Common Mistakes Texans Make When Choosing an Electricity Provider
Shopping Power to Choose Comes with No Guarantees
Many Texans end up paying more than they expected because of common mistakes—often tied to how plans are advertised or structured. This guide breaks down those pitfalls and helps you make smarter decisions when switching or signing up.
Mistake 1: Picking a Plan Based Only on the Advertised Rate
It’s easy to focus on the number you see on comparison sites or in ads. But that number is often based on a specific usage level, like 1,000 or 2,000 kilowatt-hours (kWh) per month. If your actual usage is higher or lower, your rate can increase significantly.
Tip: Always check the plan’s Electricity Facts Label (EFL) to see how pricing changes at different usage levels.
Mistake 2: Ignoring Fees That Affect the Real Cost
Some plans come with extra charges that aren't obvious up front. These can include:
Monthly base charges
Minimum usage fees
Bill credits that only apply if you use a certain amount of electricity
Early termination fees
Paper billing or payment method fees
These costs can increase your average price per kWh and make your bill harder to predict.
Tip: Add up all fixed fees and read the fine print. A slightly higher advertised rate with fewer fees might cost you less overall.
Mistake 3: Not Understanding the Rate Type
Choosing a plan without knowing whether it’s fixed, variable, or time-of-use can lead to surprises. For example:
A variable-rate plan can start low, then increase unexpectedly.
A time-of-use plan may work against you if most of your usage happens during peak hours.
A fixed-rate plan offers stability, but not all fixed rates are the same—especially when fees are involved.
Tip: Know your household’s usage habits and choose a rate type that matches how and when you use electricity.
Mistake 4: Forgetting to Plan for the End of the Contract
When your contract expires, some providers automatically move you to a month-to-month plan. These plans often come with higher rates.
Tip: Set a reminder a few weeks before your contract ends so you can compare new plans and avoid being rolled into a more expensive one.
Mistake 5: Signing a Long Contract Without Checking the Details
Multi-year contracts can offer stable rates, but they can also lock you in longer than you need. If you move, cancel, or want to switch early, you could face a cancellation fee.
Tip: If you’re planning to move or just want flexibility, consider shorter contract terms or check the provider’s policy on early termination.
Don't overpay for electricity.
Mistake 6: Confusing the Utility With the Provider
Some Texans assume the company that sends their bill also manages outages and repairs. That’s not always the case.
Your local utility, or Transmission and Distribution Service Provider (TDSP), handles:
Power delivery
Maintenance of poles and wires
Meter reading
Outage response
Your Retail Electric Provider (REP) handles:
Your electricity plan
Billing and customer support
Any questions about your rate or contract
Tip: Keep contact info for both your REP and your TDSP handy so you know who to call when you need help.
Mistake 7: Overlooking Renewable Energy Content
If supporting clean energy matters to you, make sure to check how much of your electricity comes from renewable sources. Some plans include a small percentage, while others are fully backed by wind or solar.
Tip: Look at the renewable energy content listed on the EFL. It’s required by law to be disclosed on every plan.
Knowledge Is the Advantage
Having the right to choose your electricity provider gives you more power as a consumer—but only if you make informed decisions. By avoiding these common mistakes, you can pick a plan that matches your needs, protects your budget, and gives you confidence in your choice.
