Not everything is as it seems in Texas, especially when it comes to retail electricity plans. Promises of savings oftentimes sound too good to be true when the electricity prices are sky high.
Certain areas of Texas have a deregulated energy market, which means you have a say on where your electricity comes from. If you you live in a deregulated market and aren't happy with your retail electric provider, you have the power to cancel your electricity plan and find a better fit for your home and energy preferences. And with power companies competing to offer the best prices and reliable service, you don't have to feel stuck in your current plan forever.
Not all electric plans are created equal, though, and canceling your contract before its end date may come at a price. Here's what you need to know about canceling your Texas energy plan.
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How energy plans work in Texas
There are two sides to the energy market in Texas: regulated and deregulated. In a regulated market, you don't have a choice on where your energy comes from. Everyone in regulated areas, like Austin or San Antonio, receives power from the same utility, and electricity rates are monitored by the government.
"If you don't like their service or if they have a rate spike, you deal with it," Carson Clayton, a campaign director at the Texas Public Policy Foundation, told CNET. "Canceling your energy plan in a regulated market means you [won't] have electricity."
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In deregulated areas, like Houston, Dallas and Fort Worth, you can compare electric rates and choose the energy plan that best fits your household's electricity usage and budget. Because consumers have a choice, energy companies compete to offer lower rates or better customer service as incentives to choose their plan.
If you're unhappy with the service, you can cancel your plan and switch providers. However, if you terminate your contract before its end date, you'll most likely have to pay what's called an early termination fee.
Reasons to cancel an energy plan in Texas
Choosing to cancel your electricity plan in Texas can boil down to many factors, like finding lower prices elsewhere or having a bad customer service experience with your current provider. But before canceling, make sure to review your electricity facts label for any early termination fees.
Find a better deal
Expensive energy bills are likely the number one reason to search for other plans. You can find a better deal by comparing electricity rates in your area. "As electricity bills rise, people pay closer attention," Clayton said. "They notice the itemized receipts of what they're actually paying for and how expensive it gets. When it comes up in conversation with friends, you learn about other options."
Some utilities offer plans with certain benefits, like free nights or weekends. If you are flexible enough to shift your usage, this might save you money. Other companies may offer bill credits based on how much or how little energy you use. If you review your past bills and notice a trend of usage higher than 1,000 kilowatt-hours, you may find a better price for a plan that credits your usage. When you find a price and provider you like, you'll need to contact your current provider to cancel your plan and make the switch.
Moving to a new address
If you move to a location outside of your current provider's service, you can cancel your plan without an early termination fee. "It's important to note that your most recent electric provider will need documentation of your move in a proactive way," said Katie Collins, managing editor of CNET's energy and personal finance coverage. "You can't just move without notifying your provider and expect them to waive the cancellation fee."
If you move to a new address that's still within your utility's service area, you might have to pay a fee to cancel your plan. "Depending on your terms of service agreement, some providers might require you to transfer your plan to your new address," Collins said. "If your contract is ending soon, the electric provider might let you go without penalty."
Early termination fees and terms and conditions vary by provider. You can find the details listed on your electricity facts label. To avoid cancellation penalties, you'll want to be proactive with your communication with your provider, Collins said. "Most electric providers have phone apps and chat options to help you with that."
Unsatisfied with service
If you're very unhappy with your current provider's service, paying the early termination fee may be worth it to cancel. Poor customer service, billing errors or frequent outages is frustrating. Before jumping ship to another plan, it's a good idea to read reviews from other customer experiences. Find out if other providers offer any incentives that work for you and your energy usage habits.
"It's rare, but some providers offer to pay your early termination fee for you to switch to them," said Collins. "Don't take anyone's word for it, though, unless it's in writing."
You can usually find your plan's early termination fee in the discourses area on your electricity facts label.
Revolution Energy/Sarah Drolet/CNETFor most energy companies in Texas, you can contact customer service through an online service form, chat, email or over the phone to cancel your plan. Expect the agent to offer you promotions or discounts as a last-ditch effort to keep your business. If the reason you are canceling is because of high rates, you can try negotiating the price down.
"This could mean the company canceling your current plan and re-enrolling you into a new plan with a lower rate, but it might extend out your agreement timeline," Collins said. "Make sure to ask."
Otherwise, the cancellation process is pretty straightforward. But you might be required to pay an early termination fee. This type of fee is typically in the form of a flat fee (usually around $100), or you might be charged a certain amount for each month you have left on your contract. You should be able to find your plan's early termination fee on its electricity facts label.
After canceling, you'll receive a final bill from your old provider. Make sure all charges are correct and that any remaining balance is paid. To keep your lights on, you'll need to secure a new plan from a different provider of your choice. Clayton recommends using PowerToChoose, an electricity rates comparison website run by the Public Utility Commission of Texas, to find a better deal.
Get help with energy suppliers in Texas
If you're having issues with your current electric provider in Texas, there are several resources you can reach out to for assistance.
- Customer service at your utility: Try contacting your electricity company directly. If they can't help resolve the issue, consider other options.
- Public Utility Commission of Texas: The PUCT mediators can provide resources and help manage disputes between you and your energy company. The first step is to file a complaint on the PUCT website.
- Energy assistance programs: If you need help paying your energy bills, there are programs that provide financial aid to low-income households, like the Texas Comparative Energy Assistance Program, for instance.
- Energy comparison websites: These websites can be helpful with comparing electric plans and providers.Websites like PowerToChoose and SaveOnEnergy (CNET's sister site), are just a couple of options to choose from.