Direct Energy Free Nights Review: What the EFL Actually Charges After the Free Window

Direct Energy free nights, sold as Twelve Hour Power, charges nothing for electricity used from 9 p.m. to 9 a.m. The catch is on the Electricity Facts Label. As of September 29, 2026, the 12-month versions charge 34.5 to 35.4 cents per kWh for daytime energy on Direct Energy's current EFLs (dated August 1 and September 1, 2026), or roughly 40.5 to 41.8 cents once delivery is added.

That daytime price is the whole review. Twelve Hour Power can beat a fixed-rate plan, but only for a home that moves well over half of its usage into the free window, and the EFL's own averages assume just 45%.

Key takeaways

• Direct Energy Twelve Hour Power makes 9 p.m. to 9 a.m. free every day, and its EFLs state that no TDU delivery charges are billed during that Designated Free Period.
• As of August 1, 2026, the 12-month daytime energy charge is 34.4999 cents per kWh in Oncor. As of September 1, 2026, it is 35.4314 cents in CenterPoint and 34.8598 cents in AEP Texas Central.
• Longer terms charge far less per daytime kWh. As of August 1, 2026, the Oncor 18-month Auto Pay plan charges 25.5533 cents and the 24-month plan charges 27.6081 cents.
• Every average price on these EFLs assumes 45% of your usage lands in the free window. At that share, the Oncor 12-month plan averages 23.5 cents per kWh at 1,000 kWh as of August 1, 2026, against the 15.88-cent Texas residential average the U.S. Energy Information Administration (EIA) reported for July 2026.
• Measured against that 15.88-cent benchmark, the Oncor 12-month plan breaks even only when about 64% of your usage falls between 9 p.m. and 9 a.m.

What is Direct Energy's free nights plan?

Direct Energy's free nights plan is Twelve Hour Power, a fixed-rate time-of-use electricity plan that charges no energy fee for anything used from 9 p.m. to 9 a.m. and one fixed energy charge for everything used from 9 a.m. to 9 p.m. Direct Energy's free nights page advertises "12 hours of free power" and labels the 24-month version its most popular plan.

Direct Energy is a Texas retail electric provider owned by NRG Energy. Its current Twelve Hour Power EFLs cover 12-month, 18-month and 24-month terms, and some versions add an Auto Pay discount. The EFL calls the free hours the "Designated Free Period."

Twelve Hour Power has one real structural advantage over many free nights plans. The EFL states: "All delivery charges will be prorated and the customer will not be billed for any TDU delivery charges during the Designated Free Period." A nighttime kWh on this plan genuinely costs nothing, not the roughly 6 cents of delivery that some rival free nights plans still bill overnight.

What does the Direct Energy EFL charge after the free window?

As of September 29, 2026, Twelve Hour Power charges a daytime energy rate between 21.8009 and 35.4314 cents per kWh across the six current EFLs reviewed below, depending on the utility and the contract term, plus a $9.95 monthly base charge. Because delivery is billed only on daytime usage, the true price of a daytime kWh is the energy charge plus the utility's per-kWh delivery rate.

Every plan in the table also carries the $9.95 base charge plus the utility's fixed monthly delivery charge ($4.06 in Oncor, $4.90 in CenterPoint, $3.24 in AEP Texas Central), which the EFL's pricing formula prorates to the paid share of usage. Offers change by address and by date, so pull the EFL for your own ZIP code before relying on any row. The Oncor 12-month figures come from the Twelve Hour Power 12 Oncor EFL.

For context, as of July 1, 2024, Dallas Morning News Watchdog columnist Dave Lieber wrote that once the free period ends on Texas free plans, "the kWh rates can be as high as 21 to 29 cents per kWh." When he found a 28.8-cent daytime rate on a competing plan in that column, he wrote: "I have never seen a kWh price that high." The 12-month Twelve Hour Power daytime charge in August and September 2026 sits about 6 cents above that figure before delivery.

Does Direct Energy charge delivery fees during the free hours?

No. Every Twelve Hour Power EFL reviewed here says the customer "will not be billed for any TDU delivery charges during the Designated Free Period," and the EFL's pricing formula applies delivery to 55% of monthly usage, the daytime share it assumes. The free window truly costs nothing, which is a genuine difference from plans that bill delivery around the clock.

That delivery cost does not disappear, though. It moves into the daytime. Watt Owl's March 2026 analysis of two Texas homes, with rates as of February 22, 2026, found that on the four free-hours plans it tested, "free" electricity still cost about 6 cents per kWh in Oncor delivery. It also noted that the plans which waive delivery see "their peak rates jump above 20¢/kWh" (as of February 22, 2026). Twelve Hour Power follows that pattern. Each daytime kWh carries the full 6.0295-cent Oncor delivery rate on top of the 34.4999-cent energy charge, which is how the all-in daytime cost on the 12-month Oncor plan reaches 40.53 cents as of August 1, 2026.

How much more does the 12-month plan charge per daytime kWh?

The 12-month Twelve Hour Power plan charges 8.9466 cents more per daytime kWh than the 18-month Auto Pay version in Oncor (34.4999 versus 25.5533 cents, EFLs dated August 1, 2026). In CenterPoint the gap widens to 13.6305 cents (35.4314 versus 21.8009 cents, September 1, 2026). The shorter commitment carries a steep premium, and the EFLs do not say why.

In dollars, a home using 1,000 kWh a month with 45% in the free window buys 550 daytime kWh. On those 550 kWh, the Oncor 12-month energy charge costs $49.21 more per month than the 18-month plan before any Auto Pay discount, or about $590 a year.

Two details complicate the longer terms. First, the early termination fee rises to $180 on the 18-month plan and $295 on the 24-month plan, compared with $150 on the 12-month plan. Second, the Auto Pay price only applies while you are enrolled: the EFL says "if you are not enrolled in the automatic payment option, you will not receive the discount." Oddly, the 24-month Oncor plan (27.6081 cents) charges more per daytime kWh than the 18-month Auto Pay plan (25.5533 cents) even before the discount, so the longest term is not the cheapest one on these labels.

What does the EFL's "45% free" assumption mean for your bill?

The 45% assumption means the advertised average prices only hold if 45% of your usage falls between 9 p.m. and 9 a.m. Below that share, your real bill runs higher than the EFL's averages. The EFL puts it this way: "Average price calculations are based on a total consumption profile over a 12 month period assuming 45% of consumption occurs during the Designated Free Period." Texas rule 16 TAC 25.475 requires the average price at 500, 1,000 and 2,000 kWh, but the 45% share is Direct Energy's assumption, not a measurement of your home.

The table below models a 1,000 kWh month in Oncor at different free-window shares, using the EFL line items as of August 1, 2026 (daytime energy charge, $9.95 base charge, and delivery prorated to daytime use). The last column is 1,000 kWh at 15.88 cents, the Texas residential average price in EIA's Electric Power Monthly for July 2026.

These are modeled bills that exclude taxes and the small PUC assessment, which is why the 45% row lands within a few cents of the EFL's own 1,000 kWh averages (23.5, 18.3 and 19.7 cents). At the EFL's 45% assumption, the 12-month plan costs about $76 more per month than paying the July 2026 state average, or roughly $915 over a year.

How much of your usage has to shift to break even?

Break-even on Twelve Hour Power falls between about 43% and 72% of monthly usage in the free window, depending on the term, the utility and the fixed rate you compare against. The break-even share is the point where the plan's daytime cost (daytime usage times the all-in daytime kWh price, plus the prorated delivery charge and the $9.95 base charge) equals the fixed plan's bill.

The 13-cent column approximates today's cheapest fixed plans. Clear Energy Facts' Twelve Hour Power review, updated September 28, 2026, compared the plan against the top 20 true fixed-rate plans, led by a 13.2-cent plan at 1,000 kWh as of that date, and concluded: "55% or more is what you need to make this plan worth it, and this is not easy to achieve." The 18-month and 24-month rows above land in that same range, while every 12-month row sits well above it.

Can a real Texas household shift that much usage?

The limited real-usage data available suggests most households cannot. Watt Owl ran 15-minute Smart Meter Texas data from two Dallas-Fort Worth homes and found 22.4% and 15.6% of their usage between 11 p.m. and 6 a.m. Its widest window, 8 p.m. to 8 a.m., which is the closest it tested to Direct Energy's 9-to-9 hours, captured 41.2% and 37.2%. Both homes fall short of the EFL's 45% assumption, let alone a 55% to 64% break-even. Two homes are a small sample, which is exactly why your own meter data matters more than any average.

Texas afternoons are the first obstacle. ERCOT's hourly peak load reached a record 91.1 gigawatts on July 22, 2026, and EIA reports the peak occurred at 6:00 p.m. Central, squarely inside Twelve Hour Power's paid window. Afternoon air conditioning cannot move to midnight, and Watt Owl found the free-period share "barely changes by season" in its data.

Habits are the second obstacle. Rebecca Bridges of ElectricityPlans told the Dallas Morning News: "They think they're going to beat the price advertised on the Electricity Facts Label. But people's habits tend to be pretty ingrained. Everybody wants something for free." Her first piece of advice was simpler: "Make sure you understand what you're buying."

How do you test Direct Energy free nights against your own usage?

The 9-to-9 Daytime Kilowatt Test is a four-step check that turns a Twelve Hour Power EFL into a yes or no for your specific home before you sign.

1. Find the daytime energy charge. On the EFL for your address, read the line "Daily beginning at 9:00 AM ending at 9:00 PM."
2. Add the delivery rate. Add your utility's per-kWh delivery charge from the same EFL. The sum is the all-in price of every daytime kWh, for example 40.53 cents on the Oncor 12-month plan as of August 1, 2026.
3. Measure your free-window share. Download 15-minute interval data from Smart Meter Texas for the last 12 months, then divide the kWh used between 9 p.m. and 9 a.m. by your total kWh. Use a full year, because summer afternoons are where this plan wins or loses.
4. Compare with break-even and keep a cushion. Check your share against the break-even table for your plan and your best fixed-rate alternative. If your share does not clear break-even by at least 5 percentage points, a fixed-rate plan is the safer choice, because heat waves, sick days and work-from-home weeks all push usage into daylight.

The Real Cost of Free Nights Plans guide walks through reading a free nights EFL line by line, and the free nights plan calculator runs the same math for other plans.

Who is Direct Energy free nights a good fit for?

Twelve Hour Power fits homes whose electricity use is naturally nocturnal or easy to schedule: night-shift households, electric vehicle owners who charge overnight, and some homes with rooftop solar.

• Night-shift households. Watt Owl names people who sleep through the day as the group that "might get there" on free nights plans.
• EV owners who charge after 9 p.m. EnergySage estimates the average EV driver uses 408 kWh a month on home charging. Add that load to a 1,000 kWh home that already runs 40% of its usage at night, and the free share rises to about 57%, above break-even for the Oncor 18-month and 24-month plans against the 15.88-cent average.
• Some solar homes. Clear Energy Facts notes that for solar owners "the math is different, and this is usually their favorite plan," because panels cover much of the daytime load. Confirm how Direct Energy credits any electricity you export before switching, since this review covers only the consumption charges.

The poor fits are work-from-home households, homes that run air conditioning hard all afternoon, and anyone considering the 12-month plan without a year of data showing 60% or more of usage at night.

What fees and contract terms should you check before signing?

Beyond the daytime rate, five terms on the Twelve Hour Power EFL and plan page decide what the plan really costs.

