Why, after so many years of deregulation, is there still increasing frustration, bill confusion—with thousands of customers switching electric companies every year?

Here’s how most people in a deregulated area choose an electricity provider: We see a low advertised price (and maybe recognize a famous face or voice behind it). The price probably ranges anywhere from 4 cents to 16 cents per kilowatt hour (kWh). Naturally, we lean toward the lowest advertised price, but, maybe we do our due diligence and visit a third-party website to compare prices.

Lowest price wins, right?

So why, after so many years, are customers still feeling confused—or even scammed—after they see their first electricity bill? By then, you’re in a contract for one or two years, until you can switch again to another provider. And the cycle repeats.

What can you do? Start here.

Every electricity provider is required by the Public Utility Commission of Texas to provide an Electricity Facts Label (EFL)—often something people never read. But, you should, because that’s where you’ll find information like contract terms, fees, power generation sources-and, a breakdown of the charges (the actual price you’ll be paying).

Look beyond the rate.

The EFL will show you the average cost of electricity in cents from 500 to 2,000 kWh consumption – common amounts for most residential customers. That includes transmission and distribution charges (sometimes referred to as the “delivery charge”) from your local utility. Providers are also required to include all fees and taxes on their EFLs.

But here’s where they really get you.

Some retail providers advertise prices simply based on the kWh rate—and nothing else. Others will show a more realistic average price. But you’ll find providers are getting pretty creative with reeling in the customers.


One provider, who shall remain nameless, advertised a rate of around 3¢/kWh for an average consumption of 1000 kWh/month. Sounds great, right? But! If you go even ONE kilowatt hour over that, you’ll pay more like 13¢/kWh, and your bill will go from $34 to $134!

I know what you’re thinking-how do they sleep at night?! Probably on a fancy giant king sized bed, if we’re being honest.

How do we decide?

So with this information; how do we choose over all those big incentives we find in our mailbox? How do you pass up a $300 (insert eye roll) sign up bonus?

Plot twist!

The most loyal, happy customers, it seems, don’t stick with an electricity provider based on pricing at all (aside from those few who just get a kick out of playing the market). The irony in the choice and “low rates” is that our bills ultimately don’t vary much from one company to the next. If that first advertised rate seems super low-then there’s usually a catch in the extra fees.

What keeps customers around are real rewards they can use, reliability and good old-fashioned customer service. Trust, friendliness, the human element.
In 2018…who’d have thought?

Calculate your real electricity rate

Sources: Electricchoice.com