Texas Electricity Bills: How to Save Money

Texas electricity bills

OK, nobody’s perfect, I leave the lights on occasionally and sometimes forget to turn down the thermostat outside my son’s room when he goes to school in the morning.

But seriously, this does not explain the $650 electricity bill I received from Green Mountain Energy last month.

Left in the lurch by my Texas Electricity Provider

I frantically called Green Mountain Energy wishfully thinking they mixed my bill up with one of those businesses that provides 15,000 sq/ft of climate controlled storage units at a constant temperate of 72°F.

The customer service rep gracious explained that when my annual contract at 10 cents/kWh expired last month, I was immediately switched to their premium month-to-month rate at 16 cents/kWh.

I died inside a little when I heard this.

My monthly Texas electricity bill was $160 more per month because I didn’t realize electricity providers are deregulated in Texas and they can (and do) charge whatever the market will bear.

How to Chill with a Lower Texas Electricity Bill

Here’s the approach I used to save money on my Texas electricity bill. Trust me, it will work for you too:

Go to www.powertochoose.org. This site has been created by the Public Utility Commission of Texas to help Texans find the best electricity providers and rates. (Please note that all Texans do not get to choose their electric provider. Some communities are served by municipalities, cooperatives, or investor-owned utilities, so electric choice is not available.)

When you arrive the site enter your zip code. If you live in an area where you get to choose your electricity provider, you will probably receive a  large number of plan options. When this happens you need to click on the NARROW YOUR SEARCH button:

Narrow Search Texas Electric Plans

This will take you to a screen that asks about your average monthly electricity usage. I was able to find my average monthly electricity usage on my current electricity provider’s website (Green Mountain Energy) under Usage History:

Electricity Usage History

My monthly usage was around 3000 kWh so I chose the third option:

Monthly Electricity Usage

You can see in the image below that the interface has now narrowed the number of plans to 314.  You have the option to view plans or hit the NEXT button and go to the second question:

View Available Plans After Question 1

There were still too many plans to sort through, so I chose to go to the next question which gives you three plan options:

1. Variable rate plans have no monthly contract or cancellation fee, but the rate you pay per kWh can vary from month to month. Variable rates always start out low, but increase in price without ever seeming to go down. As a result, it becomes  practically impossible to compare these plans.

2. Indexed rate plans are directly tied to a pricing formula connected to a publicly available index. If the index rises, your monthly rate will also, but if the index falls, your rates will be lower. It is very difficult to monitor theses plans actively enough to know when to switch again.

3. Fixed rate plans have a set rate that doesn’t change throughout the contract period.

I chose the fixed rate plan because it is easier to compere and monitor on an annual basis.

Fixed Rate Electricity Plan

The next screen lets you choose the length of your electricity contract.

The cheapest rates are going to have shorter contracts of 3-6 months. I recommend you avoid them. Utility companies are supposed to notify you that your contract is supposed to expire in 30 days, but this notice doesn’t always find your mailbox.

I know that mine didn’t.

If your letter does arrive and you don’t remember to call and renew/cancel, you will end up in my situation and be charged a much higher rate on a month-to-month basis until you sign a new contract with an electricity provider.

There are also longer plans that go from 24- 36 months, but if the price of electricity falls, you’ll be stuck paying higher rates until the end of the term.

I chose a 12 month contract because there is some evidence that suggests they tend to provide the best rates.

Length of Electricity Contract

When you get to the next screen, click on the VIEW PLANS  button:

View Electricity Plans

The next page displays your search results:

Electricity Plan Search ResultsElectricity Search Results Page 2

You can see that my search results show CenterPoint is responsible for delivering the electricity in my area, reading my meter and maintaining the poles a wires. But they are not my default electricity provider.

My estimated usage, contract length and plan type were carried forward from my original entries. I recommend you leave the Price/ kWh box blank to make you do not eliminate electricity providers that have competitive rates.

Choose the  Show All Plans option under the Prepaid and Time of Use Plans to make sure you don’t exclude any competitive providers.

The Complaint Score is very important because it measures consumer complaints per 1,000 customers based on a 6-month rolling average. I strongly recommend that you choose the box at the top with five pumpkin heads to make sure you are signing a contract with a company that has  an outstanding reputation and great customer service.

Chose the N/A option for renewable energy. Do not get sucked in by companies that brand themselves as renewable  or “clean” energy providers. This is the mistake I made with Green Mountain Energy and paid dearly for it.

The Electric Companies should be set on ALL.

After choosing these settings, It is important to make sure you click the refresh search results in the bottom of the left column:

Refresh Search Results

This narrowed my search down to 14 plans.  Each plan came with links to a Fact Sheet that explained the average price of electricity per kWh, monthly service charges, and discounts for auto-pay and e-billing.

I favored American Light and Power because they offered a .25 discount per kWh when I enrolled in their online AutoSave program:

Electricity Rate Discount for Auto Pay and e-Billing

This credit reduced my average price per KWH charge to 9.35 cents and saved me 40% on my monthly electricity bill.

Fact Sheet For Electricity Plan

Don’t Forget Your Due Diligence

Many companies have minimum limits on the amount of power you must use, or you pay more:

Minimum Usage Fees

It is very important to read through your fact sheet, terms of service and special terms to see if there are any hidden fees or charges you may incur later on.

My fact sheet stated that there would be a monthly customer service charge of  $9.95 and an early termination fee of $175. The terms of service agreement included a 5% late charge for my current month’s billing.

After you read through all your contractual items, you should do an internet search on Google for the company you would like to choose.

Visit their website and review the terms of the contract that were displayed on the Power to Choose site:

American LIght an Power Website

Google the company name and include terms like “scam” and “rip-off”.

Internet Search Electricity CompanyYou can also check online for the company’s Better Business Bureau rating:

American Light & Power Better Business Bureau Rating

Bottom Line

I ultimately chose American Light and Power. They had the best complaint scorecard and the lowest per kWh rate for a 12 month annual contract.

How to Flip the Switch

When you choose your new electricity service provider you do not have to contact your current provider to cancel your service. It happens automatically and there is no loss of power during the transition.

I recommend you give yourself a 5-7 day buffer for the transition to your new service provider. It took five days to switch my electricity service to American Light and Power.

How are you saving money on your Texas electricity bill?

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Hi! We’re the Hunter family from Houston, Texas. Our blog is dedicated to home design, remodeling, dream closets, energy efficient homes, travel, and living well. We are on a mission to help you create a home full of love, laughter, joy, happiness, fun, hope, memories and … style! Learn more..