Welcome to Texas. The electricity industry is waiting to take advantage of you.
That sounds harsh, but it’s true. Newcomers are the most profitable customers in the Texas electricity market. You don’t know what the market is priced at this month. You don’t know which advertised rates are lies. You don’t know that the big-name companies—the ones with stadium sponsorships and TV commercials—often charge more than smaller competitors for identical electricity (in September 2026, TXU’s cheapest 12-month plan on ComparePower ran about 26% above the cheapest plan on the market at 1,000 kWh in the Oncor area; Reliant’s ran about 4% above).
The Texas market is designed to reward informed consumers. It’s also designed to punish people who sign up without doing homework. Let’s make sure you’re in the first group.
Texas Electricity Is Different: Deregulation Explained
In most states, you get electricity from one local utility. They set the rates. You pay the bill. No choices to make.
Texas did something different in 2002. The state split the companies that sell you electricity from the utility that delivers it over the poles and wires. That created a competitive market where electric companies compete for your business and the utility stays the same no matter who you pick.
What this means for you:
- You must choose an electric company before you can turn on the lights
- Over 100 companies want to sell you power, with rates and plans that vary wildly
- The physical delivery of electricity stays the same regardless of who you choose
- You’re responsible for shopping, comparing, and managing your electricity contract
The good news: Competition keeps prices relatively low. The cheapest rates in Texas are genuinely competitive with anywhere in the country.
The challenge: With over 100 companies and thousands of plans, finding the right one takes work. The most-advertised companies aren’t necessarily the best value.
Not All of Texas Is Deregulated
Before you start comparing companies, check whether your new address is even in a deregulated area.
Deregulated areas (you choose your company): Most of Dallas-Fort Worth, Houston, Austin suburbs, Corpus Christi, and other major metros served by Oncor, CenterPoint, AEP Texas, or TNMP utilities.
Regulated areas (no choice): San Antonio (CPS Energy), Austin city proper (Austin Energy), El Paso (El Paso Electric), and most rural electric cooperatives. Lubbock joined the competitive market in March 2024, so Lubbock residents now shop like the rest of deregulated Texas.
If you’re moving to a regulated area, you’ll contact that single utility directly. No shopping required. The rest of this guide applies to the roughly 85% of Texas where you have choices.
Timeline: When to Start Setting Up Electricity
Don’t wait until moving day. Start the process at least two weeks before you need power.
2-4 Weeks Before Move-In
Research and compare companies. This is where you’ll spend most of your time. Look at plans, read reviews, and work out what each company actually offers.
What to do:
- Determine your new address’s utility (Oncor, CenterPoint, AEP Texas, or TNMP)
- Research the companies that serve your area
- Compare rates at different usage levels
- Read the Electricity Facts Label (EFL) for any plan you’re considering
1-2 Weeks Before Move-In
Choose your company and sign up. Once you’ve done your research, enrollment takes about 15 minutes online.
What to do:
- Select your company and plan
- Have your move-in date ready
- Prepare for a credit check (or have deposit funds ready)
- Sign up online or by phone
- Request a specific service start date
3-7 Days Before Move-In
Confirm your service. After signing up, you should get a confirmation from your new company.
What to do:
- Verify your start date in your confirmation email
- Save your new account number
- Set up online account access
- Consider enrolling in autopay so you never miss a payment
Move-In Day
Power should be on when you arrive. If you scheduled correctly, you won’t need to do anything.
If power isn’t on:
- Call your company’s customer service line
- Have your account number and service address ready
- Same-day activation is often possible if there’s an issue
What You Need to Sign Up
Gather these before you start comparing plans:
Your new address details:
- Full street address with apartment number (if applicable)
- Move-in date
- ESI ID (Electric Service Identifier) if available—your landlord or the previous tenant may have this
Personal information:
- Full legal name (as it appears on your ID)
- Social Security Number (for credit check)
- Contact phone number and email
- Previous address (for credit verification)
If you don’t have an ESI ID: Don’t worry. Most companies can look it up from your street address. The ESI ID is a 17 or 22-digit number that identifies your specific service location. If you want to find it ahead of time, use an ESI ID lookup tool with your new address.
