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How Do You Shop for Electricity (so that You Save Money)?

Can you switch your electric company? I'll walk you through how to shop electricity plans to save money (without losing your sanity).

A few years ago while trying to figure out how to switch electricity providers, I gave up.

woman on laptop on couch, text overlay "how to shop for an electric plan"

By “giving up”, I mean I attempted to sift through a hundred other offers and find an alternative after learning that our current electricity provider was charging me for not using enough electricity (a common charge, by the way).

And it was a disaster.

There were average prices, base rates, and enough types of fees to make me want to go running back to my overpriced plan for another year.

I don't want you to go through the same experience, especially since I've learned so much about choosing new electricity providers and can help you through the mess.

But first up? Let's see if you CAN switch your electricity provider.

Can I Change Electric Companies (Can I Switch Power Companies)?

The only way that you can change electric companies and select your “retailer energy provider” (REP) of choice is if you live in what's called a deregulated market.

And “deregulated” can mean:

  • Deregulated electricity markets
  • Deregulated gas markets
  • Deregulated electricity AND gas markets

The following states have deregulated electricity markets (or deregulated electricity AND gas markets) for residential customers:

Hint: not every area in the state that is deregulated, is deregulated. For example, Texas is only 85% deregulated. So you may still live in an area that is regulated, meaning you can't choose the electric company you want, even though technically you're in a state with a deregulation market. 

CaliforniaMarylandNew York
IllinoisNew HampshireRhode Island
MaineNew JerseyTexas
Washington DC

You'll need to verify if your particular area is in a deregulated market, and you can do that using one of the methods below (just insert your zip code into one of the energy websites in the next section).

Can't switch energy providers? Check out my energy saving tips for people in apartments

How Do I Switch Energy Providers?

So, you're in a deregulated market. Awesome!

You now have the power to choose which energy provider you want, and within each energy company, which plan you want.

While it's a really nice option to have, it can also be an overwhelming experience to go through.

Let me break down how to switch energy providers, as well as give you the electricity price comparison tools to make it much simpler than when I went through the process several years ago.

Step #1: Find Out if You're in a Deregulated Electricity Market

As discussed above, you can't switch power companies unless you're in a deregulated market.

You can verify if your zip code is in a deregulated market by entering it into any of the Step #3 websites you choose to use below.

Step #2: Gather Your Current Electric Plan Information

In order for you to shop around for a better deal – and actually save money – you need to know what your current electric plan looks like.

You'll want to:

  • Grab an actual electricity bill (either a paper one, or access one online – this will be good, as you can see multiple months instead of just one)
  • Highlight or underline the fine print where it states how much you're paying for your current plan

In order to compare electricity plans with your current plan, you'll need to know:

  • Your energy charge (for example, 8.5¢/kWh)
  • Your base charge (if any)
  • Any other charges that are passed through to you
  • Your average usage (yes, it matters when you're pricing plans, as plans charge different energy prices based on usage – you don't want to get a price estimate that isn't going to actually be the price YOU get because your usage is different!)

Hint: Your “average price per kWh” is really the energy charge + the base charge + any other charges, divided by your total energy usage for the month. This number is a bundle, so it's best to know what specific charges go into the average price per kWh when you shop around.

Step #3: Choose a Website to Shop Around

Things have really changed from several years ago. When I first attempted to shop around for electricity plans and how to change electricity providers, there was only one way to do it – using the state-run PowertoChoose.org.

While this option is still available, it's not really the most efficient use of your time.

There are multiple tools and energy shopping websites out there that make this part of the process wayyyyy easier than it was before.

Let me outline each tool for you, and what using them looks like.

Tool #1: Electric Choice

Electric Market: Nationwide

This option is nationwide. So, no matter which of the deregulated markets you're in, you'll find plan choices using this tool.

Once you input your zip code, you'll want to Select your average monthly usage in the lefthand sidebar to see accurate rates (the kilowatt hours start from 500 and go up to 10,000 kWh, in increments of 500 kWh).

You can further refine your search based on if you want a fixed or variable plan, if you want to just see specific electricity suppliers, and by contract term length (of between month-to-month all the way up to 2+ years).

Tool #2: Choose Energy

Electric Market: 14 states

Choose Energy has a marketplace comparison tool that is free to use. It covers 14 states (you enter your zip code to make sure you're in a deregulated area).

Tool #3: ComparePower.com

Electricity Market: Texas

This is a free service, where you can cut through a lot of the information overload to get to the plan that will save you money, based off of your personal usage.