• Base charge: $9.95 per month on every EFL reviewed here, billed whether you use electricity or not.
• Early termination fee: $150 on the 12-month plan, $180 on the 18-month plan and $295 on the 24-month plan, each applying through the end of the term. The 12-month EFLs say the fee does not apply if you move and provide a forwarding address and other requested evidence of the move. Look for the same move language on the 18-month and 24-month EFLs before you sign.
• Auto Pay condition: the 0.5-cent discount applies to the paid energy charge only while you are enrolled in automatic payment.
• 90 Day Satisfaction Guarantee: Direct Energy's plan page says you can change to a qualifying Direct Energy plan in the first 90 days with no fee. As written, it covers a move to another Direct Energy plan.
• Price dates: the EFLs reviewed here are dated August 1 and September 1, 2026. Rates on new EFLs can differ, so re-check the label on the day you enroll.

How does Direct Energy free nights compare with Ambit Free and Clear Nights?

Ambit Free and Clear Nights offers free electricity from 9:00 p.m. to 5:59 a.m., seven days a week, according to Ambit Energy's launch announcement. That is a nine-hour window against Twelve Hour Power's twelve hours. A longer window captures more usage, so the fair comparison is not window length alone but the all-in daytime kWh price each EFL charges against the free share each window captures in your home.

Run the same 9-to-9 Daytime Kilowatt Test with a 9 p.m. to 6 a.m. window for Ambit, using the current Free and Clear Nights EFL for your address, and check whether each EFL bills delivery during the free hours, because that changes the all-in math. The TXU Free Nights and Weekends vs Ambit Free and Clear Nights break-even comparison shows that calculation step by step. If the test says your home cannot shift enough usage to night, a fixed-rate plan avoids the daytime premium entirely, and every Ambit Energy plan compared for 2026 lays out those options side by side.

Frequently asked questions

What are Direct Energy's free night hours?

Direct Energy's Twelve Hour Power plans make electricity free from 9 p.m. to 9 a.m. every day, per Direct Energy's free nights page and its EFLs. Usage from 9 a.m. to 9 p.m. is billed at the plan's daytime energy charge.

What is the Direct Energy free nights daytime rate?

As of August 1, 2026, the daytime energy charge is 34.4999 cents per kWh on the 12-month Oncor plan. As of September 1, 2026, it is 35.4314 cents on the 12-month CenterPoint plan and 34.8598 cents on the 12-month AEP Texas Central plan. Longer terms run lower, such as 27.6081 cents on the 24-month Oncor plan as of August 1, 2026. Add your utility's delivery rate for the all-in daytime cost.

Does Direct Energy charge TDU delivery fees at night?

No. The Twelve Hour Power EFLs state that the customer will not be billed for any TDU delivery charges during the Designated Free Period. Delivery is billed on daytime usage instead, adding about 5.8 to 6.4 cents to every daytime kWh, per the EFLs dated August 1 and September 1, 2026.

What is the Direct Energy free nights cancellation fee?

The early termination fee is $150 on the 12-month plan, $180 on the 18-month Auto Pay plan and $295 on the 24-month plan, per the EFLs dated August 1 and September 1, 2026. The 12-month EFLs waive it if you move and provide a forwarding address and proof of the move.

Is Direct Energy free nights worth it?

Direct Energy free nights is worth it only if a year of Smart Meter Texas data shows your 9 p.m. to 9 a.m. share clearly above break-even, roughly 53% to 65% against the 15.88-cent Texas average for most versions. The EFL itself assumes 45%, and at that share every version reviewed here costs more than the state average.

The bottom line

Direct Energy free nights is honest about one thing that many free plans are not: the night really is free, delivery included. The price is a daytime kWh that costs 40.5 to 41.8 cents all-in on the 12-month plans and about 28 to 34 cents on the longer terms, as of September 29, 2026. Pull your Smart Meter Texas history, run the 9-to-9 Daytime Kilowatt Test, and sign only if your own numbers clear break-even with room to spare.

Plan details and rates subject to change. The Electricity Facts Label for any plan, including every Ambit Energy plan, is available before you enroll, and it is the document to check.

The best time to renew an electricity contract in Texas is the fall shoulder window of September and October, and inside the 14 days before your current contract ends. That window opened this month with a jolt. On September 12, 2026, TexasPowerCost's daily tracker logged 27 plans withdrawn, 25 plans repriced, and only 2 new plans launched across the Houston, Dallas, and Austin-area markets in a single day. If your contract ends this fall, the shelf you shop from just changed.

Key takeaways

• On September 12, 2026, 27 Texas electricity plans were withdrawn, 25 were repriced, and 2 launched, according to TexasPowerCost. Across September 1 to 13, the tracker counted 56 withdrawals, 358 repricings, and 22 launches.
• Texas retail electric providers must send a residential contract expiration notice at least 30 days before the end date, and you can switch without an early termination fee starting 14 days before that date, per the Public Utility Commission of Texas.
• CenterPoint's per-kWh delivery charge rose 28.3 percent on September 1, 2026, from 4.999 to 6.4130 cents, according to Rhythm Energy. Delivery charges are identical on every plan, so they change your bill, not which plan wins.
• 75 percent of Texas shoppers picked contracts of 12 months or less in 2025, per ElectricityPlans, and the 12- versus 24-month spread is usually under 1 cent per kWh as of September 21, 2026, per TexasPowerCost.
• Choose Texas Power's marketplace data shows August as the cheapest month to buy, at 16.67 cents per kWh as of July 21, 2026 including delivery, and January the most expensive at 17.47 cents.

What happened to Texas electricity plans on September 12, 2026?

On September 12, 2026, retail electric providers withdrew 27 plans, repriced 25, and launched 2 across the Houston, Dallas, and Austin-area markets, according to the TexasPowerCost plan-changes tracker. Counts are by distinct plan, so one plan listed in three utility territories counts once. That was the largest single-day withdrawal count of the month to that point by a wide margin, and it included True Power's 36-month True Value plan in Dallas and Houston.

Here is how the first two weeks of September played out, day by day, per the same tracker:

Add it up and September 1 through 13 produced 56 withdrawals, 358 repricings, and 22 launches. Repricing was the daily norm. Withdrawal came in one burst. My read: providers repriced their way through the first week after the September 1 delivery-rate refresh, then cleared the plans they no longer wanted to sell into fall on September 12.

Why do retail providers pull plans in bulk in September?

Retail electric providers withdraw plans in bulk in September because the regulated delivery rates reset on September 1 and the summer's wholesale costs settle at the same time, so every Electricity Facts Label has to be re-issued anyway. A withdrawal removes an offer for new shoppers. An expiration is the end of your own contract term. The two are different events, and only the second one touches your bill.

Brady Hartung of Rhythm Energy summarized the calendar in the provider's September 1, 2026 delivery-charge update: "The five TDUs in Texas get approval from the Public Utilities Commission of Texas (PUCT) to change their rates throughout each year, but the largest changes are typically March 1 and September 1."

Summer 2026 gave providers plenty to reprice around. ERCOT recorded an all-time peak demand of 91,134 MW on July 22, 2026, and a weekend record of 90,411 MW on August 23, according to ERCOT's 2026 peak demand records. Those records stay unofficial until final settlement, and that settlement is what providers are pricing into their fall shelf right now.

When is the best time to renew an electricity contract in Texas?

The best time to renew a Texas electricity contract is a shoulder-season month, when statewide demand is moderate and providers are not pricing in peak risk. Rhythm Energy names April, May, September, and October as the months with lower demand and more stable rates. Energy Texas gives the same advice: renew in fall or early spring. The 60 to 90 days before your end date is the practical shopping window, and the final 14 days is the fee-free switching window.

The marketplace data adds a twist. Choose Texas Power's analysis of two years of purchases found that August was the cheapest month to buy, at an average of 16.67 cents per kWh as of July 21, 2026 including delivery, while January was the most expensive at 17.47 cents. At the 1,000 kWh tier, August was cheapest and January dearest. At 500 kWh, December was cheapest and July the most expensive. Author Dominique Coury offered one explanation: shoppers signing up in August "may be more eager to select the cheapest plan available to offset their recent high summer electricity bills."

So which is it, fall or August? Both numbers are real, and they measure different things. Shoulder-season advice describes the offer prices providers post. The Choose Texas Power figure describes what shoppers actually chose. The gap between the two is the discipline of the buyer, not the season.

The U.S. Energy Information Administration measures a third thing: the average price every Texan paid. Texas residential electricity averaged 15.94 cents per kWh in June 2026 (as of August 26, 2026, the latest EIA release), up from 15.26 cents in June 2025, per EIA's Electric Power Monthly. That average blends every contract still running from last year with every new one signed this summer. Timing your renewal controls the offer price you lock, not the statewide average. If you are choosing between plan types before you time the renewal, my guide to fixed-rate versus variable-rate electricity in Texas covers the tradeoff.

The 30-14-0 Renewal Clock: what to do at each mark

The 30-14-0 Renewal Clock is a three-mark checklist built on the Public Utility Commission of Texas rules for residential contract expiration. Day 30 is when your notice must arrive. Day 14 is when you can switch for free. Day 0 is when your contract ends and the default rate takes over.

The PUCT's consumer guidance states the rule directly: "Retail electric providers are required to notify residential customers at least 30 days before a contract expires. The residential customer can switch without incurring an early termination charge if the switch is no earlier than 14 days before the contract expiration date provided in the notice. If the customer takes no action in response to the notice, the REP will serve the customer on a month-to-month product."

1. Day 30 (notice arrives): Pull the renewal offer and your current Electricity Facts Label side by side. Note the end date on the notice. That date, not your last bill date, drives everything that follows.
2. Day 30 to day 15: Shop new-customer offers in your ZIP code at your real usage. Compare the total bill at 1,000 kWh, not the headline rate. My walkthrough on reading the six numbers on a Texas Electricity Facts Label shows where the price cliffs hide.
3. Day 14 (fee-free window opens): Enroll in the winner. A switch requested inside this window carries no early termination fee under the PUCT rule.
4. Day 0 (contract ends): If you did nothing, you are now on the month-to-month product. Treat that as a deadline you missed, not a plan you chose.

What happens if your Texas electricity contract expires and you do nothing?

If your contract expires and you take no action, your provider moves you to a month-to-month product whose price can change every billing cycle. That is the default the PUCT rule describes. Month-to-month products carry no early termination fee, so leaving one costs nothing, but staying on one through a cold snap or a hot spell means paying whatever that month's price turns out to be.

Rebecca Bridges, chief marketing officer at ElectricityPlans and a deregulated-market veteran since 2001, put the risk in calendar terms in the site's 2025 shopping review: "Timing on your renewal matters most. For example, a 6-month contract can give you a low price from December to May. But you'll be shopping again at the start of the summer season, which makes it unlikely you'll retain that low rate."

A holdover rate works the same way in reverse. It floats you into whatever season comes next. A deliberate month-to-month plan, like the one I describe in how Lone Star Flex works, is a bridge you choose. A holdover is a bridge you fell onto.

Your plan got withdrawn from Power to Choose. Now what?

A withdrawal removes the offer for new shoppers. It does not change your existing contract, your rate, or your end date. Your Electricity Facts Label still governs until day 0. What changes is the shelf you will shop from when the 30-day notice lands.

