flowing from power plants to customers. Their responsibilities include sending out technicians when a storm causes power to go out.

You may not realize it, but you pay for TDSP services on your monthly electricity bill. CenterPoint Energy charges appear on your bill as a small charge for each kilowatt hour of electricity you use and a small base charge each month.

Here is a current example of the CenterPoint residential tariff includes the following charges:

Centerpoint Residental Tarriff Includes:

Centerpoint Energy Charge Rate
Transmission system charge $0.008439 per kWh
Distribution system charge $0.016489 per kWh
Customer charge $1.62 per retail customer per month
Metering charge $3.85 per retail customer per month

The Public Utility Commission of Texas (PUCT) regulates charges assessed by TDSPs.

Retail electricity providers

While CenterPoint Energy maintains the Houston area electricity infrastructure, dozens of retail electricity providers compete for your business. Retailers purchase wholesale electricity from power generators and sell it to residential and business customers. When you're a Texan living in the state's deregulated electricity market, you have the power to choose your electricity company.

Retail electricity providers offer plans to suit the various power consumption needs of customers. Each plan has pros and cons. Additionally, each one is perfect for some customers and dead wrong for others. The plan and the customer must fit each other.

Low rate energy companies

When it comes to competing for a share of the Texas electricity market, retail electricity providers compete on price. Houston electricity customers want to know who has the best price and how long they can lock in that price. Customer service, renewable options, mobile apps, and online tools are other points of comparison between companies; however, price is often the deciding factor for customers.

Because price is tantamount, the retail electricity advertising you see around Houston reflect this fact. Advertisements often contains offers of free nighttime electricity, free weekend electricity, rebates when you switch, and rewards when you convince your friends to switch. They want you to believe you'll get the best deal possible when you sign up with their plan.

Based on price alone (at 1000k usage) here are is a list of electricity plans available in Houston:

Company & Plan Term Rate
Pulse Power - Texas Saver 12 12 7.4¢
Gexa Energy - Gexa Saver Supreme 24 24 7.6¢
Constellation - 9 Month Usage Bill Credit 9 7.6¢
Gexa Energy - Gexa Saver Supreme 12 7.9¢
Pulse Power - Texas Saver 36 36 8.0¢
4Change Energy - Free Energy 12 12 8.0¢
Gexa Energy - Gexa Saver 12 12 8.4¢
4Change Energy - Easy Saver 12 12 8.5¢
Constellation - 12 Month Flat Tier Plan 12 9.1¢
Power of Texas - Power of Texas 6 6 9.3¢
Entrust Energy - Entrust 6 6 9.3¢
APG&E - TrueClassic 6 6 9.6¢
Chariot Energy - Solarize 6 6 9.9¢
4Change Energy - Value Saver 12 12 9.9¢
Amigo Energy - Simple Choice - 6 6 10.1¢
Constellation - Power To Connect Usage Bill Credit 30 10.2¢
TriEagle Energy - Eagle 36 36 10.3¢
Constellation - 12 Month w/ Bill Credit 12 10.4¢
Frontier Utilities - Premier 6+ 6 10.5¢
TXU Energy - TXU Energy Clear Deal 12 12 10.5¢

Picking the best electricity company in Houston

As discussed at the beginning, selecting the right electricity company is all about knowing your usage and finding the plan that best aligns with it. When you know your normal electricity consumption you can shop for plans that give you the best price.

The best way to figure out your normal usage is to look at your past electricity bills, either from last year or those from the past two months. If you're like most Houstonians, your electricity bill spikes in the hot summer months and bottoms out in the fall and spring. Take note of these extremes, and calculate your average kilowatt hours used per billing cycle.

Once you have these numbers, compare them to what you would pay on several electricity plans you're considering. Use a plan's electricity facts label (EFL) and terms of service to see exactly how each plan works. If you're looking at a plan offering a huge bill credit once you consume 2,000 kWh in a billing cycle but your usage never tops 1,500 kWh, that plan isn't the right one for you. On the flip side, a consumer whose usage is consistently above 2,000 kWh should strongly consider this plan.

Again, it all comes down to the fit between the customer and the plan. Generally speaking, there aren't bad plans, just ones that aren't right for you.

Pricing structures for Houston electricity

Paying for Houston electricity isn't a one-size-fits-all situation. You have choices in how you're billed for electricity. The most common method is fixed pricing. With fixed prices, you pay a certain price for the duration of the plan's contract term. Base charges, tiered rates, bill credits, and other incentives can impact your bill; however, you know up front what you would pay at any usage.

When comparing fixed rate electricity plans, pay attention to early termination fees. These can sting when you want to switch electricity plans. Early termination fees encourage customers to remain committed to their electricity plans for the duration of the contract period. If you switch providers before your contract has expired, an early termination fee may apply.

Variable rate plans and prepaid plans have pricing structures that follow the wholesale electricity market. When your retail provider's cost for electricity goes up, so does your cost. The same happens when the wholesale price decreases. Like with fixed rate plans, variable rate plan customers pay for energy after they use it. Prepaid plan customers buy electricity up front and then use what they've purchased. Since variable rate plans and prepaid plans are month-to-month agreements, they do not have early termination fees.

Houston energy direct to you

Shopping for Houston energy plans is straightforward at Texas Electricity Ratings. You can select from dozens of plans available for Houston electricity customers. Information is at your fingertips with pricing information clearly displayed and applied to a wide range of usages. Dig into the details of each plan by reading EFLs and terms of service to make sure the plan gives you exactly what you want.

How to switch electricity companies in Houston

Texas laws and regulations make switching electricity companies in Houston easy. Once you've found the plan that best matches your needs, you can sign up for that plan right from Texas Electricity Ratings. To get started shopping, just input your zipcode in the box below and press "Shop for Rates."

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After you agree to your new plan, your new electricity company tells your old company about the choice you've made. The Electricity Reliability Council of Texas (ERCOT) also sends you a notice confirming your switch. Your old company sends you a final bill to settle your account. After paying that bill, your obligation to the old company is done. Future bills will come from your new electricity company.






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