Texas law has allowed for fierce competition in the market for home and business electricity service. Getting the lowest electricity rates in Texas is now just a matter of finding the most competitively priced retail electric provider, or REP. Although, not all areas of Texas are open to the free market, most residents of the state can take advantage of multiple competing Texas energy companies.
The electric system in Texas, through deregulation, works on two levels. The electricity is produced by power generation companies. They operate the various power plants located across the state, including generators run on coal, natural gas, nuclear power, solar, wind, and water. The power generation companies act as wholesalers that sell their energy to the REPs. The REPs, in turn, provide transmission and electric delivery services to end users, whether they are businesses or families. In addition to the distribution, the REPs handle customer service and billing.
REPs are free to charge any amount they wish for the electricity they are receiving from the power generation companies. The rates are controlled by the forces of the free market. So far, this has produced some exceptionally low rates for the average consumer. The trick is that it is up to the consumer to compare the Texas power alternatives available in their area. It has been found that the average consumer who takes the time to find the lowest electricity rates in Texas saves 10 to 20 percent over their current rates. Businesses have been found to save up to 30 percent over their current rates.
Changing electric companies is not mandatory, but it is the only way to get the lowest electricity rates in Texas. An REP will not usually negotiate their rates with each individual customer. However, consumers have been known to negotiate fees. Some REPs will charge a service fee for changing providers. This can often be removed through successfully negotiating with a company sales representative. Other companies may charge an early termination fee to cancel their service. It is imperative to consider all associated fees when comparing the lowest electricity rates in Texas.