How to Choose Your First Texas Electric Company
With over 100 companies competing for your business, the options can feel overwhelming. Here’s how to narrow it down.
Step 1: Estimate Your Monthly Usage
Your usage determines which plans work best for you. Plans are priced differently at different consumption levels—a plan that’s cheap at 2,000 kWh might be expensive at 1,000 kWh.
If you’re coming from a similar climate: Use your previous home’s electricity bills as a baseline.
If you’re new to Texas heat: Texas summers are brutal. A typical 1,500-2,500 square foot home in Texas uses:
- Annual average: About 1,000-1,400 kWh/month (the statewide average across all homes was 1,096 kWh/month in 2024, per EIA)
- Summer: Far above that. Statewide, Texas homes used 88% more electricity in August 2025 than in April 2025 (EIA)
- Winter and shoulder months: Well below the annual average
Apartments use less. Larger homes use more. Older homes with poor insulation use significantly more in summer.
Step 2: Decide What Matters Most
Different companies are good at different things:
Lowest price: Budget companies like Gexa Energy, 4Change Energy, or Frontier Utilities focus on competitive rates with fewer frills.
Green energy: If renewable energy matters to you, Green Mountain Energy, Chariot Energy, or Rhythm Energy specialize in 100% renewable plans.
Name recognition: TXU Energy and Reliant Energy are the biggest names in Texas. You’ll usually pay more, but they have extensive customer service infrastructure.
Flexibility: If you’re uncertain about your new location and might move again, look for companies with short terms. Moving itself never triggers an exit fee, but a contract you can’t take with you means losing the rate you locked in.
No credit hassles: If your credit isn’t great, companies like Payless Power offer prepaid options that skip the credit check entirely. Learn more in our prepaid vs traditional electricity guide.
Step 3: Read the Electricity Facts Label (EFL)
Every Texas electricity plan comes with an EFL—a standardized document that shows what you’ll pay. This is more important than any advertised rate.
What to look for in the EFL:
Average price at 500, 1,000, and 2,000 kWh: This shows how the plan performs at different usage levels. Compare these numbers at your expected usage, not just the lowest number advertised.
Base charges: Many plans have a monthly fee regardless of usage. A “$9.95 customer charge” on a low-rate plan might make it more expensive than a higher-rate plan with no base charge.
Contract length: Plans range from month-to-month to 36 months. Longer contracts often have lower rates but less flexibility. Understand the tradeoffs in our fixed vs variable rate guide.
Early termination fee (ETF): What does it cost to leave early? Figure $150 on most 12-month plans, about $295 on 24-month terms, and up to $395 on 36-month terms at the largest companies (TXU, Reliant, Gexa, Direct Energy). A few, Rhythm among them, charge $20 for each month left instead. Note that moving out of the address never triggers the fee.
Renewable content: What percentage comes from renewable sources? Required disclosure in Texas.
Step 4: Compare Plans at Your Usage Level
Don’t chase the lowest advertised rate. That number is often the rate at exactly 1,000 or 2,000 kWh—not your actual usage.
Use ComparePower to compare plans at your expected usage level. Enter your ZIP code and estimated monthly kWh to see real costs, not marketing numbers.
For more context on specific companies, check our head-to-head comparisons to see how they stack up on customer service and reliability, not just price.
Deposits and Credit Checks: What to Expect
Most Texas electric companies run a credit check when you sign up. This determines whether you’ll need to pay a deposit.
How Credit Checks Work
Companies use your Social Security Number to check your credit history. Unlike applying for a loan, electricity credit checks are typically “soft” inquiries that won’t hurt your credit score.
Good credit: No deposit required. You’ll sign up and start service normally. There’s no single score that guarantees a waiver: each company sets its own cutoff, and many score you with utility-specific credit models rather than your FICO score.