That's right – your personal usage matters in terms of pricing (a lot). Your monthly electricity usage varies drastically throughout the year.  The average home uses drastically more energy in the hot summer or the cold winter months than during the fall or spring months.

Competitive retailers offer low pricing (known as teaser rates) at the commonly searched usages of 500, 1000, and 2000 kWh, but charge a different (many times higher) rate if your usage falls outside of those commonly searched usage points.

Additionally, some energy plans offer discounts known as bill credits if a certain amount of energy is used each month.

Finding your best plan requires reading the Electricity Facts Label (EFL) and calculating and comparing the total cost for the plan across all 12 months of the year or as many months as you have historical usage data.

Comparing the total cost of the plan for the entire year takes into account the summer/winter highs as well as the spring/fall lows and applies the appropriate rate and discounts for each month’s usage.

Savvy energy shoppers in Texas will read the pricing terms in the EFL for each plan they are comparing and make an excel spreadsheet that computes the monthly energy costs for all usages. They then add up the costs for each month to compare the total cost of ownership for the entire year. With hundreds of plans to compare this math can take hours upon hours of time.

ComparePower does the math for you. All you need is your usage history. Spending 10 minutes to get these 12 numbers can save you a considerable amount of money on your energy bill over the course of a year. No spreadsheets required.

You can search for plans based on one of their pre-set kilowatt usages (such as 500, 1,000, 0r 2,000 kWh), OR, to get the best rate you can get a few of your past utility bills and enter your historical usage month by month on ComparePower.com. Your usage history is also available on your current providers online account.

Then – and this is brilliant – they will break down the total price you're going to pay for each of the plans listed, based on your usage.

WOW do I wish something like this had been around when I tried to figure out how to switch electricity providers on my own all those years ago!

When I input my zip code, I'm given two choices:

  1. Look at all the 29 plans available for my area.
  2. Use their guide to help me figure out the cheapest energy plan (that seems like the best option, right?).

I answered just a few quick, easy questions (like whether I'm moving in, or want to switch, and if it's a home or apartment), and they came back with their number 1 pick plan for me.

But you know what? I don't have to take what they say at face value, or use the company they think is best; because you can scroll down on that same page and see a comparison of what you'll pay – based on your usage – for each of the other plans.

When I do choose the right plan for me (after quickly looking at the snapshots of pricing and such)? The number to call them is right there (or you can click a button for signing up online).


Hint: if you have your usage history for each of the months in the last year, you can also click “shop prices based on usage history”, and then input each of your last 12 months' usage. It will then show you what you would have paid in each month, for EACH plan. How's that for empowering information! I'll probably do this option, as I geek out on this sort of thing.

Tool #5: PowertoChoose.org

Electric Market: Texas

This option has some real flaws to it, though it does provide lots of great information for you (that's the thing – it provides an overWHELMING amount of information for you to sift through, that's not entirely accurate anyway because it's not based on your personal usage).

When I searched for my own options, I got 168 plans for my zip code (yes, that's plans – not companies).

  1. On average, how much electricity do you use?  (500, 1,000, 2,000 kWh, or I don't know)
  2. Which plan types are you interested in? Fixed, variable, or indexed (market rate)
  3. How long do you want your contract to last?

After filling in this information, my plan results were narrowed down to 58 plans.

That's better…but still pretty overwhelming to sift through.

💡Switching Electricity Companies – Texas

Are you switching electricity companies in Texas? Then you’re in luck – there’s a really great resource (and it’s free) that will sift through all of the companies to find the best plan FOR you.

First though, you need to know two things:

  1. Published Prices are Often Not Accurate: In Texas, average kWh pricing varies depending on how much electricity you use. This means that the per/kilowatt price published is usually not the price you’re going to receive (companies will advertise their lowest kWh pricing rather than the pricing you’ll actually receive). Tricky, right?
  2. Electricity Plans have a Lot of Fine Print: Those cheap electricity and free electricity plans? They all come with a lot of fine print. You have to wade through that to make sure the plan is right for you.

Having said all that, I want to tell you why ElectricityPlans.com is an awesome, free tool to use to shop around for a Texas energy plan.

For starters, they review the offers from each company. They only post plans that make sense for most customers.

They also break down the rate details in each plan. They do the math so you don’t have to. And if a plan is best for a certain level of usage, you can see that in the summary.

Here's an example search result:

screen shot of graph that shows price per kilowatt broken down by usage tiers

And probably my favorite tool of theirs? Is the PlanScan. You literally upload one of your previous bills, and they’ll hand-select the plan that is cheapest for you.

