Low-Cost Electricity Providers in Texas (Guide)

The key to finding a low-cost electricity provider in Texas is to compare plans based on your energy usage, not just the advertised rate. Electricity prices vary by ZIP code, season, and provider, so the cheapest plan for one household may not be the cheapest for another.

To get the best deal, review your average monthly consumption, compare fixed-rate, bill credit, and time-of-use plans, and shop during lower-demand months like April or October. Using a data-driven comparison tool like Power Wizard ensures you see the true cost of each plan (including fees, bill credits, and delivery charges), so you can choose a provider that fits your usage habits and keeps your total bill as low as possible.

Texas has one of the most competitive electricity markets in the country, with dozens of REPs offering plans that vary by rate, contract length, and billing structure. Below are some of the top low-cost electricity providers in Texas today. Keep in mind that available plans and rates can change by location, so it’s best to enter your ZIP code into Power Wizard’s smart comparison tool for the most accurate results.

Choosing a low-cost electricity provider isn’t just about chasing the lowest advertised rate, it’s about locking in predictable costs that fit your household’s usage patterns. For most Texans, a fixed-rate plan is the smarter choice, offering long-term price stability and protection from market spikes. Variable-rate plans can leave you exposed to sudden increases, so they typically only make sense for short-term or highly flexible situations.

Consider Your Usage Habits and Plan Type

• Fixed-rate plans: These lock in a price per kilowatt-hour (kWh) for the full contract term, usually 3 to 36 months. Fixed rates offer predictable billing and long-term protection from market spikes. If current prices are low, securing a longer-term fixed plan can be a smart strategy. However, be mindful of Early Termination Fees (ETFs).
• Variable-rate plans: These fluctuate monthly based on market energy prices and other factors set by your Retail Energy Provider (REP). They can be cost-effective when rates drop, but they’re risky during extreme weather or high-demand periods. Their advantage is flexibility — you can often switch providers at any time without paying an ETF. This makes them best for temporary electricity needs.
• Time-of-Use (Free Nights or Weekends) plans: These offer reduced or even free energy during off-peak hours (but you still pay delivery charges), which are typically nights or weekends. They work best for households that can shift major energy use (like laundry, dishwashing, or EV charging) to these timeframes.
• Bill credit plans: These are fixed-rate plans that reward you with a bill credit when your monthly usage meets or exceeds a threshold, usually 1,000 or 2,000 kWh. However, if your usage falls below, you’ll miss the credit and could end up paying more than expected.
• Tiered plans: Most Texas plans use tiered pricing, with or without bill credits, where your per-kWh price changes at usage levels (e.g., 500, 1,000, and 2,000 kWh). Tiered plans can save money only if your usage consistently lands in the cheaper tier.
• Prepaid or no-deposit plans: These allow you to pay for electricity upfront instead of receiving a monthly bill. They’re ideal for customers who want to avoid credit checks or deposits. While prepaid plans offer more flexibility and control, rates are often higher than those of traditional fixed plans, and your power may be disconnected automatically if your balance runs too low.
• Flat-rate plans: These charge the same monthly amount up to a certain usage level. Instead of paying per kilowatt-hour, your bill stays steady as long as your usage remains within the provider’s defined limits. Flat-rate plans make budgeting simple and eliminate monthly surprises, but they can cost more if your usage is significantly lower than the plan’s average assumption.

Best Times to Shop and Switch

Electricity prices in Texas rise and fall with seasonal demand. Knowing when to lock in a rate can make a major difference in long-term savings.

• Shop in spring and fall: These “shoulder seasons” typically have milder weather, lower demand, and therefore cheaper fixed-rate offers.
• Avoid peak months: Summer and winter tend to see higher prices due to increased demand for air conditioning and heating. Locking in a plan during these periods can result in higher rates for the duration of your contract.

Additional Tips for Finding a True Low-Cost Plan

• Review your current plan: Check when your contract ends and analyze your historical usage data. Knowing your monthly consumption range (in kWh) lets you compare plans more accurately.
• Watch for bill credits and usage tiers: Some plans advertise low prices that only apply if you use a specific amount of electricity each month. For example, a plan might include a $50 bill credit for past 1,000 kWh, but you’ll lose that benefit if you use less.
• Ask about no-deposit options: If you prefer to avoid large upfront payments, some providers offer no-deposit or prepaid electricity plans. These can help you start service immediately and pay as you go.
• Always check the EFL: Review the Electricity Facts Label (EFL) to understand your electricity plan’s rate.

