Here is What You Need to Avoid
In Texas, the term Power To Choose has become synonymous with electric choice. It is also the name of the website the state established after deregulation arrived in Texas. The intent was to give consumers a way to see their choices and compare rates from different electric companies in their area.
As it turns out, governments are terrible at running consumer websites. The Power to Choose website became a free-for-all and a minefield for consumers who were just looking for an electricity provider at a reasonable rate.
Because there is no moderator for the site, some of the less scrupulous electric companies began spamming the site with deceptive plans designed to look cheap while, in reality, being way more expensive than advertised. This led to an uproar among consumer groups and calls from lawmakers to stop listing electricity plans on the website.
How is Vaultelectricity.com different than the Power to Choose website?
There is no mechanism on the Power to Choose website to toss out deceptive plans. They must allow every electricity provider to list their plans. There is no staff reviewing the plans for suitability. This has led to a race to the bottom where some providers try to game the system to appear near the top of the list with advertised electricity rates that aren’t the real electricity rates.
Vaultelectricity.com has over a decade of experience weeding through complicated Texas electricity plans. We only list plans that are legitimate from companies that can be trusted. Just like the Power to Choose website,
Vaultelectricity.com is a free consumer service. Unlike Power to Choose, every plan listed on our site is vetted. We aren’t going to allow the Texans who use our website to compare electricity rates to be fooled and tricked into an expensive mistake.
How Power To Choose Works in Texas
The Texas energy market includes three groups. You have the producers of electricity, Transmission and Distribution Utilities (TDU) and Retail Electricity Providers (REP). The TDU delivers power to your region, down the same lines as everyone else. The REP you choose is responsible for customer service and price. While customer service is essential, it’s the price that really differentiates one electricity provider from another — this is where it gets tricky.
To discover the best rates, you’ll want to compare what the REPs offer. Of course, it’s not as easy as it sounds. For instance, if you’re searching for rates on the Power to Choose Texas site, you’ll find REPs advertising their rates in terms of an average price per kWh. The thing is, these so-called “average rates” include other fixed charges, per kWh charges, pass-through costs from the TDUs and other credits. Once you add up all the rate components, the average rate varies significantly from customer to customer. The rate all depends on how much electricity you use in a given month.
For instance, you can choose a plan with a $20 fixed monthly charge that will add 4 cents per kWh to the average if you use 500 kWh in a month, but only 2 cent per kWh if you use 1,000 kWh per month.
Sample Power to Choose Electricity Plans
Looking at this example, you can see how the average price per kWh is a slippery concept — it’s also how most consumers compare electricity plans. Trying to predict how much a given consumer is going to pay per kWh is difficult. After all, the average rate per kWh can vary significantly at 1,000 kWh compared to 2,000 kWh, even with the same plan offered by the same provider.
We evaluated some examples on the Power to Choose electric Texas website. We looked at two different plans by two different providers in the Houston area. The first plan is specifically designed to have an attractive average rate at precisely 1,000 kWh. It includes a flat cost of $54 for the first 1,000 kWh per month. The average rate starts high and drops as usage approaches 1,000 kWh. Starting at kWh 1,001 the plan switches to a per kWh rate of about triple the rate advertised for 1,000 kWh. This switch drives up the overall average substantially after the first 1,000 kWh. This plan is fairly typical. It’s possible to hit the advertised rate of 5.4 cents per kWh, but you have to reach an unreasonably narrow usage window to do so.
The second plan we looked at has a much higher advertised rate at 1,000 kW, but is lower than the first plan at most usage levels. This plan consists of a flat fee component, a per kWh pass-through fee from the TDU, and an additional per kWh fee.
You’ll find more information on the factors that make up your electricity price here.
Frequently Asked Questions
How do I choose a good energy plan?
Use the vaultelectricity.com realtime rate comparison tool to see the available electric companies and plans near you. Make sure you select the appropriate home size. This is critical because most Texas electricity plans have different average rates at different levels of kWh usage per month. By default, we display average rates for 1000 kWh usage. This is an amount consistent with a small home in Texas. You can also view rates for 500 and 2000 kWhs.
Look at your electricity usage patterns over the course of a year. You may find that you use around 1000 kWh in the spring but use well over 2000 kWhs in the summer. If this is the case, you will want to make sure the plan you select doesn’t have a steep jump in rates at 2000 kWhs.
How do I find the cheapest energy provider?
The reality is, you shouldn’t be shopping for the cheapest energy provider. You should be shopping for the electricity plan that is cheapest for your situation regardless of who the provider happens to be. Savvy electricity consumers in Texas switch electric companies often when they find a better rate. Check our listing of electricity plans in your area often to make sure you are not overpaying for electricity.
What is a good rate per kWh in Texas?
Over Texas electricity rate index tracks average electricity rates for all of Texas as well as averages in the Houston and Dallas areas. The average electricity rate in Texas as of March 2019 was 10.5¢ per kWh. But by using our electricity rate comparison tool to find the cheapest electricity plan in your area, you should be able to do substantially better than the average rate.