Weaker credit or no credit history: Expect a deposit, typically $100-400. The state regulator (PUCT) caps it at the greater of one-fifth of your estimated annual bill or your estimated bills for the next two months (16 TAC §25.478), so a smaller home means a smaller deposit. Two situations bar a deposit outright: applicants 65 or older with no unpaid electric balance, and people with a family-violence certification. A clean payment record at a prior Texas electric company counts too, but it only forces a waiver at a company affiliated with your utility or at the default company the state assigns if yours fails. Any other company may consider it. Or skip the question with a prepaid plan, which runs no credit check at all. Moving to the Houston area with a deposit quote you can’t cover? There are no-deposit options in Houston that skip it altogether.
How to Avoid or Reduce Deposits
Use your payment history: If you were a customer of a Texas electric company in the last two years, owe nothing, and were late no more than once in the last 12 months, say so when you enroll. An affiliated company, or the default company the state assigns if yours fails, has to treat that as satisfactory credit and skip the deposit. Any other company may choose to, and many do. Ask, and be ready to show a payment history letter from your old company.
Provide a letter of credit: If you had electricity service in another state with no late payments, ask your old utility for a letter of credit. Plenty of Texas companies will waive the deposit on proof of a good payment history.
Choose a prepaid plan: Companies like Payless Power and Acacia Energy sell prepaid electricity. You pay in advance, so there’s no credit check and no deposit. You add funds as needed, similar to a prepaid phone.
Ask about deposit alternatives: Some companies accept a written guarantee agreement from one of their existing customers in place of a cash deposit.
Getting Your Deposit Back
If you do pay a deposit, it’s not gone forever. State rules require your company to return it, with interest, after 12 consecutive months of on-time payments. Set up autopay or payment reminders so a single miss doesn’t reset the clock.
Common Mistakes Newcomers Make
Newcomers make the same handful of mistakes. Here’s how to avoid them.
Mistake #1: Choosing Based on the Advertised Rate Alone
That “7.9 cents per kWh!” you saw advertised? It’s probably only that cheap at exactly 2,000 kWh usage. Use 1,500 kWh and you might pay 11 cents. Use 800 kWh and you might pay 15 cents.
The fix: Always check the EFL for rates at multiple usage levels. Calculate your actual expected cost, not the marketing number.
Mistake #2: Not Understanding Contract Terms
Many newcomers sign up for the first decent-looking plan without reading the contract. Then they’re shocked by a $295 early termination fee when they want to switch.
The fix: Before signing, know:
- Contract length (how long you’re committed)
- Early termination fee (what it costs to leave early)
- What happens at contract end (you land on a month-to-month rate that can move every cycle)
Mistake #3: Assuming Bigger Is Better
TXU and Reliant advertise everywhere—billboards, TV, stadium naming rights. Many newcomers assume the biggest names must be the best.
The reality: Marketing costs money, and that cost gets passed to you. Smaller companies often sell identical electricity at lower prices. The power flowing through your wires is the same regardless of which company sends your bill.
The fix: Compare actual rates and reviews, not brand recognition. Our head-to-head comparisons show how the big names stack up against lesser-known ones.
Mistake #4: Not Planning for Texas Summer
If you’re moving from a milder climate, Texas summer will shock you, both the heat and the bill. June through September can nearly double your usage compared to spring, as the August-versus-April figure above shows. Note what moves: your usage, not the price of your plan.
The fix: Plan for high summer usage when you pick a plan. One that looks cheap at 1,000 kWh can be expensive at 2,500 kWh. A fixed rate at least holds the price steady while the kWh climb.
Mistake #5: Waiting Until Moving Day
Electricity service in Texas requires advance setup. If you call on moving day, you might get same-day service—or you might spend your first night without air conditioning.
The fix: Start comparing plans 2-4 weeks before your move. Sign up at least a week ahead with a specific start date.
Mistake #6: Forgetting to Set Calendar Reminders
Your contract will end in 12, 24, or 36 months. Texas doesn’t roll you into a new fixed term without your say-so; unless you actively sign up for one, you land on a month-to-month product with no cancellation fee whose price can change every billing cycle. That price is rarely the best on the market. Your company has to send at least three written notices in the last third of your term, the final one at least 30 days out, but those are easy to lose in a spam folder.