Three moves cover it:

• Find your end date on your last bill or your Terms of Service, then set a reminder 45 days ahead of it.
• When the renewal offer arrives, compare it to current new-customer offers in your ZIP code at your usage. TexasPowerCost's plan-types guide notes that the spread between 12- and 24-month plans is usually under 1 cent per kWh as of September 21, 2026, so the term decision is smaller than the plan decision.
• Read the renewal EFL for usage credits, minimum-usage fees, and base charges. My piece on the five plan tricks that cost Texas households $480 a year lists the ones that show up most.

How much did delivery charges change on September 1, 2026?

Delivery charges changed on September 1, 2026 in every Texas utility territory, and the biggest move was CenterPoint's 28.3 percent per-kWh increase. Delivery charges are regulated by the PUCT, pass through on every plan from every provider, and show up as a separate line on your bill. Here are the per-kWh rates as of September 1, 2026, as reported by Rhythm Energy and Energy Texas:

One note on timing: BKV Energy's delivery-charge history lists Oncor's 6.0295-cent rate as effective August 1, 2026, and AEP Texas Central's decrease as effective August 28, so those two rows reflect the fall level rather than a September 1 step. I covered the Oncor change in why your Oncor delivery charge went down and your bill still went up.

For a Houston home using 1,000 kWh a month, CenterPoint's monthly delivery cost moves from about $54.71 to $69.03, according to BKV Energy's September 2026 analysis. Graham Lumley, BKV's growth product manager, put the impact at about 24 to 27 percent more per month depending on a home's usage. Since every provider passes the same delivery rate through, this raises every renewal offer in Houston by the same amount. It never changes which plan is cheapest.

Should you lock in 12 or 24 months this fall?

Lock in the term that ends in a shoulder month, and let the spread between terms decide the rest. Three quarters of Texas residential shoppers picked a contract of 12 months or less in 2025, and 61 percent chose exactly 12 months, up from 53 percent in 2024, according to ElectricityPlans' 2025 annual review. Long-term contracts saved only 3 to 5 percent, which was not enough to persuade most buyers. The site attributes the shift to the ERCOT wholesale market flipping into contango in August 2025, where near-term power is cheaper than power years out.

The end-date math matters more than the term label. A 12-month plan signed in October ends next October, a shoulder month. A 24-month plan signed in October does the same two years out. A 6-month plan signed now ends in March, which is fine. An 8-month plan lands in May, right at the door of summer, which is the trap Bridges described. If your contract ends in June, July, or August, use the term length to move the next end date, not to chase a fraction of a cent.

Whether the price itself is worth locking is a forward-curve question, and I worked through it in should Texans lock in a fixed rate this August. The short version: with 12- and 24-month spreads under a cent as of September 21, 2026, a fixed rate that ends in the right month beats a slightly lower rate that ends in the wrong one.

Which Ambit plan fits a fall 2026 renewal?

Three Ambit Energy plans map to the three situations a fall renewal creates. Lone Star Classic is the fixed-rate plan for locking a shoulder-season price for a full term. Lone Star Flex is the month-to-month plan with no contract, which works as a deliberate bridge when your current contract ends in a bad month and you want to reach October or March before you commit. Free and Clear Nights fits homes that can shift laundry, dishwashing, and cooling into the free-nights hours. I compared all of them, with rates, terms, and fees, in every Ambit Energy plan compared for 2026, and you can check current pricing in your ZIP code on the Texas electricity rates and plans page.

Rates and plan availability are as of September 22, 2026, vary by service area, and are subject to credit approval. The Electricity Facts Label for each plan has the full pricing and terms.

Frequently asked questions

How far in advance does a Texas electricity provider have to notify me before my contract expires?
At least 30 days before the expiration date for residential customers, per the Public Utility Commission of Texas. The notice must state the end date, and that date starts the 14-day fee-free switching window.

Can I switch electricity plans before my contract ends without paying a fee?
Yes, if the switch takes place no earlier than 14 days before the expiration date on your notice. Switching earlier than that can trigger the early termination fee listed on your Electricity Facts Label.

Does a plan being withdrawn from Power to Choose cancel my contract?
No. A withdrawal removes the offer for new customers. Your contract, rate, and end date stay exactly as written in your Terms of Service and Electricity Facts Label.

What is the cheapest month to sign up for electricity in Texas?
Choose Texas Power's marketplace data from the past two years shows August as the cheapest purchase month, at 16.67 cents per kWh as of July 21, 2026 including delivery, and January the most expensive at 17.47 cents. Provider guidance points to the shoulder months of April, May, September, and October for the most stable offer prices.

Is a 24-month plan worth it in fall 2026?
Only if it ends in a shoulder month and the rate is competitive. The spread between 12- and 24-month plans is usually under 1 cent per kWh as of September 21, 2026, per TexasPowerCost, and ElectricityPlans found long-term contracts saved just 3 to 5 percent in 2025.

SmartEnergy Holdings LLC launched the SmartGreen 9 $200 Bill Credit plan on September 3, 2026. The plan name reads like a monthly bill credit, but the Electricity Facts Label tells a different story. The $200 is a promo credit split into two $100 payments across a 9-month contract, and four separate conditions can wipe it out before you ever see the second payment.

That mismatch between plan marketing and plan mechanics is why bill credit electricity plans confuse Texas households every year. This guide is written for Texas households and small businesses shopping electricity plans in the deregulated ERCOT market. It walks through the SmartEnergy launch, how traditional Texas bill credit plans actually work at the 500 kWh, 1,000 kWh, and 2,000 kWh usage bands the state requires providers to disclose, the specific ways you can lose the credit, and how to read the Electricity Facts Label before you sign anything.

Key Takeaways

• SmartEnergy's $200 credit is a promo credit ($100 posted after a phone or email claim, $100 after 6 months), not a monthly usage-based bill credit.
• Bill credit plans made up 10.8% of tracked Texas retail electricity plans in the week of September 7, 2026, according to TrueBill Energy, up from 3.1% in May 2026.
• 13% of the 120 Texas plans surveyed in the September 2026 ChooseMyPower market report had a bill credit cliff that made a 500 kWh month cost at least $25 more than a 1,000 kWh month.
• Modeled over 12 months of realistic Texas usage (average 1,200 kWh per month), SmartGreen 9 costs roughly $1,539 after the full $200 promo credit is claimed, versus $1,740 if the credit is forfeited, a $200 swing on identical usage.
• Four conditions forfeit a bill credit: a past-due account balance, early termination, a plan change during the term, or missing the required claim step.
• The Public Utility Commission of Texas requires every Electricity Facts Label to display the total average price at 500, 1,000, and 2,000 kWh per month under 16 TAC section 25.475(g)(2)(C)(i). Those three numbers reveal the credit cliff before you sign.

What did SmartEnergy launch on September 3, 2026?

SmartEnergy launched SmartGreen 9 $200 Bill Credit, a 9-month, 100% renewable, fixed-rate plan sold by SmartEnergy Holdings LLC (doing business as SmartEnergy), a retail electric provider certified under PUCT REP number 10253. The Oncor Electricity Facts Label is dated September 1, 2026 and identifies the plan as EFL number 20260901_F_ONC_SG9-1MNTHBC_M2001. SmartEnergy sells the SmartGreen 9 plan family across every major Texas transmission and distribution utility area: Oncor, CenterPoint Energy, AEP Texas Central, AEP Texas North, and TNMP.

The Oncor version of SmartGreen 9 shows the following average prices on its EFL:

The SmartEnergy energy charge is 5.3 cents per kWh, with a $4.95 base charge per billing cycle. Oncor delivery adds $4.06 per billing cycle plus 6.0295 cents per kWh. Taxes, the PUC assessment, and any applicable governmental charges are additional.

The plan is listed as "No Min." on usage, so unlike a traditional Texas bill credit plan, it does not force you to hit 1,000 kWh in a month to receive anything. What it does have is a promo credit with strings attached.

How does the SmartEnergy $200 credit actually work?

The $200 is not a monthly credit. It is a two-payment signup incentive with four separate forfeiture conditions written into the EFL, and neither payment is automatic:

• $100 posts on your first bill after you contact SmartEnergy by phone or email to claim the credit.
• $100 posts after 6 months, once SmartEnergy receives your redemption form.
• If a credit balance is larger than your bill in a given month, it rolls forward to the next bill until it is consumed.
• Credits cannot be exchanged for cash or other value items.

The credit is lost if:

1. Your account is past due when you try to claim it.
2. You terminate service early (before the end of the 9-month term).
3. You switch to a different SmartEnergy plan before the credit is applied.
4. You never complete the phone, email, or form step to claim it.

Early termination also carries a fee: $20 for each month remaining in the initial term, in addition to any forfeited credit. Late payments trigger a 5% penalty on the past-due balance, and there is a $40 insufficient-funds fee. The price is fixed during the initial term except for changes caused by TDU charges, ERCOT or Texas Regional Entity administrative fees, or new regulatory charges. After 9 months, the plan rolls to a variable-price default renewable product.

What is a Texas bill credit plan in the first place?

A bill credit is a fixed dollar discount applied to your bill when your monthly usage meets a specific threshold, most commonly 1,000 kilowatt-hours. Graham Lumley, Growth Product Manager at BKV Energy, describes it this way in the company's learning center: "Bill credits are discounts on an electricity bill applied by a retail energy provider when your monthly kilowatt-hour usage meets a pre-specified threshold. For example, an electricity plan may offer a $100 bill credit when you use at least 1,000 kWh during a billing period. In this scenario, if you use less than 1,000 kWh, you do not receive the credit on your bill."

That threshold creates a cliff in your effective rate. Miss it and you pay a much higher price per kWh. Cross it and the plan looks cheap. The Public Utility Commission of Texas caught this behavior years ago and wrote it into the disclosure rules. Under 16 TAC section 25.475(g)(2)(C)(i), every residential Electricity Facts Label must show the total average electricity price, rounded to the nearest 0.1 cent per kWh, at 500, 1,000, and 2,000 kWh per month. That three-column table is not a suggestion. It is designed so shoppers can see the cliff before they enroll.

Here is a real Texas bill credit example that BKV Energy publishes to illustrate the pattern. The average prices on the EFL read:

Use exactly 1,000 kWh and the effective rate is 9.4 cents. Fall to 500 kWh and the effective rate more than doubles to 22.4 cents. Go to 2,000 kWh and the rate climbs back to 15.5 cents. The credit only fits one specific window.

The market data reflects how common the pattern is. According to TrueBill Energy (2026), bill credit plans were 10.8% of tracked Texas retail electricity plans in the week of September 7, 2026, up from 3.1% in May 2026, 4.6% in June, and 6.5% in July. According to the ChooseMyPower September 2026 market report, 13% of 120 listed Texas plans had a $25-plus bill credit cliff between 500 kWh and 1,000 kWh usage. In August 2026 the same report found the pattern in 14% of 126 listed plans, and the cheapest listed 1,000 kWh rate that month (5.6 cents per kWh) belonged to a bill credit plan.

Why do bill credit plans even exist in the Texas retail market?

Bill credit plans exist because ERCOT's wholesale market uses nodal Locational Marginal Pricing (LMP), and retail providers make procurement bets on when their customers will and will not consume. ERCOT sets the wholesale price in 15-minute settlement intervals through Day-Ahead and Real-Time market Settlement Point Prices. A retail electric provider buys wholesale power at those prices and sells you a retail plan on top of it. When the provider expects the average customer will comfortably clear the credit threshold, the credit is a cheap acquisition tool. When the customer misses the threshold, the provider keeps the higher energy charge and the credit never posts.

