Comparison Shopping Electricity Providers

Once a year, I used to quickly compare rates for competing electricity providers in my area when our contract comes up for renewal.

Not really doing the math, I did not realize how much I could have saved by effectively analyzing the different plans.

It wasn’t until I took the time to learn about the “Electricity Facts Label,” that I began saving quite a bit during the hot summer months here in the south.

When comparing service providers, the three most important factors on this label are: the “Energy Charge,” “Base Charge/Service Fee,” and “Average Price per kWh.”

However, there are many other factors to consider, as well.

Here’s a step-by-step guide on how to analyze the options and make an informed choice about your electric provider in the deregulated areas of Texas.

Check with your state’s public utility commission to determine if you are one of the 24 deregulated states, and if so, what similar assistance is available to you.

1. Go to and click on “Compare Offers.”

This is Texas’ Public Utility Commission’s official Electric Choice Website that lets visitors compare retail offers.

2. Enter your zip code and “Submit.”

3. On the Available Offers page, if your zip code has multiple TDUs (which this page will tell you, if there are), then chose your “TDU Service Area” in the left sidebar, titled, “Search Criteria” and then hit “Submit.”

If you are not sure which TDU you are, look at your latest electric bill and find where it addresses “Delivery Charges.”

Note: If you are interested in the “Renewable Content,” which is the percentage of renewable energy the provider offers, change the selection in the drop down menu to your desired choice.

4. Click the “All” tab at the top, which resets the current offers.

5. Click the column title, “Avg. Price/kWh (1,000 kWh),” until you see the little arrow pointing up to show that the column is sorted in ascending order, with the least expensive plans listed first.

6. Scroll through the first several offers, reading their “Electricity Facts Label,” “Terms of Service,” and “Special Terms,” making notes as you go, regarding:

Price per kilowatt hour (kWh) based on 1,000 kWh of monthly usage (in cents) –

Be careful! One company that I came across raised the rates at 2,000 kWh. Not sure about this, but I avoided it.

Base charge/ Service fee –

Some companies will only charge a base charge or service fee if you drop below 1,000 kWh for the month, others charge one regardless. Since we use gas to heat our home, I reviewed my electric bills from previous winter months and determined that we had not dropped below 1,000 kWh of usage ever.

TDSP Pass-Through Delivery Charges (both the base charge and the per kWh charge) –

Confirm that these charges are passed through without mark-up. If a company states that they have not been marked-up, then this number will not differ from a competitor that states the same.

Any other charges or recurring fees –

These might include a Service Processing Fee, Returned Payment Charge, Disconnect or Reconnect Charges or a Late Payment Penalty.

Type of contract (fixed, variable or indexed) –

I always prefer a fixed rate offer, especially since the lowest offers frequently include fixed rate options. There are too many variables that can make a rate fluctuate.

Contract term –

This is important to know since once the contract expires, the plan generally moves to a month-to-month, variable product with much higher rates. Finding a contract can take a matter of a few short minutes, so choosing a short-term contract should not be a deterrent. In fact, these contracts usually offer significantly lower rates.

Termination fee –

This is important for people who are planning on moving or discontinuing service for another reason.

Deposit amount required –

If required, a deposit can be quite hefty, but is generally refundable. Be careful, as the deposit is not mentioned on the Energy Facts Label. Instead, it is detailed in their terms of service.

Application Fee and/or Credit Application Review Fee required –

These can also be high, but unlike a deposit, are not usually refundable. They are also part of the terms of service.

Payment options –

These might be noted in the special terms section, since lower rates sometimes require “Electronic Billing” and “Auto Payment” with a credit card or debit card.

Smart Meter or other equipment required –

Lower rates might also stipulate that newer technology be in use at your residence. Call your current service company to find out if you already have a Smart Meter installed and if not, how to go about getting one.

Generating excess renewable energy –

This is not always an option, however, some areas have buy-back plans available for people that generate excess energy.

7. After making notes for each of these competitors, you should be able to quickly determine the best option.

For example, I found a:

3 month fixed-rate contract

Energy charge: $.0247/kWh

Average Price per kWh: $.067 @ 1,000 kWh and $.063 at 2,000 kWh

Service fee: $9.95, which is automatically waived when I use more than 1,000 kWh of electricity in a month (which I always have)

TDSP Pass-Through Delivery Charges are passed through without mark-up

No deposit or application fee

No special payment requirements (electronic billing or automatic payment)

8. Then, search online for a promo code that can be used in conjunction with this plan. There is a good chance you will not find one, but it’s worth looking for.

9. Sign up with the company, by providing your:

Residential address
ESI ID number, which is on your bill
Social Security number or Driver’s License number (for a credit check, this is how the deposit can potentially be waived)
Start date for service
Credit card number and billing address, if they require automatic payment
10. For your records, print out the:

Offer that you signed up for
Residential terms of service
Confirmation email
Note: If you keep your comparison shopping notes, then when it comes time to shop prices again, you will know exactly what you are looking for.

Note 2: Put your contract expiration date in your calendar to let you know 2 to 3 days before, so that you can start pricing competitors.


Some electric companies offer gimmicks such as prepaid cards or points.

I did the math for one in particular… a 2 year fixed rate contract that offer a $350 prepaid card.

When I read the fine print I discovered that their energy rate is so high that the prepaid card does not remotely match the savings that I will receive by comparison shopping rates a couple of times a year.

I saved well over $1,200 last year alone by shopping electric rates and contracts.

I hope this step-by-step guide helps save you a little aggravation and a lot of money when finding your electric provider.

Here’s to another Inspired Minute!

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