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How do I shop for electricity?
Direct Energy, December 6, 2023
4 minute read
How do I shop for electricity?
Direct Energy, December 6, 2023
4 minute read
When finding a power supplier for your home, shopping around is often the best way to find the best price and the best value. Not everyone has this freedom, however, as deregulation is not the case in all 50 states. Thanks to deregulation, many people can choose where to shop for their electricity plan (and their natural gas plan as well). That means you, the customer, are in control.
In Texas, where much of the energy market is deregulated, there is a separation of responsibilities between the retail provider and the utility when it comes to the billing process. This is in contrast to other deregulated states where the utility typically handles both distribution and billing.
Since 2002, much of the Texas electricity market has had the ability to choose a retail electricity provider (REP), such as Direct Energy. In these areas of Texas, REPs aren't the only companies involved in providing electricity. Transmission and Distribution Service Providers (TDSPs) are among the entities that also play an important role.
The utility company, which owns and operates the distribution infrastructure, is responsible for both delivering electricity and billing consumers.
Key difference:
If you are a Direct Energy customer and you live outside of Texas, you will still receive your bill directly from your local utility. You will usually see Direct Energy as a line item on your bill under "supply" or "generation services."
If you're already under contract with an electricity supplier, you should review your contract to determine what penalty, if any, exists if you leave that company before your contract expires. In some cases, you could be assessed an expensive early termination fee that nullifies the benefits offered by a new provider. This fee can depend on the length of the contract and how recently you started services.
Begin by visiting your state's utility commision website, which will feature a complete listing of your options. This process is actually easier than it sounds, as these websites typically present a side-by-side comparison that is easy to follow and understand. Depending on the state you live in, you may have to enter your city or zip code to narrow the list of options in your region.
In any case, once you have your list, you can compare prices and plans. Here are three key considerations when shopping for electricity:
1. Rate
This is the unit price for the cost of electricity, which is priced by the kilowatt hour (kWh). To add context, the average U.S. household uses 899 kWh per month, though it's important to remember that many factors can increase or decrease your electricity usage. These may include season, the number of family members living in the home, and how many energy-efficient appliances you own.
2. Rate type
Just like price, the rate type has a significant impact on how much you will end up paying for electricity. Many companies offer fixed-rate plans, but some offer variable-rate plans. They are very different, and it's crucial to understand why.
3. Plan features
Price is an important component of any new energy plan, but there are other things you should consider as well. Contract length, bonuses, reward offerings, and eco-friendly practices are all applicable selling features, too. Each of these qualities will vary from plan to plan (and company to company), and it's up to you to determine the right energy plan for your home, family, and budget.
4. Company type
Before you choose, it's important to understand that you could potentially be doing business with up to two entities to get your electricity.
The competitive energy market for electricity and natural gas allows customers to shop around for rates and plans so they can find the one that's perfect for their home and lifestyle. You can sign up for electricity or natural gas in just a few steps:
Choose a retail electricity provider (REP):
Select a plan:
Provide information:
Review and agree to terms:
Create an account with your utility:
Then shop for your perfect plan!
Explore our other categories by selecting one from the dropdown menu.
Shop our plans and find the perfect electricity or natural gas plan for your home. Making the switch is easy:
We offer a wide range of plans and even help you customize them to fit your needs! Shop our plans to find your best fit today.
Need help placing an order?
Texas customers: Call us at 1-855-461-1926
Northeast and Midwest customers: Contact us
Questions about your current service?
Texas customers: Call us at 1-888-305-3828
Northeast and Midwest customers: Contact us