What Buyers Need to Know About Electricity Plans When Purchasing a Houston Home
Buying a house in Houston comes with a to-do list long enough to fill a legal pad. Somewhere between the inspection report and the homeowner's insurance binder, electricity service tends to get tre…
What Buyers Need to Know About Electricity Plans When Purchasing a Houston Home
Buying a house in Houston comes with a to-do list long enough to fill a legal pad. Somewhere between the inspection report and the homeowner’s insurance binder, electricity service tends to get treated as an afterthought. That’s a mistake that can cost real money. Houston sits inside one of the only fully deregulated retail electricity markets in the United States, which means establishing service is nothing like calling the water department. There are dozens of competing plans, a state-run comparison tool with a significant built-in flaw most buyers never notice, and a summer climate that can turn a carelessly chosen variable-rate contract into a four-figure monthly bill.
The Closing-Day Trap Most Buyers Don’t See Coming
No one tells buyers at the closing table that electricity service doesn’t transfer from the seller automatically. The moment the prior owner cancels their account or stops paying, the address reverts to what the Public Utility Commission of Texas calls a Provider of Last Resort, or POLR. The POLR designation keeps the lights on, but the rate is not consumer-friendly — it runs variable and typically well above anything a competitive retail plan would offer. Many new homeowners discover they’ve been on it for weeks before noticing a line item on their first bill from an unfamiliar company name.
Select a retail electricity provider, pick a start date aligned with your possession date, and confirm the account is active before you walk through the door. Do this before or at closing. Everything below explains how to do it well.
How Houston’s Electricity Market Actually Works
CenterPoint Energy owns the physical infrastructure — poles, wires, transformers, meters — serving virtually all of Houston and the surrounding inner metro. That relationship is not optional. Every Houston electricity customer uses CenterPoint’s grid whether they know the company’s name or not, and CenterPoint’s charges appear on every bill regardless of which retail provider a customer has chosen.
The competitive piece of your bill is the supply side: the electricity commodity itself, customer service, and plan structure. Retail electricity providers compete for customers across Houston ZIP codes, with prices that fluctuate constantly. The Public Utility Commission of Texas runs PowerToChoose.org as a neutral comparison platform — not a private aggregator, not a lead-generation site. That distinction matters more than it might seem. Every plan listed must link to a legally standardized Electricity Facts Label with uniform disclosure requirements. Start here when you’re ready to compare plans, not with a third-party comparison site whose business model may involve steering you toward providers that pay referral fees.
Fixed-Rate, Variable-Rate, and Indexed Plans — and What Each One Actually Costs in a Houston Summer
A fixed-rate plan locks your energy charge — the supply cost per kilowatt-hour — for the contract term, typically 6, 12, or 24 months. The rate doesn’t move regardless of what’s happening in the wholesale electricity market. A variable-rate plan has no price lock; the provider adjusts your rate monthly based on their own cost calculations, which track wholesale market conditions with a lag and a markup.
An indexed plan is the most transparent version of variable pricing. Your rate is explicitly tied to a published market index — often a day-ahead or real-time ERCOT settlement price, sometimes with a fixed adder on top. In a normal month, the difference between plan types may be small. Houston doesn’t have normal months between May and October. During the summer of 2025, ERCOT experienced multiple scarcity events during extended heat dome conditions, and customers on indexed plans bore that exposure directly. Variable-rate customers faced a softer version of the same risk: their provider absorbed some volatility but passed cost increases forward in monthly adjustments.
For new homeowners who haven’t yet calibrated their budget to Houston summer electricity costs, a fixed-rate plan removes one significant variable from an already complicated first year. The protection matters most during the May–October cooling season, when a single week of grid stress can produce swings of several hundred dollars on a single monthly bill. That’s not theoretical. The 2023 summer saw multiple instances of this pattern, and 2024 brought similar volatility. I wouldn’t bet against 2025 being any different.
