We compare, review, and offer the best plans from top reviewed suppliers in Houston.
About What to Expect With Houston Electric Service
The best electric providers in Houston have a remarkably diverse selection of plans to choose from. Gimmicky plans such as free nights and weekends are not what we consider to be in “the best” category. Short term 1 month plans could be a great way to go if you plan to lock into a fixed plan later. When you know you will be staying somewhere permanent and you plan to switch, 1 month plans are okay, otherwise don’t do it.
Some of these plans are well thought out and helpful for customers and other plans often do not meet the expectations they established in their advertising. We show customers how to review these electric providers and their plans to help them make an informed choice. For most, it is best to stick with a fixed term plan which range from 6 months out to 4 years and longer.
The poles and wires company that gives you the infrastructure that transports the electricity over the lines is CenterPoint Energy. When you have an electric outage you call them. There are many retail electricity companies that are advertising in hopes they gain you as a customer. Retail providers buy wholesale electric power from generation companies. The power is split up to sell to thousands of customers, for both residential and business customers. In Texas you have electric choice which is not the case in every state as many states are regulated to one electric company. In Texas you have what the state calls, The Power to Choose.
Transmission and Distribution Service Provider or TDSP for Short
In the Houston area and greater metroplex CenterPoint Energy is the electric utility “poles and wires company”. They have the infrastructure such as poles and wires, transformers, and numerous other physical things to transport your electricity to your home or business. If you have an electric service outage in Houston you call them. They do not sell electric service only deliver it over the wires.
CenterPoint Energy also puts in your electric meter and does a diagnostic on it if it is not working properly. This utility company replaces faulty meters. Call them to check on your meter if you believe it is reading incorrectly.
For each kilowatt hour of energy you use the TDSP charges you something for that. The state of Texas determines how much they are allowed to charge and you cannot negotiate what this charge will be. There is no shopping involved in your TDSP “electric rate”.
Centerpoint Residental TDSP TAX breakdown:
- Customer charge – $1.62 per month
- Metering charge – $3.85 per month
- Transmission charge – .8439¢ per kWh
- Distribution charge – 1.6489¢ per kWh
Types of Plans You Can Choose
This can be where it can get confusing. Fixed rates are the way to go. The best electric providers in Houston offer fixed rates. You lock in for a period of time so you can sign up and forget about it. We will go over each plan type below.
You lock in your rate at a specified time frame anywhere from 9 months to as long as 5 years. There are early termination penalties with these but if you know you will not be going anywhere I recommend these plans. The electric rates are transparent and you get what you signed up for with no surprises later.
These are month to month contracts but the con with these is that they fluctuate in price each bill cycle and the pricing formula is often kept hidden as to why the electric company chooses to lower and raise the rate. There may be a deposit and are the best fit for a very short term option so you can avoid early termination penalties. There are no early termination penalties like are found with fixed rate term contracts. Just make sure to go shopping for a longer term fixed plan later before your rate jumps in price. Don’t wait too long to do this, as the price will go up and you won’t know about it until 30 – 45 days later when you get your bill.
Prepaid Guaranteed No Deposit
Prepaid Electric companies are a guaranteed no deposit option. These companies are not for everyone but they work great for certain customers. If you have ever needed to get a secured credit card to build your credit then you know what I am talking about. These electric providers will build your credit but it is a bit of a hassle. You have to load your money into the account in advance.
As you use electric service the prepaid provider bills your prepaid account and money is deducted from that account. There is no deposit but you do prepay the account. The good news is that the money is only for the purpose of paying for the electric service you use from your rate plan chosen from the available light companies in Houston.
With a post-paid provider if your credit was not good enough they would ask for perhaps a $500 deposit and they would keep that the whole year while billing you each month as well.
There are other plans like renewable energy plans and plans that have “rewards” and smart meter choices but the 3 designated plans above are the main choices most consumers are concerned about.
Average Electric Rates in Houston
The energy information administration from the United States government has reported on the average rates for Houston Texas as provided in this graph. The average residential electric rate in Houston was 13.53¢ as of July 2022. Many customers in this average contracted their rate when the market was lower in price overall.