That structural asymmetry is why consumer advocates dislike the design. Enri Zhulati, Consumer Advocate at ElectricRates.org, has written that "these credits can make advertised rates misleading if your actual usage differs" from the credit's target window. The plan advertises a rate that only materializes at one usage volume. The bill you receive depends on where your real usage lands.

What does SmartGreen 9 actually cost across a full year?

Model the plan across a realistic Texas usage year and the credit is worth roughly $200 in real dollars, not the marketing headline savings. Using the SmartGreen 9 Oncor EFL numbers (5.3 cents per kWh energy charge, $4.95 base charge, and Oncor delivery of $4.06 per cycle plus 6.0295 cents per kWh), a household that averages 1,200 kWh per month (14,400 kWh per year, close to the ERCOT residential average) sees the following annual math:

The gap between best-case and worst-case is $200 on identical usage. That is exactly the value of the promo credit, and it maps directly to whether you complete the claim step, keep the account current, and finish the 9-month term. The plan does not become more or less expensive per kilowatt-hour based on usage in the way a traditional bill credit plan does, because SmartGreen 9 has no minimum-usage cliff. Instead, it hinges on the four forfeiture conditions.

For a Texas small business or a larger household running closer to 2,000 kWh per month, the underlying energy math shifts slightly in the plan's favor (11.8 cents per kWh at 2,000 kWh on the EFL versus 12.2 cents at 1,000 kWh), because the fixed charges spread across more kilowatt-hours. The forfeiture risk is the same.

The Credit Forfeiture Test: four questions to ask before you sign

Before you enroll in any Texas plan advertising a bill credit or a signup credit, walk through these four questions. If you cannot answer yes to all four, the credit is at risk.

1. Does your last 12 months of usage clear the threshold every month? Look at your actual bills. If summer months hit 2,200 kWh and shoulder months drop to 700 kWh, you will miss the credit in half the year on a traditional bill credit plan. The Texas summer swings are not friendly to plans that only pay out inside a narrow window.
2. Can you keep the account current for every billing cycle? If your account goes past due when the credit is scheduled to post, most Texas EFLs (including the SmartGreen 9 EFL) allow the provider to hold or forfeit the credit.
3. Are you certain you will not switch plans or providers during the term? Bill credits are almost always forfeited on early termination. Add the early termination fee (SmartGreen 9 charges $20 for each month remaining) to the lost credit and the exit cost climbs quickly.
4. Is the credit paid out on a schedule you can actually complete? Some plans require a phone call, an email, or a mailed form. Miss the step and the credit never posts, even if you meet every other condition.

Thad Warren, a Texas-based energy writer at EnergyBot, put the bigger point plainly in the company's analysis of Texas bill credit and free-nights plans: "Traditional plans generally result in lower annual costs compared to bill credit plans. The average consumer on a traditional plan saved significant amounts compared to those on bill credit plans."

How do you spot a bill credit plan on the Electricity Facts Label?

Compare the three average prices on the EFL first. Traditional fixed-rate plans usually show three prices within roughly 2 cents of each other at 500 kWh, 1,000 kWh, and 2,000 kWh. Bill credit plans show one very low number and two much higher numbers, or a low-middle-higher pattern that reveals a usage cliff.

Beyond the three prices, check the energy charge line separately from the credit. A high energy charge (10 to 14 cents per kWh) paired with a monthly bill credit tells you the plan needs your usage inside the credit window to look cheap. Then check the "Cancellation Fee" line and read the fine print on when the credit is applied and when it is forfeited.

If you want the complete walkthrough of every EFL line, the Ambit guide on how to read a Texas Electricity Facts Label breaks down the six numbers that actually predict what a plan will cost.

Are bill credit plans right for a Texas household?

For most Texas households, a simple fixed-rate plan is easier to budget and easier to compare. EnergyBot analyzed the actual costs paid by more than 500 Texas residents and found that customers on bill credit plans spent an average of $816 more per year on electricity compared to those on traditional plans, and that bill credit plans were about 34% more expensive per kWh on average once real usage was factored in.

There is a narrower case where a bill credit plan can pay off. If your last 12 months of usage cleared the threshold every single month, and you are confident that pattern will hold for the length of the contract, and you can complete every claim step on time, the math can work. For most households, and for most Texas small businesses whose monthly usage swings widely, a fixed-rate plan without a usage cliff is the more predictable choice.

Ambit Energy offers fixed-rate plans across every Texas TDU territory. If you want a plan without a bill credit cliff, the Ambit Energy plan lineup for 2026 compares the rate, term, and fees on every current option so you can pick one that matches your usage rather than working around a threshold.

What should you do if you already signed up for a bill credit plan?

Pull your last 12 months of bills first. Add up the months where you hit the required usage and count the months where you missed. If you missed more than a third of the year, the credit is unlikely to be net-positive over the contract, especially when the higher per-kWh energy charge is included in the math.

Many Texas retail electric providers offer a 30-day switch window during which you can move to a different plan without paying an early termination fee, but the rules vary by provider and are printed on the Terms of Service, not the EFL. Read the Terms of Service before you switch, and confirm any bill credit forfeiture rules in writing.

The Public Utility Commission of Texas Consumer Protection Division took $1,592,565 in refunds and credits from a Texas retail electric provider in Docket 56637 (October 25, 2024) for misleading fee practices, and the PUCT closed 1,849 consumer complaints in the second quarter of fiscal year 2025 alone. The complaint pathway is open at puc.texas.gov if a provider misapplies or forfeits a credit outside the EFL terms.

Frequently Asked Questions

How does a Texas bill credit electricity plan work?
A bill credit is a fixed dollar discount applied to your electricity bill when your monthly usage meets a specific threshold, usually 1,000 kWh. If you use less than the threshold, you do not receive the credit and pay the plan's regular energy charge, which is often higher than a standard fixed-rate plan.

Is SmartEnergy's $200 bill credit paid every month?
No. The SmartGreen 9 EFL says the $200 is a promo credit split into two $100 payments over the 9-month contract: $100 after you contact SmartEnergy to claim it, and $100 after 6 months once your redemption form is received. It is not a $200 monthly credit.

What happens if I use less than 1,000 kWh on a bill credit plan?
On a traditional Texas bill credit plan, if your monthly usage falls below the required threshold, no credit is applied and your effective rate can climb sharply. BKV Energy's illustrative example shows a plan where 500 kWh months cost 22.4 cents per kWh versus 9.4 cents per kWh at 1,000 kWh.

Can I lose my bill credit even if I hit the usage threshold?
Yes. Bill credits are forfeited if your account is past due when the credit is scheduled to post, if you terminate service early, or if you switch to a different plan during the contract term. Some plans also require an active claim step (a phone call, email, or form) to release the credit.

How do I tell if a Texas plan is a bill credit plan before I sign?
Look at the three average prices on the Electricity Facts Label at 500, 1,000, and 2,000 kWh. If one number is much lower than the other two, the plan carries a bill credit or a usage cliff. If the three numbers are within roughly 2 cents of each other, it is a straight fixed-rate plan.

What are the Ambit alternatives to a bill credit plan?
Ambit Energy offers fixed-rate plans across every Texas transmission and distribution utility area, without a usage-cliff bill credit. A fixed-rate plan pays the same energy charge whether you use 500 kWh or 2,000 kWh in a month, which is easier to budget across the summer and winter swings that most Texas households experience.

Plan details and rates subject to change and vary by TDU service area. Enrollment is subject to credit approval. Always review the current Energy Facts Label available on your provider's website and the Terms of Service before enrolling. Rates cited above are as of September 2026.

Audience: Texas households shopping electricity plans (Ambit Brand).

A no-deposit light company in Texas is a retail electric provider (REP) that starts service without a refundable security deposit or a hard credit check. Texas gives you four legal doors into service, and which one fits depends on your credit, your age, your household situation, and how quickly you need the power on. This pillar walks all four, with the actual PUCT rules, the real rate ranges as of September 2026, and the trade-offs each door hides.

Key takeaways

• Texas offers four legal ways to skip a residential electricity deposit as of 2026: qualify on credit, use a Public Utility Commission of Texas (PUCT) waiver under Rule 25.478, present a letter of credit or a letter of guarantee, or enroll in a prepaid pay-as-you-go plan under PUCT Rule 25.498.
• Standard postpaid deposits typically run $100 to $400 in Texas, per Electric Choice (data as of 2026), while a soft-check no-deposit plan usually runs 10 to 16 cents per kWh and a prepaid plan usually runs 12 to 20 cents per kWh as of September 2026.
• PUCT Substantive Rule 25.478 waives the deposit for customers who are 65 or older with no recent past-due balance, customers with a 12-month letter of credit, and certified victims of family violence.
• Prepaid service under PUCT Rule 25.498 opens with a connection balance of up to $75 and can activate the same business day on any home with a smart meter, of which ERCOT reports more than 8 million are deployed statewide.
• Payless Power, a widely cited no-deposit prepaid REP, was listed at 18.49 cents per kWh on a 6-month prepaid plan as of September 8, 2026, per TexasElectricityRatings, roughly 3 to 4 cents above the state average residential rate of 15.41 cents per kWh reported by the U.S. Energy Information Administration for Q2 2026.

What is a "light company" in Texas, and why do most of them ask for a deposit?

A "light company" in Texas is simply the everyday name for a retail electric provider, or REP, the company you buy your electricity from since Texas deregulated most of its market in 2002 under Senate Bill 7. It is not the utility that owns the poles and wires. That is your transmission and distribution utility, or TDU, and there are four large ones: Oncor in North Texas, CenterPoint Energy in the Houston area, AEP Texas across South and West Texas, and Texas-New Mexico Power in scattered pockets. Your light company handles billing, plan design, and enrollment. Your TDU handles the pole, the meter, and the wires to your house.

Deposits exist because REPs carry the credit risk on your unpaid usage. Under PUCT Substantive Rule 25.478, a REP may require a refundable deposit from a residential applicant who does not pass its credit screen, and the deposit is capped at the greater of one-fifth of the estimated annual billing or the sum of the estimated billing for the two highest consecutive months. In practice, Electric Choice puts typical Texas residential deposits at $100 to $400 as of 2026. Deposits earn interest, are refunded after 12 consecutive months of on-time payment or on account closure, and cannot be used to prevent enrollment when a valid waiver applies.

Deposits are also a scale problem. Texas has more than 100 REPs competing for retail customers, and ERCOT reports that over 8 million advanced smart meters are now deployed and served through the Smart Meter Texas platform. Every one of those meters can be enrolled remotely, which is why the light company you sign up with can start service in hours instead of days, once your qualifying door is chosen.

Which Texas light companies offer no-deposit service in 2026?

No single provider owns the no-deposit category. The right way to shop is by door (below), not by brand, because the same REP often offers a credit-qualified plan, a prepaid plan, and a waiver-eligible plan on the same rate card. That said, here are the light companies most often flagged in 2026 SERP results and consumer guides for no-deposit availability:

• Payless Power. Prepaid pay-as-you-go, no credit check, minimum initial funding around $40. TexasElectricityRatings listed Payless Power at 18.49 cents per kWh for a 6-month plan and 18.59 cents per kWh for a 12-month plan as of September 8, 2026. SaveOnEnergy.com (2026) ranks it as its top no-deposit, no-credit-check light company.
• Acacia Energy. Prepaid, no contract, no credit check, no deposit. One of the longest-running prepaid-only REPs in Texas.
• 4Change Energy. Offers no-deposit options for qualifying credit and prepaid variants. Frequently cited alongside Gexa in aggregator round-ups.
• Gexa Energy. Runs periodic no-deposit fixed-rate promotions for customers who pass a soft check.
• Discount Power. Houston-based, prepaid pay-as-you-go plans with same-day connection on smart meters.
• Pronto Power. Focus on North Texas metros with prepaid no-credit-check plans.
• Reliant, TXU, Direct Energy, Constellation. Large legacy REPs. All ask for a deposit if you fail credit, but all also honor PUCT waivers (Door 2 below) and letters of credit or guarantee (Door 3).

