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Blog Aug 15, 2018

Switching Electric Companies

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Next to the walls, ceilings, and floors, electricity might be the most important thing in your home. And next to your mortgage or rent, it’s also usually one of the most expensive bills that you pay as well. Though it may seem as though this is a fixed expense that must be addressed each month, there does exist an alternative option for those living in a deregulated state. In the event of this, you have the option to switch from your plan and provider to a less-expensive service company. The bulk of the work required of switching electric companies lies in understanding what the process entails and though it may seem to be complicated, the following is meant to outline the details of switching and make it easier.

Deregulated Electricity and how it affected Switching

Power used to be provided by local and regional monopolies that had absolute control over both the generation of energy and the channels used to distribute it. Today, there do exist some states that have deregulated energy, separating the energy production from the distribution of it. This is similar to the what happened for telephone companies as originally there was only one major company but over time the landscape has expanded and now there are various phone carriers to choose from.

Although the average American consumes around 908 kilowatt-hours (kWh) of energy per month, residents in some states use much more. Louisiana leads the country in energy consumption with an average 1,240 kWh of energy use each month as of 2018. Tennessee, Alabama, and Mississippi are the 3 states with the next highest energy consumption levels and consume an average 1,218 kWh each month. Behind those states was Texas with the 5th highest average monthly energy consumption rate in the country (1,156 kWh). A notable similarity for these five states is the fact that they each have a place within warmer regions of the country, a contributing factor to the amount of electricity their residents use and the subsequent prices.

For a number of reasons, the governing bodies of several states decided to pass legislation that would deregulate the electricity market, granting consumers and businesses the ability to select a service company from the many that provide energy to their area. This was the case for Texas, as the legislature passed a deregulation law (Senate Bill 7, also known as SB7) in 1999. While it did allow the majority of the state to choose which electric provider they wanted to use, there are still some parts of the area that do not have that ability.


Given the ability to switch from an energy provider, you may be wondering what warrants a change, especially in the event that you are currently satisfied with your service. There are several answers to that question.

Switching Utilities When Moving

For many who end up switching energy providers, a move from one area to another may be one factor prompting the change. Especially when relocating to a new state, finding a whole new provider is necessary and this is best done before actually picking up and heading out to your new home. The reason for this is that it enables families to have heat and electricity ready for them from the second they get into their new place and start the long process of unpacking. Moving from one place to another also presents a homebuyer with an opportunity to find a new provider that may offer better rates, thus enabling savings each month.

Service Needs

For some people, the service provided by their energy company is a particularly important factor to consider when trying to determine whether or not to remain with the company. Potential switchers will have to think about this as they attempt to anticipate any questions they may have regarding available rates or the details of plans available elsewhere. For information about other service providers in the area, there are a number of third party platforms that include details from past or current customers, rating the quality of the service and providing other details meant to help consumers make informed decisions. Especially for those who may be having difficulty with their service, it may be helpful to look into the experiences of others to determine how to proceed from there.

Competitive Pricing

In some ways, electric providers are like grocery stores, restaurants, and other businesses as consumers are able to develop a preference for one or another based on the quality of the product. Electric providers are different from grocery stores, restaurants, and other business in one very important way, however. While one grocery store or restaurant may charge more for their products, the differences in quality allow them to do this. Most consumers like quality products and services, and they’re usually willing to pay more for better quality. But when it comes to your electricity, service is the same regardless of the provider. Consumers don’t receive a “better quality” of service by paying more. All of the power is reliable and safe. And, since the service is the same, it doesn’t make sense to pay more for it. That’s money you could keep in your pocket as some consumers are able to save up to 20% by switching to another electric provider. If your rates seem rather high or you happen to spot a service company with lower rates, you may want to consider a switch.

The beauty of having deregulated energy is that competition drives rival electric providers to offer the best prices and customer service – or lose customers.

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Find Providers Near You

The switching process is relatively simple. If you sign up online, the first step is to enter your zip code. This information is used to determine what providers are available in your area. After you enter your zip code, you’ll usually see a variety of plans to choose from. There are even some sites meant to act as a resource for states and include all the details for certain providers. Each plan includes information that can help you make the best decision about your energy. For example, one plan may cost 11.7 cents per kWh, and it is a 12-month fixed plan, which means the rate is locked in for 12 months. Another plan may cost 12.1 cents per kWh, and it’s a month-by-month plan meaning the rate will change over time.

Understand Plan Details

Some plans require customers to pay a minimum upfront payment while others do not. Based on the provider and the details of service, consumers may be on the hook for an early termination fee should they want to switch providers before their contract is up. Just as with a deposit, not all energy companies will charge individuals for ending service early. Another requirement from some plans is a credit check. For those with poor credit history, this can present a challenge. Luckily, not all plans are like this as those who opt for prepaid electricity can skip this step all together. This particular route does come with its own set of unique details as it requires payment in advance of service. This plan, and those that are similar to it, help individuals to better manage their budget and avoid unexpected surprises at the end of the month. Also, some prepaid services offer steep savings, up to 20% off, if you enroll in the auto-pay program. In addition, some providers offer financial and energy assistance and low-income customer discounts.

Sign Up

After you decide on a provider and choose a plan, you can sign up on the provider’s website or call them. If you sign up on the website, you’ll review information about the plan you selected and sign the contract electronically. Before doing that, it is beneficial to call ahead to the provider as they will send you information about your desired plan. This can give you the opportunity to sit down and give it a hard look over to ensure you understand all that it encompasses. When you feel you’re ready, you can sign and return the document and receive power shortly thereafter.

The Power Switching Period

Usually, there’s a period in which you can change your mind and cancel your contract. That is typically a three-day window. After the passage of seven days without cancellation, your service is automatically switched to the new provider. During this time, you will not experience a loss of service and you won’t notice any difference on your end. In the next billing cycle, you will receive the first bill from your new electric provider.

Before you switch however, you will need to check with your current electric provider if you have a contract with them to be sure that there are no early termination fees that you will have to pay. In the event of a move, make sure that they have your updated address so that they can pass along any final billing statements or other important documents that you may require.

Making the Electric Supplier Switch

For someone actively seeking a new electric provider or even an individual who may just be casually considering other service options, switching electric providers may be something to contemplate, bringing with it a number of benefits. In addition to saving money each month on energy, changing service companies may also grant individuals access to better service. At the very least, it’s definitely worth your time to call or go online to discover your options. You have nothing to lose, but what you save could be substantial.

For other tips about switching electric companies or to find a provider that gives consumers energy for low rates, visit paylesspower.com. Offering cheap energy plans to suit both personal and business needs, Payless Power is a company committed to providing people not only with some of the best cheap electricity rates in Texas, but also with helpful customer service. Visit the website to learn more about how to save electricity at home, or connect with the online community on Facebook, Twitter, and Instagram.

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I was worried about getting electricity for my home through a prepaid company. I was calling around to see different rates then going through all the hassle of credit checks while dropping points each…

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Published on July 21, 2017

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I have been with this company for several years and have been very happy since. Even when I moved, they made my usually stressful situation very easy and carefree. I recommend them to everyone that I…

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I have enjoyed the service for 2 years now. In the beginning this service was planned to be temporary but with the service being so effective for me i decided to keep it for the long haul. I’m a happy customer.

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