Our Guide to Saving Money and Switching Electricity Providers in Texas

Our Guide to Saving Money and Switching Electricity Providers in Texas

March 23, 2023
by
Shawn Cornett

It's no secret that the price of electricity is up. The average electricity bill in Texas is up, too. Saving money on your home electric bill is more important than ever.

You have the freedom to choose the best electricity provider for you. A new provider can lower your energy costs.

Changing electricity providers is easier than you think. Learn more about how to save money by choosing a new electricity provider.

Money-saving-guide-switching-electricity-providers

Can You Change Electricity Providers in Texas?

In most parts of Texas, you can choose your electricity provider. This is because Texas is primarily a deregulated electricity market. The legislature deregulated the electricity marketplace in 2002 to give consumers more flexibility.

A few areas aren't yet deregulated. They lack competition in the wholesale electricity market. To find out if you have electric choice, you can:

  • Check the Power to Choose website, or
  • Call Power to Choose at 1-866-PWR-4-TEX

In a deregulated area, you can switch providers even if you're under contract. You may have to pay an early termination fee, though.

How to Switch to a New Electricity Provider

Changing your electricity provider is simple. After you decide which provider you want, you can contact that company. You can contact them via phone. Some providers let you contact them through their website.

You'll need to give the new provider your current account information. The new company will contact ERCOT. The Electric Reliability Council of Texas (ERCOT) operates the electrical grid in Texas.

ERCOT will tell your old electricity provider that you'll be transferring your service.

After you sign your new contract, you'll receive a confirmation from ERCOT. The switch to your new provider will happen automatically within seven business days. You shouldn't experience a gap in service.

Money Saving Tips When Switching to a New Electricity Provider

Changing your electricity provider can save you a significant amount of money. Making the switch can have unexpected costs if you aren't prepared, though.

First, check to see if you're under contract with your current provider. You may need to pay an early termination fee. These fees vary by provider, which is why checking to find out the amount is important.

Second, try to avoid shopping for electricity providers in the summer. The cost of electricity is highest in the summer in Texas. You don't want to be stuck with a plan based on the high summer rate.

Third, compare energy providers on a regular basis. Plans and rates can change frequently.

Many providers offer short-term discounts for new clients. Depending on the company's customer service policy, you may be able to negotiate extending the lower rate.

Comparing Electricity Providers

When you're trying to find a new energy company, you have several factors to consider. The price of electricity is obviously a major concern. Other factors are important, though.

Cost of Electricity

Service providers usually charge for electricity per kilowatt hour (kWh). You can compare the price per kWh to see which provider has the lowest rate.

You need to consider more than the base rate, though. Many companies add charges like delivery fees or transition fees. A low price per kWh with high fees may not be such a bargain.

Contract Length and Conditions

The length and terms of the contract are important to consider. A shorter contract gives you more flexibility. The price may be higher, though.

You should ask about early termination fees for ending the contract early. You also want to know about any auto-renewal conditions and prices.

The contract may include provisions like a minimum usage requirement. A minimum usage clause means that you pay a higher rate if you use less electricity than planned.

Understanding the terms of the contract helps you compare electricity providers more accurately.

Reputation and Customer Service

A low price is good, but you don't want to sacrifice quality. You want reliable electricity from a company with a good track record.

Look at how long a company has been in business. A newer company isn't necessarily a bad choice. An electricity provider with a longer record gives you more assurance of stability.

Power to Choose has information about official complaints against electricity providers. You can check online reviews to learn about a company's history and customer service.

Types of Electricity Plans

Electricity plans in Texas have a price per kWh that is fixed, variable, or indexed. Each type of pricing has pros and cons depending on your energy use.

Fixed-Rate Plans

A fixed-rate plan gives you the same rate per kWh throughout the contract term. You can plan for how much you'll pay every month. The price only changes due to factors outside of the provider's control, like regional administrative fees.

Fixed-rate plans have contracts that last for at least three months. Their main disadvantage is that your rate won't decrease even if the bulk market rate goes down. They usually have an early cancelation fee.

Variable-Rate Plans

The price per kWh in a variable-rate plan changes based on the market or other factors. You benefit when the bulk price of electricity drops.

Variable-rate plans are usually month-to-month. You can change providers easily without early cancelation fees.

Variable-rate plans can be complicated, though. Predicting how much you'll pay each month for electricity is difficult.

Incentives

Many electricity providers offer plans with incentives. You can benefit from discounts based on how you use electricity. For example, the plan may give you a lower rate during the night.

New customers may be eligible for gift cards or bill credits. Your provider may offer smart home products to help with saving energy and tracking your electricity usage.

Experience the Difference with Ambit Energy

You have many electricity providers to choose from in Texas. You're free to choose the provider and the plan that best fits your needs.

Ambit Energy has been providing cost-effective and reliable electricity since 2006. We're dedicated to treating our customers right. We offer a range of fixed-rate and variable plans to fit your lifestyle.

Check our current offers for your home today.

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