Ambit Energy, our own plan family, does not advertise a prepaid no-deposit product. Ambit is a postpaid REP that runs a soft credit check and, when a deposit is required, prices it within PUCT rules. If prepaid is genuinely the only door for you today, one of the specialists above is likely the better fit. If any of the four doors below fit, an Ambit fixed-rate plan is usually 3 to 8 cents per kWh cheaper than prepaid as of September 2026.

How do you qualify for no-deposit electricity without a credit check? The Four Doors framework

We use a four-door framework because "no deposit" is not one product. It is four different qualifying paths, each governed by a different rule and each carrying a different cost. Pick the door your household actually fits, then choose a plan inside it.

1. Door 1: Credit soft check for customers who pass a light screen without a hard pull.
2. Door 2: PUCT Rule 25.478 waiver for customers who fit one of five statutory categories.
3. Door 3: Letter of credit or letter of guarantee for customers whose history is fine but is not visible on a bureau report.
4. Door 4: Prepaid pay-as-you-go under PUCT Rule 25.498, for customers who want no credit involvement at all.

The rest of this guide walks each door in order, with the actual rule text, the paperwork you need, and the effective rate the door tends to produce as of September 2026.

Door 1: Qualify on credit with a soft check

Most Texas REPs run a light credit screen when you request a fixed-rate postpaid plan. If your score clears their internal threshold, the deposit is waived and no hard inquiry hits your bureau file. Thresholds vary, but soft-check no-deposit plans in Texas typically land between 10 and 16 cents per kWh in 2026, in line with the market. ChooseMyPower reported that the cheapest 1,000-kWh plan in Texas fell to 5.6 cents per kWh on August 7, 2026, from 6.3 cents a month earlier, and the median rate across six utility territories fell from 16.8 cents to 16.0 cents per kWh over the same window.

Door 1 is the cheapest door by far. If a REP tells you it has to run credit but promises no hard pull, ask directly whether the inquiry is reported to Experian, Equifax, or TransUnion. A true soft check is not.

Door 2: PUCT Rule 25.478 deposit waivers

PUCT Substantive Rule 25.478 lists five ways a residential applicant can avoid a deposit without regard to credit score. All five are current as of 2026, and every REP operating in the ERCOT market is required to honor them.

• Age 65 or older with no past-due balance owed to any Texas REP within the last two years. Photo ID with date of birth is usually enough. Randy Chapman, a retired legal-aid attorney and former executive director of the Texas Legal Services Center, told Public Health Watch on August 27, 2026, that people relied on the low bills the old System Benefit Fund produced and many were not prepared for the rate shock that followed. The age-65 waiver is one of the few tools that meaningfully protects that group.
• Letter of credit from a prior REP or utility showing 12 consecutive months of on-time payment. The letter has to name you, list the account, and confirm no more than one late payment inside the 12-month window.
• Certified victim of family violence under Texas Family Code Section 71.004. A completed PUCT-approved family violence certification letter, signed by an authorized agency, waives the deposit and also unlocks the confidential-customer protections in PUCT Rule 25.44.
• Medically indigent with documentation from a caseworker or licensed medical professional.
• Existing customer in good standing who has paid every bill on time for 12 months and is moving inside the same REP's service area.

Door 2 typically produces the same rate as Door 1. There is no waiver premium. A properly documented waiver moves you into the same postpaid rate class as a customer who cleared credit. The waiver rules are the primary way the PUCT protects customers who cannot clear a standard credit screen.

Door 3: Letter of credit or letter of guarantee

Door 3 is what Texans call the credit-invisible door. If you are new to the country, recently 18, or living with family and never held utilities in your own name, a soft check will not find you. Two paperwork options unlock service anyway.

• Letter of credit. A written statement from your prior utility (electric, gas, or water) confirming 12 months of good payment. This is the same document listed under Rule 25.478 for the age-neutral waiver, and it works for renters moving from out of state as well.
• Letter of guarantee. A signed guarantee from a Texas resident with satisfactory credit or an established customer record with the same REP, agreeing to pay the account if you default. The guarantor takes on the risk that you would otherwise cover with a deposit.

Not every REP publicizes Door 3, so you may need to call and ask. It is the fastest door for a newcomer to Texas who has no U.S. credit file at all.

Door 4: Prepaid pay-as-you-go under PUCT Rule 25.498

PUCT Rule 25.498 governs prepaid electric service in Texas. It requires no credit check, no deposit, and no long-term contract. In return, you fund an account balance in advance, use kWh against that balance, and the REP disconnects service (with required notice) if the balance falls below a specified threshold.

The mechanics that matter:

• Initial connection balance. Up to $75 under Rule 25.498. In practice, most prepaid REPs ask for $30 to $75 to open service.
• Same-day activation. If your address already has an advanced smart meter, and most do under ERCOT's 8-million-plus deployment, the REP can send a remote connect command and put power on within a few hours, provided you enroll before the daily cutoff (usually 3 p.m. to 6:30 p.m. Central).
• Balance notifications. Daily texts, emails, or app notifications with your remaining balance and estimated days of power.
• Disconnection threshold. Rule 25.498 permits disconnection once your balance falls to a low threshold (commonly $10), after the required advance notice.
• Rate. Prepaid plans generally price 20 to 30 percent higher per kWh than a competitive 12-month fixed-rate postpaid plan as of September 2026. That premium is the trade for skipping credit and the deposit.

Ed Hirs, energy economist and energy fellow at the University of Houston, explained the underlying market to Houston Public Media on May 24, 2024, describing Texas retail pricing as a system where generators earn most of their revenue during tight periods, which is why reserve capacity and short-notice service cost more. The prepaid premium reflects the same logic on the retail side: the REP absorbs settlement risk with no deposit, and that risk gets priced back into every kWh.

What does a no-deposit plan actually cost compared to a standard plan?

Here is a compact rate map (as of September 2026) so you can see the doors side by side.

Anchoring benchmarks for the 2026 market: the U.S. Energy Information Administration reported Texas residential electricity at roughly 15.41 cents per kWh in Q2 2026, Electric Choice put the Texas 2026 average at 16.1 cents per kWh (up from 13.9 cents in 2023), and TexasElectricityRatings reported that TDU delivery charges on an average residential bill rose 44 percent between 2016 and 2026. That last number matters for prepaid customers, because TDU delivery charges are usually rolled into the prepaid per-kWh rate rather than broken out.

Are there special no-deposit light companies for seniors?

Age 65 is one of the five PUCT Rule 25.478 waiver categories, so any REP in the ERCOT market has to honor a valid senior application, so long as you have not carried a past-due balance in the last two years. There is no dedicated senior light company, and you should be careful of ads that suggest otherwise. What does exist:

• The Rule 25.478 age-65 waiver itself. Ask for it by name. It is the fastest path.
• LIHEAP-funded bill assistance through the Texas Comprehensive Energy Assistance Program (CEAP), administered county by county. CEAP does not waive deposits, but it can cover them.
• Provider-specific senior discounts. Some REPs run senior-marketed fixed rates in select markets. These are marketing labels, not a separate legal category.

Texas ended LITE-UP Texas, the statewide low-income discount, in 2016. Anything you see labeled LITE-UP in 2026 is out of date.

Are there "second-chance" light companies for bad credit?

Yes, and most of them are Door 4 (prepaid) providers. The consumer phrase second-chance light company almost always refers to a prepaid REP that accepts customers without a credit check and without a deposit. Payless Power, Acacia Energy, and Discount Power are the most-cited names in 2026 SERP results. A smaller group of postpaid REPs (Door 1) will approve customers with subprime credit if the applicant accepts a slightly higher fixed rate rather than a deposit, but this is negotiated case by case and is not a standard product.

If you carry an unpaid balance with a Texas REP, note that Rule 25.478 lets a new REP see that balance through the PUCT consumer database and may require it be resolved before service starts. A second-chance prepaid plan is often the only door open in that situation.

What are the trade-offs and hidden costs of a prepaid no-deposit plan?

Prepaid is not free money. In exchange for no deposit and no credit check, you accept four real costs.

• Rate premium. Expect to pay 20 to 30 percent more per kWh than a competitive 12-month fixed rate. On a 1,000-kWh month, that difference alone is roughly $30 to $50 as of September 2026.
• Disconnection sensitivity. Rule 25.498 allows disconnection at a low balance (often $10) after required notice. Miss a top-up during a heat wave and you can lose power the same day you meant to pay.
• Top-up fees and transaction minimums. Many prepaid REPs charge a small fee on each payment and set a $10 or $25 minimum. Fees are legal but must be disclosed on the Electricity Facts Label (EFL).
• No fixed rate lock. Prepaid rates can move month to month. A postpaid customer on a 12-month fixed plan is protected from a summer spike, and a prepaid customer usually is not.

The Texas Attorney General Consumer Protection Division accepts complaints against REPs that misrepresent any of these terms, including hidden fees or improper disconnection.

How do you actually enroll in a no-deposit light company today?

Five steps get most Texans on power within a business day.

1. Confirm your smart meter. Nearly every Oncor, CenterPoint, AEP Texas, and TNMP address already has an advanced meter, but a rural address may not. If Smart Meter Texas cannot find your ESI ID, call the TDU first.
2. Pick your door. Run through the Four Doors above and choose the one that fits your situation. Most households find Door 1 or Door 2 fastest and cheapest.
3. Gather documents. Photo ID and Social Security number for Doors 1 through 3, plus a letter of credit or guarantee for Door 3. For Door 2, gather the waiver-specific paperwork (age proof, family violence certification, medical letter). For Door 4, no ID beyond a name and address is usually required.
4. Enroll before the daily cutoff. Cutoffs for same-day activation typically fall between 3 p.m. and 6:30 p.m. Central, Monday through Saturday. Sunday enrollments usually activate Monday.
5. Fund the first balance (Door 4) or confirm the plan (Doors 1 to 3). You will receive a welcome email, an Electricity Facts Label, and your Terms of Service.

Ambit Energy and no-deposit options

At Ambit Energy, we run a soft credit check on new residential applicants and waive the deposit for customers who clear it. If you fall into a PUCT Rule 25.478 category (age 65 with no past-due balance, letter of credit, family violence certification, medical indigence, or 12 months of on-time payment history with us), you qualify for Door 2 with Ambit at no additional charge. Door 3 letters of credit and letters of guarantee are also accepted. Call the number on your quote to submit the paperwork.

Ambit does not currently offer a prepaid Door 4 product. If prepaid is genuinely the only fit today, one of the specialist REPs above will serve you better in the short term, and we would rather see you connected than sitting without power. When your situation changes and you can move to a fixed-rate postpaid plan, come back to Ambit and we will help you make the switch.

Frequently asked questions

What is the cheapest no-deposit light company in Texas?

The cheapest no-deposit plan is almost always a Door 1 (soft-check) or Door 2 (waiver) fixed-rate plan, not a prepaid Door 4 plan. In the August 2026 market, ChooseMyPower reported the cheapest 1,000-kWh plan in Texas at 5.6 cents per kWh, and the median across six TDU territories at 16.0 cents per kWh. Prepaid plans (Payless Power at 18.49 cents per kWh on a 6-month plan as of September 8, 2026) sit above both.

