Energy Rates in Texas: Finding Renewable Energy in a Deregulated Market

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Most Texans reside in a deregulated energy market where competition should keep energy prices low. But recent dramatic weather events have challenged both affordability and existing infrastructure overdue for winterization. Here’s what you need to know about Texas energy rates and choosing the best renewable energy plan in today’s market.

Imagine: The biggest winter storm hits, shuts down the power grid and leaves most folks without electricity. For Texas, this was the reality last winter in 2020. Now, imagine: As one of the few who kept their lights on, you receive your energy bill of $16,752 a few weeks later.

What the heck happened?

Welcome to living in a deregulated energy market where the equipment used to generate electricity isn’t winterized. That means when devastating weather hits Texas, like the winter storms in 2020 and 2011, families are put at risk when the power grid fails.

Competition Alone Can’t Help You Save on Energy

For Scott Willoughby, a 63-year-old retired veteran relying on social security income, the surprise bill nearly ruined him. It almost wiped out his savings, according to The New York Times, costing him 70 times what he would normally pay each month for electricity. Across the country, energy usage has changed abruptly as people like Willoughby struggle to make do in the face of extreme weather events.

In theory, living in a deregulated energy market should keep costs down because energy providers in Texas need to compete to offer the lowest price to citizens and stay in business. Competition helps keep prices down in Texas when people in other states are stuck with one energy provider and monthly bill. In a competitive generation market, each generator decides for itself what makes it sustainable for the future. However, this is a proven weakness of the market. How much dramatic weather can one state handle? Also, are providers incentivized to cut corners on infrastructure to maximize profit?

Climate change is predicted to intensify the winds that direct hurricanes north across Texas from 2075 to 2100; increasing the likelihood of slow-movers like Harvey in 2017, according to a 2020 study published in Nature Communications. Recall that Harvey deluged Houston with nearly 40 inches of rain in just five days. The study analyzed regional wind patterns likely to exist over the Lone Star state during these years due to rising greenhouse emissions altering the climate.

Winterization is needed to bolster existing critical infrastructure. Otherwise, dramatic climatic events will continue to challenge the capabilities of the power grid and utilities and regulators to keep up, especially when it falls into disrepair. Why change anything if competition keeps the average Texas residential electricity bill lower than the national average?

It’s About Making Smarter Choices

Nearly 20 years ago, Texas shifted to a deregulated energy market. Today, roughly 85% of the state’s population has the freedom to choose their energy provider, according to The Wall Street Journal (WSJ). The senate-approved bill generated an even higher bill for Texans, increasing the cost of electricity by $28 billion since 2004, WSJ analysis found, despite the typical Texas electricity bill costing 8% less than the national average.

Texans living in metropolitan areas pay some of the steepest electric bills in the nation, Click 2 Houston reports. Of the country’s large metros, residents of Houston-The Woodlands-Sugar Land paid the sixth-highest electric bills. That’s a median of $170 per month, with electricity costs in Houston proper accounting for 66.2% of total utility costs.

While Texas legislators have campaigned against renewable energy solutions in the past, Texas ranks first in the nation as a wind energy producer and fifth in solar, according to the U.S. Energy Information Administration (EIA). Texas is also the top producer in new solar installation in the country, recently adding 1,525 megawatts (MW) of capacity. It’s simply a matter of making smarter decisions when selecting your power source and your energy provider—true power to choose.

Types of Energy Plans in Texas

The Electric Reliability Council of Texas (ERCOT) manages electric power flow for some 26 million residents and retail power switching for 8 million premises. Most of the Texas power load is scheduled through ERCOT. The nonprofit is managed by a board of directors and subject to oversight by the Public Utility Commission of Texas and Texas legislature. It doesn’t own any electric assets but monitors renewable energy providers and natural gas providers alike, delivering competitively priced energy to your home or business.

Most people are familiar with Texas’s several dozen electric utility companies, including Direct Energy, Reliant Energy, TriEagle Energy and TXU Energy. These are also known as retail electric providers, who purchase energy wholesale then sell it to you.