Cheapest Price Electric Companies in Houston
Check to see who offers the cheapest electric rates in your Houston area zip code.
Frequently Asked Questions in Regards to How to Compare Electric Rates in Houston, Texas
How do I pick the best electricity company in Houston
You want to look at your historical electric usage on previous bills. Plans are developed to benefit people based on how they use their electric service. I helped someone the other day in a small home who never used over 1,000 kWh. We looked at several plans by reviewing their Electricity facts label and the terms of service. We found a plan that had a small monthly service fee.
Because her bill was so small the monthly service fees contributed in a big way to the cost of her bill. By eliminating the service fee and choosing a cheap rate we found the perfect Houston electric plan. The rate was not the cheapest but when there was no service fee the rate ended up being the cheapest for her kilowatt hour usage amount. How can a rate be the cheapest but yet not be the cheapest? That is why you have to read the fine print. It’s a sad reality but it’s what you have to do.
How can I change electric providers in Houston?
It’s pretty simple to change, you don’t even need to call your previous provider. Simply order online or call the new provider through this website or directly through the provider you have chosen and the switch will be carried out by ERCOT (The Electric Reliability Council of Texas). The switch is done through ERCOT so you will never be double billed. ERCOT takes you off your old provider and puts you on the new provider as they utilize your meter number and ESIID number through your transmission and distribution company, CenterPoint.
Houston Energy Companies, Explain?
If you have never been in a deregulated territory such as being in a Cooperative like Waco’s Brazos Electric Cooperative it can be confusing. Deregulation split the generation and distribution side from the retail electric side. Your bill has a portion that is like a tariff that is not something you have control over coming from CenterPoint Energy, transmission and distribution. You will pay the TDSP charges regardless and there is no electric choice in the matter. The other company is your retail electric provider which you get to choose. In Houston they call this choice “the power to choose”. These companies buy electricity at wholesale and sell it to you as an electric rate plan. If you were in a cooperative before or state regulated utility it was all one company doing everything.
How to change electric providers in Houston?
Since ERCOT handles the switch from one meter to the next you don’t have to be worried about double billing or worse. You simply go to a website if you are like most of us and compare, choose a rate, and order online. ERCOT handles everything behind the scenes so your old Houston provider is notified and forced to let you go and your new provider can pick you up. Your meter is tied to an ESIID number and this number can only go to one provider at a time, it is impossible for two electric providers to have control of this number. There is no fighting or struggling between companies as it is actually impossible because of how ERCOT performs the intermediate switching between the two companies.
Who do people trust to offer the best Houston electric rates?
The Analysis Group Economic – Financial, and Strategy Consultants, Economic Development Journal, and My Google Business feature ElectricRates.com electric rates comparison website as a trusted resource that thousands of customers have used to compare and shop online.
Is electricity expensive in Houston?
You can order electric service 5 years in advance if you are confident you will be in the same place that long. Long terms contracts have big cancellation fees so only do that if you know you will not be moving. Five years ago Houston electric rates were cheap compared to today. When you average customers long term contracts with current energy contracts being contracted today the average is around 8 cents per kilowatt hour with the average electric bill around $135 a month.
What company provides electric service in Houston?
The transmission and distribution company provides the raw commodity of electricity to your poles and wires into your home or business. This company is called CenterPoint Energy. You cannot choose CenterPoint as they own those lines but you can choose your retail electric provider in Houston. We encourage most customers to choose a fixed rate agreement as you will have a stable price with no surprises. For green energy please visit our voluntary sustainable energy offer.
Who has the cheapest electric rates in Houston?
We signed up a commercial business at 4.2 cents per kilowatt hour but they had hundreds of thousands of kilowatt hours they used. It all depends on the amount of kilowatt hours you use to achieve “the cheapest electric rate in Houston”. For most of us that use the same average amount of kilowatt hours they rate plans change on the daily and so a comparison is generally needed. Our comparison tool can help you see who is the cheapest for residential plans. Our reverse auction for businesses can find out for you if you are a Houston business needing the best rate.
Donny has been writing about the deregulated energy markets since early 2007. His knowledge has helped consumers lower their electricity cost.