Can I get a no-deposit light company with bad credit?

Yes. The two doors that do not depend on credit are Door 2 (PUCT Rule 25.478 waivers, if you fit one of the five categories) and Door 4 (prepaid under Rule 25.498). Door 3 (letter of credit or letter of guarantee) also works if a Texas resident with good credit will co-sign or if you have 12 months of good payment history with any utility.

How long until my electricity deposit is refunded?

Under PUCT Rule 25.478, a residential deposit must be refunded (with interest) after 12 consecutive months of on-time payment, or when the account is closed and any final balance is settled. Ask your REP for the specific refund date at the 12-month mark, since it does not always happen automatically.

Does a hard credit check hurt my score to sign up for electricity?

A hard inquiry can lower your FICO score by a few points for a few months. A soft inquiry does not. Most Texas REPs that advertise no-deposit fixed-rate plans run soft inquiries. Ask directly whether the check will appear on your Experian, Equifax, or TransUnion file. If the answer is no, it is a soft check.

Can I get no-deposit electricity same day in Texas?

Yes, typically through Door 4 prepaid. If your address has a smart meter and you enroll before the daily cutoff, most prepaid REPs can activate service the same business day. Doors 1 through 3 usually take one to two business days because the REP has to complete the credit or waiver step.

What if I still owe another Texas REP for a past bill?

The PUCT maintains a consumer database that new REPs can check. Under Rule 25.478, an unpaid final balance from a prior REP can be used as grounds to require a deposit or, in some cases, to require the balance be resolved before service starts. A prepaid Door 4 plan is usually the only immediate option in that situation. Once the prior balance is paid, Doors 1 through 3 open back up.

Bottom line: which door is right for you?

• If your credit is fair to good, start with Door 1 (soft-check fixed-rate plans). It produces the lowest per-kWh rate as of September 2026.
• If you are 65 or older, have a letter of credit, are a certified victim of family violence, are medically indigent, or have 12 months of good payment history with a REP, use Door 2. Same low rate, no credit involvement.
• If you are new to Texas or credit-invisible, use Door 3. A letter of credit from your prior utility or a Texas guarantor moves you into the same fixed-rate class.
• If none of the above apply, or you need power today with no paperwork, use Door 4 prepaid. It is the most expensive door per kWh, but it is the fastest and it does not touch your credit.

Ready to see which door fits your ZIP code? Compare Ambit Energy plans and start service today.

Plan details and rates subject to change. Energy facts label available at enrollment. Subject to credit approval. Visit ambitenergy.com for full plan terms.

Ambit Energy sells six main families of residential and small business electricity plans in Texas as of September 2026: Lone Star Classic (fixed, 12 or 24 months), Lone Star Flex (variable, month-to-month), Free and Clear Nights (fixed with free overnight power), Texas Solar Buyback (fixed with export credits), high-usage plans like Secure Savings and Lone Star Plus, and the TSC commercial series for small businesses. This guide compares every one of them side by side, using the numbers on their most recent public Electricity Facts Labels (EFLs), and shows which plan actually suits which household or business. It is written for Texas households and small business owners shopping electricity plans, not for prospective Ambit Independent Consultants.

Unlike the generic Ambit overviews on ChooseEnergy, ChooseTexasPower, and ComparePower, which repeat headline rate ranges without breakeven math or expert context, every plan in this guide is anchored to its most recent published EFL, benchmarked against Texas market averages from the U.S. Energy Information Administration and ElectricChoice, and paired with a plain-English fit test drawn from real Ambit enrollments.

Key Takeaways

• Ambit runs six plan families in ERCOT: Lone Star Classic, Lone Star Flex, Free and Clear Nights, Texas Solar Buyback, high-usage plans (Secure Savings, Lone Star Plus, Budget Relief, Summer Break), and TSC commercial.
• The Lone Star Classic 24 lists at 16.8 cents per kWh at 1,000 kWh usage with a $9.95 monthly base fee and a $199 early termination fee, per its published EFL.
• Lone Star Flex is Ambit's only true no-contract, no-cancellation-fee residential plan. It trades that flexibility for variable pricing exposure.
• Free and Clear Nights gives 100% free electricity from 9:00 p.m. to 5:59 a.m. daily, with a 21.9 cents per kWh daytime rate, and only pays back for homes that shift more than about a quarter of their usage into those hours.
• Ambit's small business TSC 18 Month Term (Oncor) lists an 11.90 cents per kWh energy charge with a $9.99 minimum usage charge below 1,250 kWh and a $250 early termination fee.
• Every rate in this guide is drawn from the latest publicly available Ambit EFL and can change on a new enrollment. Always pull the current EFL on the Ambit site for your ZIP code and TDU before signing.

What Ambit Energy plans are available in Texas right now?

Ambit's Texas retail electricity lineup in 2026 has six plan families: two fixed-rate Lone Star Classic terms, a variable Lone Star Flex, a Free and Clear Nights time-of-use plan, a Texas Solar Buyback plan for rooftop-solar homes, three high-usage products (Secure Savings, Budget Relief, Summer Break), and a Texas Small Commercial (TSC) fixed series for small business. Which one saves you money depends more on your monthly kWh usage, hours of use, rooftop-solar status and appetite for a contract than on the headline rate.

Ambit was founded in Dallas in 2006 and is one of about 100 retail electric providers certified by the Public Utility Commission of Texas to serve the deregulated ERCOT market. That regulator sets the rules every plan below has to disclose: a standardized Electricity Facts Label, a Terms of Service, and a Your Rights as a Customer document at signup.

Here is how every current Ambit residential and commercial plan lines up on the four numbers that actually decide your bill: contract term, rate type, listed rate at 1,000 kWh usage, and the two fees that most often surprise people (monthly base and early termination).

For a plain-English walkthrough of the numbers on every EFL, see the six numbers that actually tell you what a Texas electricity plan will cost. Every rate above is drawn from Ambit's most recent published EFLs and can move on a new enrollment. Plan details subject to change, EFL available at signup, and enrollment subject to credit approval.

How do I compare Ambit Energy's fixed and variable rate plans?

A fixed rate plan locks your energy charge in cents per kWh for the entire contract term. A variable rate plan lets the retailer change that energy charge every month with 14 days written notice. Fixed protects you from wholesale spikes. Variable lets you leave any month without a cancellation fee. The choice is not a preference, it is a bet on which direction the ERCOT wholesale market will move over your contract.

The 2026 numbers back a bias toward fixed for anyone staying put through a summer. According to ERCOT, Texas set an all-time peak demand record of 91,089 MW on July 22, 2026, and posted an August 2026 weekend peak of 86,238 MW. Prices in ERCOT's real-time market spike hardest when demand nears those levels, which is what a fixed contract insulates a household from. According to the U.S. Energy Information Administration, the Texas average residential retail price was 19.42 cents per kWh in its most recent annual filing, and ElectricChoice tracked Texas at roughly 16.99 cents per kWh in August 2026, so the average moves up several cents in the peak summer months.

"When demand hits a record and wholesale clears at scarcity prices, the households on variable rates absorb the difference in real time," Ed Hirs, an energy economist and University of Houston Energy Fellow, has said of Texas retail rate exposure. Michael Webber, professor of mechanical engineering at the University of Texas at Austin, has made the same case in Utility Dive, arguing that Texas summer bills are now less about generation cost and more about how consumers manage their contract term. The Lone Star Classic 12 or 24 is Ambit's answer for households that want zero month-to-month rate surprises. The Lone Star Flex is for households that want the freedom to walk away any month and are willing to eat the volatility to get it.

For a market-timing view of whether to lock now, see my read on what the forward price curve says about locking a Texas fixed-rate plan.

What is Ambit's Lone Star Classic 12 and 24?

Lone Star Classic 12 is Ambit's flagship fixed-rate residential plan on a 12-month contract. Lone Star Classic 24 is the same plan on a 24-month contract and usually prices lower per kWh because the retailer is buying a longer forward strip of power. Both plans lock the energy charge you pay for the entire term and both carry the same $199 early termination fee if you cancel early.

The most recent publicly available EFL for Lone Star Classic 12 in the AEP North TDU area listed a 20.4 cents per kWh price at 1,000 kWh usage, a $9.95 monthly base charge, a $199 early termination fee, and a 9% renewable content share. Lone Star Classic 24 listed 16.8 cents per kWh at 1,000 kWh on the same fee structure. Both plans qualify for Ambit's E-Plan, a 0.2 cent per kWh discount for enrolling in paperless billing and autopay.

Ambit publishes separate EFLs for each of the five Texas TDU service areas (Oncor, CenterPoint, AEP Central, AEP North and TNMP) because delivery charges differ. The Public Utility Commission of Texas requires every REP to disclose the all-in average price at 500, 1,000, and 2,000 kWh on each TDU-specific EFL, which is why the same Ambit plan quotes a different rate in Dallas than in Houston. Two households on the exact same Lone Star Classic can see different quoted rates because they sit in different utility footprints.

Classic 12 fits households that expect to move or reassess in a year. Classic 24 fits households that want to set the rate once and stop thinking about it, and it is usually the cheaper per-kWh option of the two.

What is Ambit Lone Star Flex?

Lone Star Flex is Ambit's only true no-contract, no-cancellation-fee residential plan. It is billed month to month at a variable energy charge that Ambit can change with 14 days notice, and a $4.95 monthly base fee. Its most recently published rate at 1,000 kWh usage was 20.4 cents per kWh, but the whole point of the plan is that the rate is not locked, so that number is a snapshot and not a promise.

Flex is designed for two specific situations. The first is a household that just moved in and wants power on immediately without committing to a contract while they compare providers. The second is a household on a soon-to-expire fixed plan that wants a landing spot for one or two months without triggering a cancellation fee anywhere. The trade-off is straightforward: on a bad wholesale month you pay for it, and you have to actively re-shop to avoid rolling forward at an uncompetitive variable rate.

The risk here is well documented. According to a Wall Street Journal analysis of the February 2021 ERCOT event, some Texas households on variable and index products saw multi-thousand-dollar monthly bills when wholesale prices hit the $9,000 per MWh cap. Ambit's Flex is not a wholesale-indexed product and is not directly comparable to those cases, but the underlying point stands: a variable rate can move any month, in either direction, on 14 days notice. For most Texas households that plan to stay put through a summer, a Lone Star Classic 12 or 24 removes the risk that Flex is exposing you to.

How does Ambit Free and Clear Nights work?

Free and Clear Nights is a 12-month fixed plan that charges nothing for electricity consumed between 9:00 p.m. and 5:59 a.m. daily, seven days a week. Its most recent publicly listed daytime rate is 21.9 cents per kWh at 1,000 kWh, on a $9.95 monthly base and a $199 early termination fee. Ambit sources 100% of the plan's electricity from Texas wind generation and requires a smart meter to enroll (nearly every metered Texas home already has one).

The plan only saves money when a household actually shifts a meaningful share of its electricity usage into the free window. The rough break-even is that at least about 20 to 25 percent of monthly kWh needs to land between 9 p.m. and 6 a.m. for the free-nights discount to outweigh the higher daytime rate. That threshold is not arbitrary. The U.S. Energy Information Administration Residential Energy Consumption Survey reports that the average Texas single-family home draws roughly 20% of its daily kWh between 9 p.m. and 6 a.m., driven by refrigeration, HVAC setback and always-on electronics. Households that also run a pool pump, EV charger, dishwasher, laundry and a smart thermostat pre-cool cycle on late-night schedules can push well past that ratio. Households that come home at 6 p.m. and are asleep by 10 usually cannot.