Here are the most common kinds of plans you may come across:

  • Fixed-rate plans: The same rate is paid monthly, whether there’s a shift in the energy market or the season. Fixed-rate plans often require a contract with an annual commitment. Like a post-paid cell phone contract, you may need to pay an early termination fee to exit the contract if you need to move before the year is up.
  • Variable-rate plans: These plans change based on—you got it—variables in the energy market. It’s all about supply and demand. If demand goes up, your price goes up. Demand surges during an energy crisis. This is part of why you have seen electric bills that cost thousands of dollars recently. In the right climate and market, variable-rate plans may be a viable option for some. However, the world currently faces multiple challenges in dealing with climate change.
  • Prepaid plans: If your credit score is low, a prepaid plan allows you to pay ahead for your energy without your credit score determining your eligibility to receive power or baring you from it due to affordability.

What Are Renewable Energy Credits (RECs)?

When you select a renewable plan, you receive a guarantee that the electricity company monitors where its energy comes from and that you are provided with the degree of renewable energy you signed up for. So, if your plan specifies 100% renewable energy, then that’s what you get.

It’s a type of accounting system known as renewable energy credits (RECs). When you choose a plan, the provider purchases the number of credits equal to the amount of energy you use. ERCOT manages the trading of these credits. RECs allow people to supplement or fully replace natural gas power with renewable energy by purchasing a green energy plan. This gives you the power to choose a more environmentally friendly option.

Do you receive electricity from a municipal utility company or electric cooperative? Then, you should contact your provider of choice to get an interconnection agreement to install a distributed renewable generation (DRG) system. When you produce more power than you can use, you have the option to sell that extra power to an electric company.

Navigating Texas Green Energy Plans in 2021

Texas is already a leader in renewable energy generation, surpassing its goal of generating 10,000 MW in renewable energy by 2025 in 2009. Texas consumers have the power to choose a green energy plan today and contribute to making the grid more of a community asset for the future.

The Public Utility Commission of Texas advises looking at the electricity facts label for each retail energy provider for an apples-to-apples comparison. You can see what percentage of renewable energy is sourced compared to natural gas and other energy sources. Always review this label before signing a contract to understand all fees associated with your chosen plan.

If the company doesn’t provide a label, compare green energy plans from Gexa Energy, Green Mountain Energy and Rhythm, for example. You’ll need to compare companies thoroughly, as well as rates, and eventually, pass a credit check.

The Best Green Energy Plans in Texas

Here’s a chart outlining some of the 100% renewable energy plans available in Texas to give you a general overview of what’s out there. Plans are based on cents per kilowatt (kWh) at a monthly household usage of 2,000 kilowatts.

PlanTerm (months)Rate (¢/kWh)
Gexa Saver Deluxe 12126.9
Gexa Saver Supreme 12127.3
Gexa Saver 12127.8
Gexa Saver Save Select 12129.0
Gexa Saver Value 121212.1
Gexa Saver Freedom 121212.2
Gexa Saver Freedom 363612.2
Gexa Saver Premium 121213.5
Gexa Saver Premium 242413.5
Gexa Superb Saver 121214.8
Green Mountain Pollution Free e-Plus 121211.1
Green Mountain Pollution Free e-Plus 242411.3
Lone Star Green 121211.9
Lone Star Green 242411.6
Lone Star Green 363611.2
Rhythm Texas Breeze 121211.3
Rhythm Texas Breeze 242410.6
Rhythm Texas Breeze 363610.2

Why Do We Focus on These Energy Providers?

The top energy providers in Texas that you are likely aware of include TXU Energy, Reliant Energy, Direct Energy and TriEagle Energy.

Electricity companies focused on renewable energy include Gexa Energy, Green Mountain Energy and Rhythm. These three renewable energy providers offer both residential and commercial plans. Below we dive a little deeper into these companies offering renewable energy.

Many of these renewable energy providers also offer additional plans viewable at each company’s website. The advantage of many of these plans through a retail energy provider is that there is no installation since you’re using RECs.

Gexa Energy: A+ BBB Score

The Better Business Bureau gave Gexa Energy an A+ score and consumers rate it 4.72 stars out of 5. There are mixed reviews about customer service: Some people say they had issues with submitting information, and others name specific representatives that have gone above and beyond to help them. As for the renewable energy plans, consumers mostly note Gexa Energy is reliable and affordable.