I filled this out myself and was super impressed with the results.

After submitting ours, they found a plan that will save us $23.26/month (that’s an approximate annual savings of $279.12!).

screen shot with arrow pointing to electricity savings

You seriously want to check these guys out if you’re in the Texas market (hint: they’re also in Ohio and Connecticut, in case you’ve got family and friends there).

Electricity Providers by Zip Code

Looking for electricity providers by zip code?

I'll give you three ways to do it, and they're all free.

Nationwide markets:

For the Texas market:

Early Termination Fee Electricity – When Can I Switch Energy Supplier Without Penalty?

I spoke with Trent, from Real Simple Energy, about early termination fees.

Here's some great information about this:

  • Every provider has the right to charge whatever termination fee they want.
  • There are bigger termination fees the longer the contract.
  • Typical termination fees for 6 months are $50-150 and $150-250 for 12-month contracts. $20 for each remaining month on the contract is also a popular structure.
  • There is a law in Texas that states if you switch in the 2 weeks prior to your contract expiration date – no matter how long the contract – no early termination fee can be charged.
  • By law (this is nationwide), if you move and can show proof, you cannot be charged an early termination fee.
  • All of these laws will vary state by state according to the local public utility commission.

How Long Does it Take to Switch Electric Providers?

I spoke with Enri, from ComparePower, about how long it takes to switch electric providers.

He explains,

“The switch happens in the background and is not immediate. Typically it happens within 1-3 days of the date requested, depending on the utility and providers involved. There is some communication that happens between providers and the utility company that takes a few days.

During a switch request, the power remains on. Your new energy provider will notify the utility company as well as your current provider of the switch request. This is all done remotely, and there is no physical pipe changes, meter changes or home visits required.

Once the request to switch is accepted you then receive a final bill from your old provider and a new bill from your new provider on the next billing cycle. Your utility company will also send over a postcard confirming your request to switch providers.”

Switch Electric Companies, No Deposit

Are you looking to switch electric companies, but you're worried about having to pay a deposit?

Most, if not all, electric companies will run a credit check on you. They want to make sure you're capable of paying for the services you use.

And that credit check will determine if you're able to get a no-deposit electric plan (like a month to month electricity – no deposit), or if you'll have to pay a deposit when switching electric companies.

But you can find electricity companies with no deposit. You can search here to find no-deposit plans, only:

Note: ComparePower offers a unique solution. Simply enroll for the plan of your choice on ComparePower.com. If you are asked to pay a deposit, they will automatically check other providers for their deposit requirements without you having to spend hours looking for a no-deposit plan. This will save you a lot of time and hassle searching for options. Apply once and see all your options instantly.

Both of these sites will show you electricity providers in Texas – no deposit.

Denied an electric plan based on your credit (or other reason), or the company is making you pay a deposit? You should know your rights. According to the FTC,

“You have the right to know why the utility company denied you service, required you to pay a deposit, or asked you to provide a letter of guarantee (if you refused to accept those terms). Within 30 days of its decision, the company must send you notice stating the specific reasons or advising you of your right to get those reasons. You must submit your request in writing within 60 days of the company’s decision on your application.”

Can I Switch Electric Companies if I Owe Money?

No, you cannot switch electric companies if you owe money, because of what's known as a Switch Hold.

A switch hold is placed on a residence where someone has owes money on their electric bill (to a retail energy provider). This could be for any company

If your residence has a switch hold placed on it (even if you don't know, or you weren't the person who racked up the electric charges), then your new electric plan order can get cancelled, before it even gets installed.

Note: are you trying to move into a new residence, and found out there's a switch hold on that address? You can get this removed, and likely without having to pay the charge yourself. You'll need to show proof of new occupancy, or move-in proof, and you'll likely have to show some of this other information:

  • A copy of your new signed lease agreement (in the name of the person who is trying to get an electric plan)
  • A notarized Affidavit from your landlord (if renting)
  • A copy of your closing documents (if you just purchased the residence)
  • A New Occupied Statement

You'll want to google the name of the company you're trying to switch to (or get a new electric plan from), plus “get switch hold removed”, and you'll see their instructions to follow.

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.


Tuesday 15th of October 2019

My electricity bills were going out of control and I was looking for a cheaper alternative.

Dean Phillips

Friday 31st of May 2019

You made a good point when you said to gather your current electric plan information before you switch providers. My father has been having issues with his electricity so he wants to change providers. It might be a good idea for him to do some research on companies that can meet his needs.