Most Texans know they can switch electricity providers. But providers are counting on you to never figure out when you should.
Here’s their playbook: Make the comparison process confusing. Bury contract end dates in fine print. Send “renewal offers” that sound like favors but are actually worse than what strangers off the street can get. The longer you stay uncertain, the longer they keep you paying inflated rates.
This guide exposes the specific situations where your provider is almost certainly overcharging you—and the warning signs that mean it’s time to shop.
The Five Red Flags Your Provider Hopes You Ignore
1. Your Contract Is Ending (And They’re Counting on You to Miss It)
If your contract ends within 30-60 days, you’re in the danger zone. This is where providers make their real money.
Here’s the game: Most providers automatically roll you to a month-to-month variable rate that’s 2-3x your current price. Others auto-renew you into a new contract—but never at the best available rate. New customer deals are almost always better than renewal offers. Your “loyalty” is being exploited.
What to do: Check your bill for your contract end date. Texas law gives you a penalty-free switching window during the last 14 days of your contract. Use the 30 days before that to shop and compare.
We cover the mechanics of timing your switch in detail in our guide to the best time to switch. The short version: start shopping 30 days before your contract ends, lock in a new rate, and schedule the switch for your penalty-free window.
2. Your Rate Looks Wrong Compared to the Market
Pull up your latest bill. Find your average price per kWh (it should be listed, or divide your total charges by your usage). Now compare that to current market rates.
If you’re paying more than 15-20% above what’s available for similar plans, something’s off.
Common reasons your rate might be out of sync:
- You signed during peak summer when rates were high
- You’re on an auto-renewed plan at a higher rate
- You didn’t shop around when you signed up
- Wholesale prices have dropped since you locked in
What to do: Check current rates for your usage level. If you can find comparable plans (same contract length, same plan type) at significantly lower rates, calculate whether switching makes sense—even with an early termination fee.
The math usually works like this: If you’re overpaying by $50/month and have 8 months left on your contract with a $150 ETF, you’d save $250 by switching now (8 months x $50 minus $150 fee). That’s $250 you’d lose by waiting.
3. Your Usage Has Changed Dramatically
The plan that made sense when you signed up might not make sense anymore. Life changes affect electricity usage, and usage changes affect which plan works best.
Changes that should trigger a plan review:
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You got solar panels: Your old plan probably doesn’t include solar buyback. You’re leaving money on the table every sunny day. Look at providers like Rhythm Energy or Green Mountain that offer solar buyback programs.
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You started working from home: Your daytime usage just doubled. Free nights plans are now a terrible deal since you’re home during expensive peak hours. You need a different structure.
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You bought an EV: Adding 300-500 kWh/month for charging changes everything. Time-of-use plans with cheap overnight rates can save you hundreds annually on charging costs.
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Kids moved out (or in): A jump from 1,200 kWh to 800 kWh monthly—or vice versa—changes which plans work. Some plans have minimum usage requirements or tiered pricing that makes them great at one usage level and terrible at another.
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You downsized or upsized: Moving from a 3,000 square foot house to a 1,200 square foot apartment? Your usage is dropping by half or more. Plans optimized for high usage won’t serve you well.
What to do: Pull your last 12 months of bills and calculate your average monthly usage. Then look at the Electricity Facts Label for current plans at the 500, 1000, and 2000 kWh price points. The plan that wins at your actual usage level is the one to choose.
4. Your Provider Is Giving You Problems
Sometimes the signal to switch isn’t about price—it’s about trust. Certain provider behaviors are red flags that suggest it’s time to move on.
Red flags that warrant switching:
Billing problems: Unexplained charges appearing on your bill. Estimated reads that consistently run high. Bills that arrive late or inconsistently. One error is a mistake; a pattern is a problem.
Customer service failures: Can’t reach a human. Long hold times. Issues that don’t get resolved. Representatives who don’t know their own products. You shouldn’t need to fight for basic service.
Contract shenanigans: Your renewal offer is significantly worse than new customer rates. Terms changed mid-contract with minimal notice. Fees that weren’t clearly disclosed when you signed up.
Financial instability: Your provider is in the news for financial troubles. They’ve been acquired by another company. You’re receiving notices about “business changes” that seem designed to obscure bad news.
Complaint patterns: Check the Public Utility Commission of Texas complaint records. If your provider has significantly more complaints than competitors relative to their customer count, that’s meaningful. Look for providers known for great customer service.
What to do: If you’re experiencing ongoing issues, document everything and start shopping for alternatives. The ETF might be worth paying to escape a bad provider. You can also file complaints with the PUCT, but that’s a slow process—switching is faster.
5. Your Life Situation Changed
Certain life changes create natural switching points. Even if your current plan is fine, these moments should prompt a review.
Moving to a new address: You need to set up service anyway. Don’t just transfer your existing plan—this is a chance to shop fresh. Rates vary by TDU service area, so your old deal might not even be the best option at your new address.
Buying vs. renting: Renters might prefer shorter contracts for flexibility. Homeowners can lock in longer terms for better rates since they know they’re staying put.