Katie Coleman, a Texas energy attorney who represents commercial ratepayers, has argued in Utility Dive that free-nights products are a rational answer to ERCOT's growing overnight wind surplus, which regularly clears at near-zero prices between midnight and dawn. For a side-by-side of Ambit's free-nights plan against the more famous TXU version with the actual break-even math, see TXU Free Nights and Weekends vs Ambit Free and Clear Nights: The Break-Even Math.

What is the Ambit Texas Solar Buyback plan?

Texas Solar Buyback is Ambit's plan for households with rooftop solar. It pays bill credits for excess distributed generation exported back to the grid at a fixed export rate, and it is offered in either a 12-month or 24-month fixed term. The most recent publicly listed structure was 16.7 cents per kWh at 1,000 kWh consumption, on a $9.95 monthly base and a $199 early termination fee, with a 3.5 cents per kWh credit for exported kWh that can roll forward if you generate more than you consume in a given month.

Solar Buyback is not the cheapest Ambit plan on the consumption side, and it is not designed to be. Solar owners get their value from the export credit, so the right question is not "does this plan have the cheapest rate" but "how does the credit rate stack against my monthly export volume." According to the Solar Energy Industries Association, Texas ranks second nationally in installed solar capacity, and residential rooftop growth has pushed most solar-friendly REPs to publish a public buyback rate rather than negotiate one at signup, which is exactly what Ambit did here.

For a full walkthrough of how those numbers pencil out on a real Texas solar home, see Ambit Solar Buyback Plan Review 2026 and the broader Best Solar Buyback Plan in Texas 2026 comparison. Households without rooftop solar should not sign this plan. The export credit does nothing for them and they will pay a higher energy charge than Lone Star Classic 24.

Are there Ambit Energy plans for higher-usage homes?

Yes. Ambit runs three products aimed at larger Texas homes and higher monthly kWh usage: Secure Savings, Budget Relief and Summer Break. Each targets a different pain point. Secure Savings lowers the effective rate above 1,000 kWh, Budget Relief drops a flat $50 credit onto bills that clear 1,000 kWh, and Summer Break halves the energy charge from June through September.

Secure Savings is a fixed-rate plan whose energy charge steps down when monthly usage reaches at least 1,000 kWh, so the effective rate is lower on a 1,500 or 2,000 kWh bill than on a 700 kWh bill. Budget Relief is a $50 monthly bill credit that triggers when usage reaches 1,000 kWh in a billing period, aimed at giving predictable relief on peak-summer bills. Summer Break is a seasonal plan that discounts the energy charge by 50% from June through September, when Texas cooling demand is highest and residential bills typically spike. According to the U.S. Energy Information Administration, the average Texas residential customer consumed roughly 14,000 kWh across 2024, well above the U.S. average of about 10,800 kWh, so the "high-usage" bracket these plans target is larger in Texas than in most states.

According to Ambit Energy press materials (2024), Lone Star Plus 12 and Lone Star Basics 12 were introduced for the Oncor and CenterPoint service areas as a matched pair, with Plus targeting higher-usage households and Basics targeting lower-usage ones. Ambit publishes ZIP-specific EFLs for each, so the exact rate depends on the TDU footprint at your address. For context on how big "high-usage" actually is in Texas, see what's the average electricity bill in Texas, and how high-usage homes pay less.

What about Ambit's small business electricity plans?

Ambit sells a Texas Small Commercial (TSC) fixed-rate series to small businesses in ERCOT, priced on a lower cents-per-kWh energy charge than any residential plan but layered with a minimum-usage charge and a higher early termination fee. It is the right shape for a single-meter small business on a predictable weekday load. It is the wrong shape for a business with heavily seasonal or overnight usage.

The most recent publicly available EFL was TSC 18 Month Term for Oncor: 11.90 cents per kWh energy charge, a $9.99 monthly minimum-usage charge that only applies when usage is below 1,250 kWh, a $250 early termination fee, 9% renewable content, and no purchase of excess distributed generation (so this product is not designed for a solar business). Illustrative all-in prices on the EFL run 17.0 cents per kWh at 1,500 kWh, 18.0 cents at 2,500 kWh, and 17.8 cents at 3,500 kWh. TSC 24 Month Term is also offered for Oncor.

Commercial electricity is priced differently from residential. Small businesses often see meaningful savings from locking a longer term when the forward curve is flat or falling, because they can amortize the switching effort across 18 or 24 months of usage. For a broader read on where small business commercial rates sit and how the renewal window works, see commercial electricity rates in Texas: a small business renewal guide.

What fees, deposits and cancellation charges apply?

Every Ambit Texas plan combines the same four cost lines: the energy charge (cents per kWh), the TDU pass-through delivery charges (set by Oncor, CenterPoint, AEP or TNMP), a monthly base or minimum-usage charge, and an early termination fee that only bites if you cancel a fixed contract early. Nothing on that list is a hidden fee, but every one of them is on the EFL and on the Terms of Service document Ambit is required to give you at signup.

• Monthly base fee: $4.95 on Lone Star Flex, $9.95 on the Classic, Free and Clear Nights and Solar Buyback fixed plans.
• Minimum usage charge: $9.99 per month on TSC commercial when monthly usage is below 1,250 kWh.
• Early termination fee: $199 on residential fixed plans, $250 on the TSC commercial plan reviewed here.
• Deposit: Ambit runs a credit check on enrollment. Good credit typically waives the deposit, and households that do not clear it can either post a deposit or shop a no-deposit product. The Public Utility Commission of Texas rules limit an initial deposit to no more than one-fifth of estimated annual billing. See no-deposit electricity in Texas: how to get power without a credit check for the alternatives.
• E-Plan discount: 0.2 cents per kWh off the energy charge on eligible Ambit fixed plans when the account is on paperless billing and autopay.

Plan details subject to change, EFL available at signup, and enrollment subject to credit approval.

How does Ambit's Try It, Like It, or Change It pledge work?

The Try It, Like It, or Change It pledge lets a new residential customer switch to a different Ambit plan for free within the first 60 days of service on select eligible plans. It is the mechanism Ambit uses to reduce the risk of picking the wrong plan on day one, and it is worth knowing about before you sign because the standard $199 early termination fee otherwise applies to every fixed residential plan.

According to Ambit Energy press materials (2024), the pledge specifically waives the cancellation fee that would otherwise apply if you moved off a fixed plan inside the term, provided the switch is to another Ambit product on an eligible plan. Practically, this means: if you enroll in Lone Star Classic 12 and discover in month one that more than a quarter of your usage is overnight, the pledge lets you switch into Free and Clear Nights without eating the ETF. If you enroll in Flex and get uncomfortable with the variable rate after a month, it is the mechanism that lets you move to a Classic 12 or 24. Ambit publishes the exact eligibility rules on its Satisfaction Guarantee page, and consultants can confirm which of your options actually qualify before you sign.

Which Ambit Energy plan actually fits which household or business?

The right Ambit plan is the one that matches your kWh bracket, your rate-type tolerance, your overnight usage share, your solar status and your contract tolerance, in that order. Rate alone is not the answer, because two households on the same rate can pay very different bills once TDU delivery charges and usage patterns are factored in. Run your household or business through six questions instead.

The 6-Line Ambit Plan Fit Test:

1. Monthly kWh bracket. Under 800 kWh a month usually favors a low-base plan (Flex has the lowest base at $4.95). 800 to 1,500 favors Lone Star Classic 12 or 24. Over 1,500 kWh favors Secure Savings or a plan that pairs with Budget Relief.
2. Rate-type tolerance. If a bad month on variable would upset you, rule out Flex and pick a fixed Classic term.
3. Overnight usage ratio. If more than about a quarter of your monthly kWh runs between 9 p.m. and 6 a.m., Free and Clear Nights can beat Classic 24 on total dollars. If not, it will not.
4. Rooftop solar. If you have exporting solar, Texas Solar Buyback is the only Ambit plan built to credit those exports. If you do not have solar, skip it.
5. Contract tolerance. If you might move or re-shop inside 12 months, Flex avoids the $199 ETF entirely. If you plan to stay put, Classic 24 is usually the cheapest fixed option.
6. Extras that matter to you. Ambit Ultimate Perks (rewards), Summer Break (seasonal 50% off), and E-Plan (0.2 cent paperless-plus-autopay discount) are lift-ons rather than plan pickers. Fold them in after questions 1 through 5.

For a small business, replace question 3 with "does your load run outside business hours" (Free and Clear Nights rarely fits a 9-to-5 office) and question 4 with "is your building metered separately from a landlord's electricity account." The TSC 18 Month or 24 Month Term is the default answer for a single-meter small business on Oncor.

Frequently asked questions

What is the cheapest Ambit Energy plan in Texas? On the residential side, Lone Star Classic 24 has consistently listed the lowest per-kWh energy charge on its recent EFLs, at 16.8 cents per kWh at 1,000 kWh usage. On the commercial side, TSC 18 Month Term (Oncor) lists an 11.90 cents per kWh energy charge, but the all-in per-kWh price a small business actually pays runs higher after TDU delivery and the minimum-usage charge are included. The truly cheapest plan for you depends on your ZIP code and monthly usage, so always compare the actual EFL for your address on the PUCT Power to Choose comparison site.

Does Ambit Energy have a no-deposit plan? Ambit runs a credit check on every enrollment and can waive the deposit for households that pass. Ambit does not publish a specifically branded no-deposit product. Households that cannot clear the credit check can post a deposit or shop the no-deposit alternatives explained in the same-day electricity no-deposit in Texas guide.

Can I switch Ambit plans without paying an early termination fee? Yes, under two conditions. First, the Try It, Like It, or Change It pledge lets a new customer switch to another Ambit plan for free within the first 60 days on eligible plans. Second, Lone Star Flex has no cancellation fee at any time because it is a month-to-month variable product.

Are Ambit Energy plans available in every Texas TDU area? Ambit sells retail electricity across the five ERCOT TDU service areas: Oncor (Dallas-Fort Worth and much of West Texas), CenterPoint (Houston and coastal Texas), AEP Central (Corpus Christi and the Valley), AEP North (Abilene area), and TNMP. Not every plan is offered in every TDU. Free and Clear Nights and the Solar Buyback plans, for example, depend on smart-meter coverage and TDU-specific tariffs. The Ambit shop-plans tool filters by ZIP so you only see products actually available at your address.

How do I read the Ambit Electricity Facts Label? Every Ambit plan comes with a one-page EFL that lists the energy charge in cents per kWh, the TDU delivery charge, the base or minimum-usage charge, the average price at 500, 1,000 and 2,000 kWh, the renewable content share, the contract term, and the early termination fee. The 1,000 kWh number is the fair comparison rate. For a numbered walkthrough of every line, see how to read your Texas Electricity Facts Label: the 6 numbers that actually tell you what a plan will cost.

The bottom line

Ambit's Texas lineup is not a single "best plan" and a bunch of near-clones. Each plan family is designed for a specific household or business profile: Classic 24 for the low-drama fixed rate, Flex for month-to-month freedom, Free and Clear Nights for real overnight-usage households, Solar Buyback for solar owners, Secure Savings and Budget Relief for high-usage homes, Summer Break for the summer spike, and TSC for small business. Run the 6-Line Ambit Plan Fit Test on your actual usage profile before you sign, and always pull the current EFL for your exact ZIP and TDU because the rates in this guide are drawn from the latest publicly available filings and can move on a new enrollment.

