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How To Choose A REP In A Deregulated Market

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In 1995, the Texas Senate passed Bill 373, marking the beginning of electricity deregulation in Texas. Under this Bill, public utilities would be required to accept and acknowledge new and wholesale energy generators and give them access to transmission capabilities—without charging an arm and a leg for the privilege. As you might imagine, this initial effort was met with significant resistance, and it wasn’t until 2002 that the Texas State Legislature passed Bill 7, officially deregulating the electricity industry for some areas of Texas. Right now, roughly 85% of Texas is considered deregulated.

What this means for us now, essentially, is that many Texas power consumers are able to select their electricity service from the range of retail electric providers (REPs) in the area. REPs are encouraged to compete for customers in an open marketplace—so you have more purchasing power than ever before when it comes to sourcing your energy.

That’s a lot of responsibility, especially for the conscientious homeowner. Here are a few of the things that we recommend looking for when you’re ready to choose a retail electric provider (REP), if you want to get the most bang for your buck.

Capitalize on the Competition

The foundation of the deregulated market is the concept of competition. Since REPs have to compete in order to earn your business, prices and additional services may vary widely—so do your homework before committing. Some companies will offer customer awards, no credit check, renewable energy options, and other perks, alongside their price per kilowatt hour. Don’t be swayed by a fancy text alert system—what matters is how much you end up paying out of pocket every month. Take advantage of your choices here and shop around before signing any contracts.

And if you’re environmentally inclined, but price-conscious… You may be surprised at how affordable some renewable energy sources can be!

Variable Rates: Yes or No?

Are you a risk-taker? Consider a REP with a variable rate contract. Your rate will move up and down with the market each month, and depending on demand, you may pay much less than you would have in a fixed-rate plan during parts of the year. In contrast, a fixed-rate plan is predictable, but you may end up pay more in the long run. It’s important to know which type of plan you’re most comfortable with before selecting an energy provider and looking at their rates for that specific type of plan.

Contract Term

When choosing an energy provider, you’ll typically sign a contract that ranges anywhere from 6-36 months. A shorter-term contract can be less expensive, but you may get locked into a much higher rate when that initial contract is up. When choosing a retail electric provider, you’ll want to compare rates at each contract length, and choose the right combination of sustainable price and contract length for your needs.

Fun fact: One of our favorite things about going solar is that even when you finance a system, your electric bill becomes predictable for the next 25+ years.

Real-Time Wholesale Energy  

There is one company that offers pay as you go billing with no annual contracts. Griddy charges a flat $9.99/month fee and gives you access to real time wholesale electricity rates.  This plan is for those who can shift their loads and use more electricity when wholesale prices are generally lower such as a night.  For some solar owners, this might be a good option because solar is usually pushing energy to the grid when electricity is priced higher.  So, you could buy energy at night when prices are lower and then sell excess energy in the day and afternoon when prices are higher.

Solar Only Plans

 There are several plans that offer either a renewable energy plan or a solar only option that give you the choice to “go green” without installing solar on your roof.  For many that do not own a home, or their roof is not suitable for solar, then these can be great options.  Chariot Energy is the only retail energy provider that only offers solar only options.  Their rates are very competitive and can be viewed here.

Net Metering

For solar-powered homeowners, this is the big one. Not all REPs are created equal, and most don’t use a net metering system to keep track of the energy flow to and from your home. This is a red flag for solar owners, since net metering is how you get credited for your energy production. While most major utilities in Texas use net metering, make sure to keep an eye out for the ones that don’t—and avoid them, if you’ve gone solar.

In a deregulated market like this one, it’s essential to arm yourself with the facts before you’re ready to choose a retail electric provider. Personally, we like to think that Texas’s dedication to free-market ideology makes it a great place to go solar, since you’ll be rewarded for every penny of energy you produce that you don’t use. (Thanks, net metering!) That’s just part of why we’re so dedicated to bringing solar to every rooftop in Texas—we believe you can save money and save the environment at the same time.

Ready to see how much solar could save you on your monthly electric bill? Check out our solar calculator.