Texas has a deregulated electricity market, meaning you choose your own plan. With 40+ retail providers, shopping can be more complicated than it should be. Some providers and comparison sites use tactics that confuse shoppers, so many Texans end up overpaying.
Why this matters for real estate: if you’re closing on a home, managing rentals, or advising clients, the plan you choose affects operating costs and cash flow.
Here are a couple of examples of how people usually shop for electricity in Texas.
Google Search
You search for “best electricity plans in Texas,” and comparison sites pop up first. Most highlight teaser rates such as “9.9¢/kWh at 1,000 kWh.” You have to read carefully—these are usually bill‑credit plans. They might say “bill credit,” but rarely explain how they actually work—or how they can spike your bill.
AI / ChatGPT
Many people now rely on AI, like Google’s AI Overviews or Chat-GPT to guide decisions. Ask for the “best electricity plans,” and it may list “cheapest plans,” like:
- Company 1 → 9.5¢/kWh @ 1,000 kWh
- Company 2 → 9.6¢/kWh @ 1,000 kWh
- Company 3 → 9.7¢/kWh @ 1,000 kWh
- Company 4 → 9.5¢/kWh @ 1,000 kWh
- Company 5 → 9.6¢/kWh @ 1,000 kWh
Even if there’s a warning that these might be bill‑credit plans, you still get the list. The catch: those options are almost always bill‑credit plans—and rarely the best deal for most households.
What is a bill‑credit plan, and how do you spot one?
A bill‑credit plan adds a fixed credit (for example, $50 or $100) once your monthly usage crosses a set threshold—often 1,000 kWh. The problem: they look cheaper than they are. If your usage is below or above the target, you lose the credit and your real price per kWh jumps.
Providers show this in the Electricity Facts Label (EFL). A typical example looks like:
- 500 kWh → 22.9¢/kWh
- 1,000 kWh → 9.9¢/kWh
- 2,000 kWh → 15.9¢/kWh
That “9.9¢/kWh” only applies near 1,000 kWh. Very few households land exactly at 1,000 kWh each month. A medium‑size home (around 2,500 sq. ft.) typically uses roughly 500–1,800 kWh per month, depending on the season. As your usage moves away from 1,000 kWh, the effective rate climbs.
In milder months (January, February, March, November, December) usage often falls under the threshold, and the effective price can jump above 22¢/kWh—nearly double a good True Fixed plan.
How to avoid the bill‑credit trap
- Start at PowerToChoose.org, the state‑run marketplace from the Public Utility Commission of Texas. Filter for fixed‑rate plans and open each Electricity Facts Label (EFL).
- Avoid “as‑low‑as” pricing tied to usage ranges. In the EFL, a true fixed plan shows the same all‑in price at 500, 1,000, and 2,000 kWh and $0 in bill/usage credits.
- Use your Smart Meter Texas data (hour‑by‑hour usage) to match a plan to your actual pattern—especially helpful for new homeowners, landlords, and property managers with seasonal swings.
- Tools like Clear Energy Facts categorize plans and flag bill‑credit structures (including those on Power to Choose). You can safely search for the best True Fixed plans in your area.
The bottom line
When you’re shopping for electricity in Texas, prioritize true fixed‑rate plans. Confirm in the Electricity Facts Label that the all‑in price per kWh is flat across 500/1,000/2,000 kWh and that any bill or usage credit is $0. Use Smart Meter Texas data to choose confidently. Clear Energy Facts lets you upload your data, analyze past usage, and surface true fixed plans that fit your home or rental portfolio.