Aug. 3, 2020
Houston is one of the biggest cities in Texas and the United States, with a population of 2.3 million. The dry and humid climate of the city requires a good amount of electricity to stay cool, and that requires affordable energy. Due to energy deregulation, Texans can choose among several energy plans with various electric rates from electricity providers. Houston residents can save on energy by comparing Houston electricity rates and finding the best energy plan for them. Here’s how Houston’s electricity market works, and how to save on energy and get the best Houston electricity rates.
Texas is the biggest producer of natural gas and crude oil, and as a result, most of Houston’s electricity is generated through fossil fuels. Some electricity companies offer renewable energy, but they’re higher per kilowatt-hours (kWh) rate electricity plans. As of 2019, Texas is not only the largest electricity-producing state but also has the largest wind energy-generation project.
For all Houston residents, the electricity bill is divided into two categories – supply and delivery services.
The supplier includes electric companies that generate electricity. Their electricity rates are based on the cost of electricity generation, and can differ depending on how the electricity is generated. The retail electricity providers in the Houston area include Pulse Power (Texas Saver), Gexa Energy, Frontier Utilities, Just Energy, TXU Energy, TriEagle Energy, First Choice Power, Direct Energy, Payless Power, 4Change Energy, and Cirro Energy, among others.
All of these energy providers offer different plans and rates; it’s best to read their Electricity Facts Label to learn more about the plan. It contains information on the price per kilowatt-hour, early termination fees, and cancelation fees, among other things.
The delivery services are provided by your local Transmission Distribution Service Provider (TDSP). It’s also known as the Transmission and Distribution Utility (TDU) or simply, your utility company. Your utility company delivers your electricity, maintains the power lines, and handles power outages. The TDSP Delivery Charge takes energy delivery costs into account and may fluctuate occasionally.
Other delivery charges include the PUC Assessment – a fee included by the Public Utility Commission of Texas (PUCT). Furthermore, you’ll see a Gross Receipts Reimbursement Charge, non-recurring fees for new service initiation, and sales tax charges. In the Houston service area, your local utility company is CenterPoint Energy.
You can learn more about Houston electricity rates and tariffs here.
Energy deregulation in Texas allows all Houston residents to choose who supplies their electricity. You can find various Houston electricity plans from different energy providers offering varying rates.
Due to competing energy companies, residential and business electricity rates have become lower compared to the national average. Residents also have green energy options to buy electricity from electric providers that use wind and solar generation techniques.
If you don’t choose an energy supplier, you will receive CenterPoint Energy’s Standard Offer Program. The rates in the SOP are regulated and approved by the PUCT but are higher due to additional costs. You’ll get the best electricity rates if you choose another supplier.
You can use the Standard Offer Program rate as your Price to Compare. Use it to compare the rate plans offered by other energy supply companies to get the best rate for you.
All Houston residents can choose from several retail electric providers to opt for the best plan for them. While some energy companies offer low rates, others offer better benefits along with slightly higher rates.
In any case, you can compare each company’s plans and rates to make an informed decision. You can search and try to shop for rates yourself, but watch out for the fine print, hidden fees, and escalating rates once your term ends.
Alternatively, you can use Arbor’s free TrueRate Protection service to automatically find and switch to the best Houston electricity rates in your area.
Arbor scans the market and gives you the best rates you can get in your service area. When your contract term is expiring, Arbor finds the best rate and switches you again. You always pay the best rate and never have to worry about overpaying for electricity ever again.
You can also use the free savings calculator to find out how much you could save in each case.
All energy supply companies offer plans with carrying rates, term lengths, and bill credits. Some offer variable rates and benefits, such as free nights.
It’s easy to change your supplier – you need a copy of your energy bill to check what your current rate is and what company currently supplies your electricity. You can use Arbor to find the best rate in your area and switch to the lowest cost supplier quickly to save time.
You can use Arbor to find the best rate in your area by using our free savings calculator.
Furthermore, you will find different types of plans depending on the companies. These are the four plan options you’ll find in Houston.
Fixed-Rate Plans: These plans lock in a specific kWh rate for a specified period of time regardless of the season or amount of energy used. We recommend fixed-rate plans because they provide price certainty and minimize risk. But be careful: when your term expires, your rate becomes variable and can go up without notice. Arbor automatically keeps you on the best fixed-rate plan, so you don’t have to worry about rate hikes at the end of your term.
Flat-Rate Plans: Such plans let you pay the same amount each month, regardless of energy usage. While you may be avoiding seasonal fluctuations, you may end up overpaying for electricity in the Houston winter.
Variable Electricity Plans: Variable-rate plans tend to fluctuate with the cost of wholesale electricity. In Houston, higher temperatures can lead to a greater demand for electricity. The increased demand can increase costs and rates substantially.
Indexed Electricity Plans: People who don’t want to get into contracts and want to take advantage of low seasonal rates opt for indexed electricity plans. However, the price of such plans depends on wholesale prices that can fluctuate at any time.
Some plans may ask you for a deposit. However, plans available through Arbor never require a deposit.
All Houston residents get their electricity delivered by CenterPoint Energy. However, they can choose from several electricity suppliers. You can use the Price to Compare or the rate you’re currently getting and compare it with the plans offered by other companies.
You should check what plan offers the most savings and benefits, and what plan works best for you.
You can also check out how you can save on your energy bill with CenterPoint Energy. But electricity is complicated, which is why people trust Arbor to manage their electricity service for them, so they always pay the best electricity rate available in Houston.
Take 30 seconds and save up to $250 per year. Calculate your savings now with our free calculator.