The fix: The day you sign up, set two calendar reminders:
- 60 days before contract end: Start watching rates
- 30 days before: Begin shopping for your next plan
Mistake #7: Choosing Variable Rates Without Understanding the Risk
Variable-rate plans look cheap at signup. But “variable” means the company can reprice you every month, and nothing caps how far. You find out when the bill arrives.
The fix: If you’re new to Texas, start with a fixed rate. You’ll pay a small premium for knowing your price, and your August bill will be high because you ran the AC, not because someone moved your rate.
What About Apartments and Rentals?
Setting up electricity in a Texas apartment works the same as a house, with a few extra considerations.
Check your lease: Some apartment complexes have master-metered electricity, meaning your landlord pays the electric bill and charges you a flat fee or includes it in rent. If that’s your situation, you can’t choose a company.
Get the ESI ID: Your leasing office should have this. It speeds up the enrollment process significantly.
Consider shorter contracts: If your lease is 12 months, a 12-month electricity contract keeps things simple. State rules let you cancel without an exit fee when you move, but matching the contract to the lease saves you the hassle of transferring service, and the sting of losing a good rate if your next place is metered differently.
Ask about move-in specials: Some companies offer incentives for apartment dwellers, including waived deposits or bill credits for new movers.
Quick Reference: First-Time Setup Checklist
Use this checklist to make sure you don’t miss anything:
- Confirm your new address is in a deregulated area
- Identify your utility (Oncor, CenterPoint, AEP Texas, or TNMP)
- Estimate your monthly electricity usage
- Research and compare at least 3-5 companies
- Read the EFL for your top choices
- Calculate actual costs at your expected usage level
- Check contract length and early termination fees
- Gather your personal information (SSN, previous address)
- Sign up at least 1 week before move-in
- Confirm your start date in writing
- Set calendar reminders for contract expiration
- Set up online account access
- Set up autopay or payment reminders so you never miss a bill
Welcome to Texas
The Texas electricity market can feel overwhelming at first, but it rewards people who do a little homework. The competitive market means you have access to some of the best rates in the country—if you know how to find them.
Take the time to compare before you sign up. Read the EFL, not just the ads. Set reminders so you don’t get stuck on expensive rates when your contract ends.
Ready to start comparing? Browse plans on ComparePower to see what’s available at your new address. Or check our head-to-head comparisons to learn more about specific companies before you choose.
Welcome to Texas. Mind the heat. And don’t forget to shop your electricity.
Frequently Asked Questions
Do I have to choose my own electric company in Texas?
In most of Texas, yes. About 85% of the state is deregulated, meaning you have to pick an electric company before you can turn on the lights. Some cities like San Antonio, Austin proper, and El Paso have regulated utilities where you have no choice—contact that single utility directly. (Lubbock moved to retail choice in March 2024.)
How far in advance should I set up electricity before moving to Texas?
Start researching companies 2-4 weeks before your move and sign up 1-2 weeks before your move-in date. With a smart meter, most companies can start service in 1-3 business days, and many offer same-day connection (usually for a fee) if you order before their cutoff time. Waiting until moving day limits your options and may result in rush fees or same-day service problems.
Will I need to pay a deposit for electricity as a new Texas resident?
It depends on your credit. With good credit, most companies waive the deposit, and each sets its own cutoff. Weaker credit or no credit history typically means a $100-400 deposit, capped by PUCT rules at the greater of one-fifth of your estimated annual bill or two months of estimated bills. The rule bars a deposit outright for applicants 65 or older with no unpaid electric balance and for people with a family-violence certification. A clean recent payment record at a prior Texas electric company forces a waiver only at a company affiliated with your utility or at the default company the state assigns if yours fails; any other company may consider it.
Why are Texas electricity rates so different between companies?
The deregulated market means companies compete on price, but they also use different pricing structures. Some have low base rates but high fees; others use bill credits that only apply at specific usage levels. Always compare the Electricity Facts Label at your expected usage level, not just advertised rates.