Electricity pricing in Texas isn’t one-size-fits-all. The cheapest provider or plan depends on how much energy you use, when you use it, and when you shop for your next contract. Below are a few common scenarios that show how Texans can secure the lowest rates.

Example Scenarios for Finding the Lowest Electricity Rate in Texas

When you’re searching for the cheapest electricity rate in Texas, don’t stop at the headline price. Many plans advertise eye-catching low rates but hide the real costs in usage tiers, bill credits, or fine print. These are some of the most common pitfalls to watch for and how to avoid them.

1. Bill Credits That Depend on Exact Usage

Some electricity plans promote “average rate” discounts that rely on monthly bill credits, but you only get the credit if your usage falls above a specific usage, such as 1,000 or 2,000 kWh per month. If your household’s usage drops below or rises above that window, you lose the credit, and your effective rate can spike.

For example, one Texas plan might look like this:

• 500 kWh: 22.2¢ per kWh
• 1,000 kWh: 9.2¢ per kWh (after a $125 bill credit)
• 2,000 kWh: 15.2¢ per kWh

That middle tier looks attractive—but unless your usage consistently stays above 1,000 kWh, your cost per kWh can jump dramatically from one month to the next.

How to avoid it: Check the Electricity Facts Label (EFL) before you enroll. Compare each plan’s usage thresholds to your past 12 months of electricity bills. For instance, a stable homeowner who averages ~1,200 kWh/month might benefit from a bill-credit or long-term fixed-rate plan, while a renter using 700–900 kWh/month is better off with a short fixed-term or variable plan that doesn’t penalize usage swings.

2. Tiered Usage Rates

Some providers advertise a low rate for the first few hundred kWh but raise prices sharply after a certain threshold—say, after 1,000 kWh. This can mislead higher-usage households into thinking they’re getting a bargain when, in reality, their average cost climbs once they pass the lower-priced tier.

How to avoid it: On the EFL, check what happens at 500, 1,000, and 2,000 kWh usage levels. Be realistic about your energy needs, especially during hot Texas summers, when air-conditioning can double or triple consumption. A fixed-rate 12- or 24-month plan often provides better long-term stability for families with variable seasonal use.

3. High-Risk Variable-Rate Plans

Variable-rate plans change monthly based on market conditions. These plans can start with a low introductory rate but can rise sharply during periods of high demand or supply constraints. During extreme events such as Winter Storm Uri in 2021, some Texans on variable-rate plans experienced very high bills.

How to avoid it: If you prefer predictable billing, select a fixed-rate plan with a term that matches your needs. If you opt for a variable-rate plan, monitor energy market trends closely and be prepared to switch quickly if prices increase.

4. Time-of-Use Plans with High “Peak” Rates

Time-of-use plans can provide low or no-cost electricity during off-peak hours but charge much higher rates during the day. If you use most of your electricity during peak hours, these plans may cost more overall.

How to avoid it: Evaluate your household’s schedule and energy usage patterns. These plans are best suited for users who can shift a large portion of their energy use to evenings and weekends (depending on your plan’s structure), such as charging electric vehicles or running major appliances.

5. Hidden Monthly Fees and Contract Terms

Some plans add monthly base charges, minimum usage fees, or early termination penalties (only applies if you switch REPs before your contract ends) that significantly affect the total bill. Even a $5 monthly fee can noticeably raise costs for lower-usage households.

How to avoid it: Read the fine print in the EFL, including details about base fees, delivery charges, and early termination policies. Compare plans based on the total estimated monthly bill, not just the advertised rate.

6. Poor Timing When Locking in a Plan

Electricity prices in Texas fluctuate seasonally. Rates are usually highest during periods of high demand, such as the summer and mid-winter months. Locking in a long-term contract during these times can result in paying a higher rate for the duration of your plan.

How to avoid it: The best times to shop for electricity are generally spring and fall, when demand and rates are typically lower. If your current plan ends during peak season, set a reminder to shop a few weeks early to avoid auto-renewal at a higher rate. You can shop 60 to 90 days early (depending on the provider) and enroll with a future start date. But by rule you can only switch without an ETF if the switch is no earlier than 14 days before your contract expiration