What is the Cheapest Electricity Company in Texas?

Whether you're on a tight budget, worried about inflation, or don't like to be wasteful, saving money has never been more important. One of the places where people like to save money is with their phone, internet, TV, and utilities. As a result, many people do not see the whole picture when they sign up for an electricity plan in Texas. 

Thanks to energy deregulation and fierce competition, electricity rates in Texas are tricky and deceptive. Unfortunately, that hasn't stopped people from trying to find the cheapest electricity company in Texas based on their advertised rates alone. These people don't realize that there's much more that goes into your electricity plan than the listed rate. 

1. Is the Cheapest Rate the Best Rate? 
2. How do Electricity Rates Work in Texas? 
3. What is the Best Electricity Company in Texas? 

Which Company has the Cheapest Electricity in Texas? 

Texas is a massive state with over 120 retail electric providers, and they're all competing to be the best. One of the main things people look for with their electricity plan is an affordable rate. However, because of how the energy market and electricity plans are structured, there isn't any one company that's cheaper than the rest. 

The cheapest electricity company in Houston might be one of the most expensive in Austin. It all depends on where you live and how many REPs are competing in the area. The more retail electric providers (REPs) there are, the fiercer the competition will be, and the cheaper electricity will drop. 

Is the Cheapest Rate the Best Rate? 

It's also important to understand that the cheapest rate isn't always the best rate. In fact, the cheapest rate at face value often won't be the cheapest rate in the long run. For example, you might see an electricity plan with a listed rate of 10 cents per kWh, nearly 2 cents below the state average. 

At face value, this looks like a great, affordable plan. What you don't realize is that you'll end up paying much more than just the listed rate. Most electric plans in Texas have hidden fees, service charges, and upcharges. 

Minimum Usage Fees 

One of the biggest things you have to watch out for with electricity plans is that they often have minimum usage fees. Here's how they work. 

Let's say that you find an electricity plan listed at a rate of 9.5 cents per kWh. Because most plans have their rates based on usage of 1,000 kWh, you don't give things a second thought. Unfortunately, the plan you signed up for and possibly locked yourself into a two or three-year contract with has a minimum usage fee. 

Because your goal is to save money, you try to use as little electricity as possible. At the end of your first month, you end up using 1,100-kilowatt-hours and expect your bill to be right around $100. Not bad! 

Because of the minimum usage fee, where the 9.5 cents per kWh rate is based on 1,500 or more kilowatt-hours, your bill is much higher than $100. The fine print of your plan states that if you don't use at least 1,500-kilowatt-hours of electricity, your rate jumps to 13 cents per kWh. Rather than paying $100, your monthly total is over $140. Things get really bad if you use 1,450-kilowatt-hours and your bill is nearly $200! 

You would have been better off signing up for a plan that charges 10 or 11 cents per kWh and doesn't have any minimum usage fees. 

Hidden Fees 

Many electricity companies also have hidden fees that they don't list in their plans. Hidden fees include customer service call and assistance fees, low balance fees on prepaid electric plans, processing fees, overuse fees, disconnection or reconnection fees, and even starter fees when you first sign up for the plan. Contact us at GoodCharlie Energy if you're looking for a plan that works for you and not against you. 

Delivery Fee

Finally, you can almost always expect a delivery fee towards paying the Transmission and Utilities Distribution company that manages the power lines, poles, and electric meters in your area. Some power companies figure the delivery fee into their monthly rate, but others sneak it into your monthly bill as an extra charge. The goal of doing this is so that your overall rate looks lower than it actually is. 

How do Electricity Rates Work in Texas? 

Now that you're aware of all the hidden rates and fees involved with your electricity, let's look at how most rates and plans work. We'll use an example similar to the one above. 

1. In the fine print, you don't notice that the price jumps to 15 cents per kWh for any electricity over 1,000-kilowatt-hours. 
2. You have a large family and end up using 1,300-kilowatt-hours. 
3. Rather than paying the expected $130, your bill is $145 plus all the hidden fees and charges. 
4. This is known as a tiered rate electricity plan and is extremely common in most parts of Texas. 
5.  

A tiered rate in and of itself isn't necessarily a bad thing. However, most companies aren't open and obvious about the different tiers and rates built into their plans. Contact us if you're tired of sneaky rates and hidden fees busting your budget because that's not what we're about. 

What is the Best Electricity Company in Texas? 

As you can see, even when you think you've found the cheapest electricity company in Texas, you probably haven't. Without digging into the fine print of every plan and making sure there aren't hidden rates and fees, there's no telling what you'll end up paying. Rather than looking for the cheapest electricity company in Texas, you should look for the best one. 

GoodCharlie Energy is a REP dedicated to both you and your entire household. Our goal is to deliver excellent electricity service to your home without taking you for every nickel and dime you have. We're a power company you can trust, offering low, fair, and straightforward rates.