Learn About Texas Electricity

Texas is one of the few U.S. states with a fully deregulated electricity market. Instead of being assigned a utility, residents in most areas — including Houston, Dallas-Fort Worth, and their surrounding suburbs — choose from over 100 competing retail electricity providers (REPs), each offering dozens of plans with different rates, contract lengths, and fees.

That competition can mean real savings, but it also creates complexity. Rates change constantly, fees aren't always obvious upfront, and the same provider can price identical plans differently depending on which utility delivers power to your ZIP code. The guides below break down the parts of the system that matter most before you sign a contract.

Key Terms

REP (Retail Electricity Provider)

The company you choose and pay for electricity — TXU Energy, Reliant, Gexa, and 100+ others compete for your business in deregulated areas.

TDU / TDSP

The utility that owns the poles and wires and physically delivers power to your home (e.g., Oncor, CenterPoint). You don’t choose your TDU — it’s fixed by your ZIP code — and its delivery charges apply no matter which REP you pick.

EFL (Electricity Facts Label)

A standardized one-page disclosure every plan must provide, showing the rate at 500/1,000/2,000 kWh, contract length, fees, and cancellation terms.

Fixed-Rate Plan

Your per-kWh rate stays the same for the full contract term, protecting you from market price swings but usually requiring an early termination fee if you leave early.

Variable-Rate Plan

The rate can change month to month at the provider’s discretion, with no contract or termination fee — more flexible, but less predictable.

Minimum Usage Fee

A penalty charged on some plans if your monthly usage falls below a set threshold (often 1,000 kWh), common on plans that advertise very low headline rates.

Guides