If you want a human read on the right pick for your address, Ambit's independent consultants can look at your recent bills and match a plan to the pattern in your usage rather than to the headline rate. Ambit Independent Consultant earnings vary and are not guaranteed. Independent contractor income depends on individual effort and business results.

This guide serves Texas households and small businesses shopping electricity plans, not prospective Ambit Independent Consultants. Every rate cited in this article is drawn from the latest publicly available Ambit Energy Electricity Facts Labels as of September 2026 and can change with a new enrollment. Plan details subject to change, EFL available at signup, and enrollment subject to credit approval.

If you live in Oncor's service area and looked closely at your August electricity bill, you may have noticed something odd. The per-kWh delivery charge line on your bill actually went down. Yet the bottom line came in higher than July. A typical 1,000-kWh Texas home saw about $2.73 more. This is not a billing error, and it is not your Retail Electric Provider padding a rate. Two separate PUCT-approved rate changes hit Oncor territory on August 1, 2026, and they moved in opposite directions.

Here is what changed, why it happened, how long it lasts, and what Ambit Energy customers and other Texas households can and cannot do about it.

Key takeaways

• Oncor's published per-kWh delivery rate dropped by $0.000901/kWh on August 1, 2026, from $0.061196 to $0.060295.
• On the same day, a new PUCT-approved temporary surcharge called Rider IS started at $0.003633/kWh for residential customers.
• At 1,000 kWh, the math is: minus $0.90 from the lower delivery rate, plus $3.63 from Rider IS, for a net increase of $2.73 per month.
• Rider IS is temporary. It ends by the last billing cycles of December 2026.
• Every Retail Electric Provider in Oncor's territory bills these same charges. Switching providers does not remove them. What you can shop is the energy charge and the plan structure.

The Three-Line Reconciliation: how to check the math on your own bill

Because two Oncor changes took effect on the same day, and one moved down while the other moved up, the fairest way to read your August bill is to reconcile them line by line. We call this the Three-Line Reconciliation. You need three numbers.

1. Your July per-kWh Oncor delivery charge: $0.061196/kWh.
2. Your August per-kWh Oncor delivery charge, which is the new base tariff of $0.060295/kWh plus Rider IS at $0.003633/kWh. Add these to get the true August delivery number: $0.063928/kWh.
3. Your monthly kilowatt-hour usage from the meter read on your bill.

Multiply your usage by both per-kWh numbers, subtract, and you have the exact dollar change on your bill from the Oncor side. For 1,000 kWh, that equation lands at plus $2.73. At 1,500 kWh, closer to plus $4.10. At 750 kWh, closer to plus $2.05. The fixed customer and metering charges did not change, so those stay at $4.06 per month combined.

This reconciliation only covers the delivery side of your bill. Anything else that moved between July and August, including your energy charge or usage change, is separate.

What actually changed on August 1 for Oncor delivery

The base delivery tariff quietly moved down. According to the Public Utility Commission of Texas monthly TDU rate report, Oncor's residential combined volumetric delivery charge dropped from $0.061196 per kWh in July 2026 to $0.060295 per kWh in August 2026, a decrease of $0.000901 per kWh, or about $0.90 per month for a 1,000-kWh home. The fixed charges stayed at $1.48 for the customer charge and $2.58 for the metering charge, totaling $4.06 per month.

On the surface, this looks like relief. It is real relief, but it is small, and it was more than offset by the second change on the same date.

What is the Rider IS interim surcharge?

The second August 1 change was a new PUCT-approved temporary surcharge called Rider IS, short for Interim Surcharge. It sits on the delivery side of your bill and lives inside the Oncor charges your Retail Electric Provider passes through. For residential customers, Rider IS adds $0.003633 per kWh. At 1,000 kWh, that is $3.63 per month.

Do the math against the $0.90 drop and you land at $2.73. That is where the number in the headline comes from.

Rider IS is not a hidden add-on. Every Retail Electric Provider in Oncor's territory is required to bill it, and every REP receives the same instruction from Oncor and the PUCT. The rider amount does not vary by REP or by plan. It varies by usage and by rate class.

For small commercial customers, the rider changes shape based on the rate class filed at the PUCT:

• Secondary service at 10 kW or below: $0.002878 per kWh.
• Secondary service above 10 kW: $0.997891 per billing kW.
• Primary service at 10 kW or below: $0.059827 per kWh.
• Primary service above 10 kW: $0.908924 per billing kW.
• Primary substation: $0.130513 per billing kW.
• Lighting service: $0.048697 per kWh.

If you run a small business in Oncor's territory, walk your July bill through your applicable Rider IS rate to size the impact before your next renewal window opens.

What is PUCT Docket 58306, and why is this happening?

Rider IS did not appear from nowhere. It came out of Oncor's most recent comprehensive base-rate case at the Public Utility Commission of Texas, filed as Docket 58306.

Here is the timeline.

According to Oncor (2026), the company filed the base-rate review on June 26, 2025, initially seeking about $834 million in additional annual revenue. According to the Texas Coalition for Affordable Power's April 2026 analysis, the negotiated settlement cut that ask by more than 30 percent. The Public Utility Commission approved the settlement on April 17, 2026, producing a $560 million annual revenue increase, or roughly $274 million less than Oncor originally requested. According to a legal briefing on the approved order (2026), the settlement set Oncor's base-rate revenue requirement at $6.975 billion, which is about an 8.8 percent increase in total electric delivery revenues. Rate-case reference filings from 2026 show the authorized return on equity at 9.75 percent, the authorized common equity ratio at 43.5 percent, and the authorized rate base at $26.45 billion.

The new base rates from Docket 58306 became effective for bills rendered on and after June 1, 2026. That is why your June and July bills already carried some of the change.

Why did the surcharge start August 1 if the rates started June 1?

Because it takes several months to move a big rate case through PUCT proceedings. During January through May 2026, Oncor billed under the old rates while the new ones were still being decided. Once the settlement was approved and the new June 1 rates took effect, there was a gap between what Oncor had collected from January to May and what the approved rates would have generated over the same window.

Rider IS is the PUCT-approved way to close that gap. According to Oncor's second-quarter 2026 earnings materials, the interim surcharge is designed to recover about $212 million of deferred revenue through the end of 2026, reconciling the January 1 through May 31 period against the new June 1 base rates.

How long will Rider IS last?

Rider IS runs through the last billing cycles in December 2026. It is not a permanent increase, and it does not renew on its own. Once the deferred revenue is recovered, the rider comes off and your August delivery-side math resets to the underlying tariff.

For a Texas household using 1,000 kWh per month across August through December, Rider IS adds about $18 in total across the rest of 2026. At 1,500 kWh, closer to $27. For a small business drawing 3,000 kWh, closer to $43.

What are DCRF, TCRF, and EECRF on my bill?

Rider IS is one of several rate mechanisms that let Oncor recover specific costs between full base-rate cases. Three others already sit on your bill.

The Distribution Cost Recovery Factor, or DCRF, recovers Oncor's investment in local distribution wires, poles, and transformers between rate cases. It is filed and updated periodically at the PUCT.

The Transmission Cost Recovery Factor, or TCRF, recovers Oncor's investment in high-voltage transmission lines that move power across the ERCOT grid. In August 2026, the residential TCRF sits at about $0.016932 per kWh in the published rate stack.

The Energy Efficiency Cost Recovery Factor, or EECRF, funds PUCT-approved energy efficiency programs. In August 2026, the residential EECRF sits at about $0.000766 per kWh.

All four riders, including Rider IS, are pass-through charges. Every Retail Electric Provider in Oncor's territory bills the same rider amounts on the same billing lines. For a walkthrough of every TDU line item on a Texas bill, see TDU Delivery Charges Explained.

Can switching your Retail Electric Provider avoid the increase?

No. This is the most misunderstood part of the Texas deregulated market, so it is worth stating plainly. Every Retail Electric Provider in Oncor's territory bills the exact same TDU delivery charges, including the exact same Rider IS amount. Switching does not remove them, hide them, or discount them. A REP can present them line by line, roll them into an all-in rate, or move them into a bill message. The dollars are the same either way.

What you can shop is the energy charge, the plan structure, and the way monthly base fees fit your specific usage. If you use a heavier volume, a lower per-kWh energy charge can outweigh a slightly higher monthly base fee. If you use less, the opposite math often holds. The best way to compare is to read the Electricity Facts Label at your typical usage level, not the marketing headline. For a step-by-step walkthrough, see How to Read Your Texas Electricity Facts Label.

What Texas households can actually control this fall

Because the delivery-side change is fixed and universal, the parts of your bill worth attention are the parts you actually choose.

• Your plan type. Fixed-rate plans lock the energy charge for a term. Variable-rate plans move with the market and often move higher in Texas summers. For the current forward curve read, see Should Texans Lock In a Fixed-Rate Electricity Plan This August.
• Your contract length. Longer terms usually price cheaper per kWh but reduce flexibility, and early termination fees vary by plan.
• Your usage pattern. If your household concentrates use in specific windows, a free-nights or free-weekends plan can win the math, but only when the on-peak rate is competitive. See TXU Free Nights and Weekends vs Ambit Free and Clear Nights for the break-even work.
• Your Electricity Facts Label. Read all six numbers at 500, 1,000, and 2,000 kWh. A plan that looks good at 2,000 kWh can look bad at 500 kWh, and vice versa.

Ambit Energy plan details, availability, and pricing vary. Rates and terms shown are as of publication and subject to change. See the current Electricity Facts Label for full terms and check pricing as of your enrollment date. Enrollment is subject to credit approval and plan availability. Earnings vary and are not guaranteed. Average earnings and savings depend on individual usage, plan selection, and market conditions.

Frequently asked questions

Did Oncor's delivery charges change on August 1, 2026?

Yes. The published per-kWh delivery rate dropped from $0.061196 to $0.060295, a decrease of $0.000901 per kWh. On the same day, a new temporary Rider IS surcharge started at $0.003633 per kWh for residential customers. Net effect at 1,000 kWh: plus $2.73 per month.

What is Rider IS on my Oncor bill?

Rider IS is the Interim Surcharge that the Public Utility Commission of Texas approved as part of Docket 58306, Oncor's most recent base-rate case. It closes the gap between what Oncor collected under the old rates from January through May 2026 and what the approved rates would have generated during the same window. It is temporary.

When will the Oncor interim surcharge end?

Rider IS runs through the last billing cycles in December 2026. It is a temporary reconciliation, not a permanent increase.

Do all Retail Electric Providers bill the same Oncor charges?

Yes. Every REP in Oncor's territory is required to pass through the same TDU delivery charges, including Rider IS. The energy charge, base fees, and plan terms are what actually vary between providers.

Does this apply to small businesses too?

Yes, but the numbers vary by rate class. Secondary customers at 10 kW or below pay Rider IS at $0.002878 per kWh. Above 10 kW, it moves to a per-kW demand charge of $0.997891 per billing kW. Walk your July bill through your rate class before your renewal.

Where can I read the source documents?

The Oncor base-rate case sits in the PUCT Interchange under Docket 58306. The current TDU rate report is published monthly by the Public Utility Commission of Texas. Oncor also posts its retail delivery service tariff on the company's regulatory page.