Green Mountain Energy: Know Your Environmental Impact

Green Mountain Energy goes the extra mile by describing the environmental impact each plan makes when you choose it. Say you choose its Pollution Free e-Plus 12 plan that provides 100% wind power. The provider claims that a Texas household can prevent over 32,481 pounds of carbon dioxide emissions with a monthly usage of 2,000 kWh 100% wind power. It breaks that down as 39,309 miles not driven.

Rhythm: Choose Your Renewable Resource

Some plans allow you to choose your preferred renewable source of power while others pull energy from many renewable sources, such as Rhythm. The Rhythm Texas Breeze 12 plan is a cost effective option for a year; you only receive wind power. Wind is the top renewable energy source in Texas. However, you could save more by choosing the Simply Green 36 plan if you want solar, wind and hydro power and don’t mind being locked into a plan that long.

Ask the Right Questions About Renewable Energy Plans

  • Does the plan offer free nights and weekends?
  • Are there variable options available?
  • Is this plan available in my zip code?
  • Am I required to sign up for automatic billing to qualify?

This discussion is just an example of how you might consider your own pros and cons list of choosing a renewable energy provider. Remember to check the electricity facts label before committing to a contract. Many of these plans have an early termination fee, usually $150. Consider BBB ratings and read consumer reviews before purchasing a plan.

Why Choosing Renewable Energy Matters Now

Existing grid infrastructure in Texas already groans under the weight of climate change and weather disaster. Can it handle renewable energy technology? Do legislators care more about lining their pockets with nonrenewable energy profits than winterizing critical infrastructure and innovating with renewable energy policy? There is no timely moment to wait for, only the present. Innovation requires not only adaptation but a willingness to adapt.

Can we reach 100% renewable energy in order to avoid climate catastrophe? Ecowatch asked that question in 2019, just as the Intergovernmental Panel on Climate Change (IPCC) found that the world must reach net zero carbon by 2050. That means that renewable energy must make 70 to 85% of electricity by 2050.

Change ignites as a result of a series of decisions, and it starts with a simple one: choosing your source wisely.

As a Texan, you live in a state that is the top producer in renewable energy. You also hold the power to shift the state toward increased renewable energy consumption by switching your home or business to a green energy plan.

This planet is what we have in common, but it is far too important to render ordinary or obsolete.

More FAQs About Choosing Energy

What if I own a business in Texas?

Texas commercial energy rates were the third-lowest in the nation in 2020. Texans who own companies can shop the same electricity market for their best electricity plan. Pricing info is available with each provider. Cheap electricity rates are also available for companies who work off-hours, and may include some free nights.

Is there a cheap energy rate in my area?

The U.S. Energy Information Administration (EIA) tracks average retail electric rates in Texas. The season, your energy usage, and your provider may impact your rate.

When you use the power can also effect your rate. Customers who use power at an off-peak time can get a lower rate.

What is the difference between a Utility and an Energy Provider?

Utilities are in charge of the operation and maintenance of the energy grid. Utilities are focused on the hardware and infrastructure that runs the grid. Texas utilities include Oncor and Centerpoint Energy.

How do I switch energy plans in Texas?

All a consumer has to do is (1) compare Texas electric providers, (2) switch your electric provider using an online service or form, and (3) verify your lower rate and green energy plan details using the Electricity Facts Label before completing the necessary paperwork.

What is Power to Choose Texas?

Power to Choose is the website managed by the Public Utility Commission of Texas (PUC). It lists energy plans for consumers to compare. It does not list commercial electricity rates.

How do I find the best Texas energy plan?

Most of the searchable energy rates are attached to a zip code, so you’ll need to find the best rate for your area. A Texas energy plan can vary dramatically—so the most important thing is, again, the Energy Facts Label.

You have the power, as a Texan, to push your state toward more renewable energy consumption by switching your home to a green energy plan.

How much can I lower my electric bill?

Find the right plan for your home and lifestyle is key to controlling your energy costs. Electricity companies are competing for customers, which is an advantage for the homeowners.

Deregulation also means there are power outages related to mismanagement and lack of oversight. Every time you look to lower your electric bill, think of the quality of electricity company you are partnering with. How will they impact your wallet, your power supply, and the planet?

Tiffany Chaney is a wellness and environmental impact writer with a passion for the arts, sciences, herbalism, health, energy, and tech. Her writing has investigated everything from mushroom supplements to 3D prosthetic arms to consumer issues in renewables. In addition to her editorial work, Tiffany is an award winning poet and author.

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