Getting married or divorced: Household composition affects usage patterns. Two-person households use electricity differently than one-person households. Review your plan after major household changes.
Retirement: Your schedule just flipped. Working from home means more daytime usage. Free nights plans might suddenly make sense—or stop making sense entirely.
Financial changes: Lost a job? Tightening your budget? Your electricity bill is negotiable in Texas. Shop for the cheapest available plan, even if you have to pay an ETF to get there. The monthly savings often justify the one-time cost.
When NOT to Switch
Switching isn’t always the right move. Here are situations where staying put makes sense.
You just signed a contract: Unless you’re dramatically overpaying, the ETF usually wipes out any savings from switching early. Run the math before jumping.
You’re moving soon: If you’re leaving your address within a few months, a short-term plan or riding out your current contract often makes more sense than locking into something new.
Your rate is genuinely competitive: Not everyone is overpaying. If your current rate is within 10% of the best available offers, the hassle of switching might not be worth a small savings.
You’re in peak summer: July and August are the worst months to shop for a new plan. Rates are highest, and your options are most limited. If possible, wait until fall or winter to lock in a better deal.
Your provider is solid: Good customer service has value. If your provider treats you well and their rates are reasonable, loyalty isn’t irrational. The cheapest provider with terrible service might cost you more in frustration than you save in dollars.
The Decision Framework: A Step-by-Step Process
Not sure what to do? Walk through this process.
Step 1: Know Your Numbers
Before you can evaluate whether to switch, you need your baseline:
- Contract end date: When can you switch without penalty?
- Current rate: What are you actually paying per kWh, all-in?
- Monthly usage: What’s your typical consumption in kWh?
- Early termination fee: What would it cost to leave early?
All of this is on your bill or in your contract documents.
Step 2: Check Current Market Rates
Compare what you’re paying to what’s available today. Use your actual usage level—a plan that looks cheap at 2000 kWh might be expensive at 1000 kWh due to minimum usage fees or tiered pricing.
Make sure you’re comparing apples to apples. Fixed rates to fixed rates. Include all fees in your comparison, not just the headline rate. Read the Electricity Facts Label.
Step 3: Calculate the Real Savings
If switching requires paying an ETF, do the math:
(Current monthly cost - New monthly cost) x Remaining months - ETF = Net savings or loss
If the number is positive and significant, switching makes financial sense even with the penalty.
Step 4: Factor in Non-Price Issues
Sometimes the decision isn’t just about dollars:
- Is your current provider giving you problems?
- Does your current plan structure fit your usage patterns?
- Do you need features your current provider doesn’t offer (solar buyback, green energy, prepaid flexibility)?
A slightly more expensive plan that actually fits your needs might be worth it.
Step 5: Time Your Move
If you’ve decided to switch:
- Inside your penalty-free window: Switch immediately before you roll to a worse rate
- Outside your window but the math works: Schedule the switch and accept the ETF
- Outside your window and the math is borderline: Set a reminder to switch when your window opens
Seasonal Considerations: When Rates Are Best
Texas electricity prices follow predictable patterns. If you have flexibility on timing, use it.
Best time to lock in rates: November through February. Demand is lowest (nobody’s running AC), providers are competing for customers, and you can often lock in rates 10-20% below summer prices.
Second-best window: March through May. Rates are rising but deals are still available before summer demand hits.
Worst time to shop: June through August. Peak summer means peak rates. If your contract expires in July, you’re choosing from the most expensive options of the year. Plan ahead to avoid this.
Fall recovery: September through November sees rates dropping as temperatures cool. Another decent window for shopping, though not as good as winter.
If your contract ends in summer, consider signing a shorter-term plan (6 months) to bridge to a better shopping window, then lock in a longer contract during winter.
The Mechanics of Actually Switching
Once you’ve decided to switch, the process is straightforward:
- Choose your new provider and plan: Sign up online or by phone
- Provide your info: Current account number, ESI ID (on your bill), service address
- Pick your switch date: Usually 3-7 days out minimum
- New provider handles the rest: They coordinate with your old provider and the TDU
Your power stays on continuously. The switch happens at midnight on your chosen date. You won’t notice anything except a different name on your next bill.
Key Takeaways
Switch when:
- Your contract is ending within 30-60 days
- You’re paying 15-20%+ more than current market rates
- Your usage has changed significantly
- Your provider is causing problems
- Life changes have altered your electricity needs
Wait when:
- You just signed a contract and the ETF wipes out savings
- You’re moving soon
- Your rate is genuinely competitive
- It’s peak summer (shop in fall/winter instead)
Always:
- Know your contract end date
- Compare your current rate to market rates quarterly
- Read the Electricity Facts Label before signing anything
- Run the ETF math before switching mid-contract
The power to choose your electricity provider is one of the benefits of living in deregulated Texas. Use it strategically, and you’ll save money without overpaying for power you don’t need from a company that doesn’t treat you right.
Ready to compare providers? Check out our head-to-head comparisons to see how specific companies stack up, or browse our best provider lists to find the right fit for your situation.