How to Use PowerToChoose Without Getting Misled by It
PowerToChoose is the right starting point, but its default display has a well-documented flaw. The platform sorts results by the lowest price at the 500 kilowatt-hour usage tier. Houston households don’t use 500 kilowatt-hours per month in July. Typical summer consumption runs between 1,500 and 2,000 kilowatt-hours per month, and homes with older insulation or pool equipment regularly blow past that.
Why does the 500 kWh display mislead? Many providers structure plans with a bill credit that kicks in above a specific threshold — often 1,000 or 2,000 kWh. At 500 kWh, that credit doesn’t apply, and the effective rate looks artificially high. Some providers exploit this deliberately, designing plans that look uncompetitive at 500 kWh but extremely cheap at exactly 1,000 or 2,000 kWh, then reverting to mediocre rates at 1,500 or 2,500 kWh. Sorting by the 500 kWh tier catches none of that misdirection. It’s a genuinely frustrating quirk in an otherwise useful tool.
When you enter your address on PowerToChoose, filter to display pricing at the 2,000 kWh tier and compare that column across plans. A typical search for a central Houston ZIP code — 77006 (Montrose), 77008 (Heights), 77005 (West U) — will return a substantial number of active fixed-rate plans on any given day. Narrow results further by filtering for fixed-rate plans with 12 or 24-month terms, sort by the 2,000 kWh price, then stop using PowerToChoose. Go directly to each provider’s website to pull the actual Electricity Facts Label.
Reading the Electricity Facts Label Before You Sign
The Electricity Facts Label is a PUCT-mandated disclosure document, not marketing material. Every retail electricity plan sold in Texas must have one, and the format is standardized enough that comparison is possible once you know what you’re looking at.
The EFL shows the average price per kilowatt-hour at three consumption levels: 500, 1,000, and 2,000 kWh per month. The 2,000 kWh row is the relevant figure for Houston summer budgeting. If a plan shows a conspicuously low price at 2,000 kWh but a dramatically higher price at 1,000 kWh, read the fine print for a bill credit structure that creates a narrow sweet spot the plan is engineered to exploit.
Some plans carry a minimum usage fee — a dollar charge that applies if your consumption falls below a stated threshold, typically 500 or 1,000 kWh. This is largely irrelevant during summer, but it can spike your effective rate in mild months when a well-insulated home runs little to no air conditioning. Consider what your rate becomes if you use 600 kWh in March under a plan with a $9.95 minimum usage fee at 1,000 kWh. The math gets ugly fast.
Early termination fees for residential plans in Texas vary widely — some plans have none, others run $150 to $200 or more. For a new homeowner who might sell, relocate, or encounter a change in circumstance within two years, this deserves real scrutiny. Most ETFs are waived if you’re moving to an address outside the provider’s service territory, but that exemption is address-specific and doesn’t always apply cleanly to buyers who expect to move within the Houston metro.
The standard auto-renewal clause reads something like: “If you do not contact us before your contract end date, your account will automatically renew on a month-to-month basis at the then-current variable rate.” Note the advance notice period required to avoid that outcome and set a calendar reminder well before it arrives. Twelve months goes faster than you think.
Texas requires disclosure of the fuel mix, so you can evaluate renewable content alongside cost. Some plans marketed as “green” are 100 percent renewable energy certificates; others carry far smaller renewable content and use the term loosely. Read the actual percentage.
What’s on Your Bill That No REP Controls
CenterPoint’s transmission and distribution charge — labeled “TDU Delivery Charges” on your bill — appears regardless of which retail provider you’ve chosen. It’s not negotiable and not competitive. CenterPoint’s residential delivery structure includes a fixed monthly customer charge plus a volumetric charge per kilowatt-hour; verify current figures against CenterPoint’s effective tariff filing before budgeting, since PUCT rate proceedings adjust them periodically.
Following Hurricane Beryl’s landfall in July 2024 — which knocked out power to a large portion of CenterPoint’s customer base during a dangerous heat event — the utility committed to significant infrastructure investments including accelerated undergrounding of circuits and grid hardening. Those capital expenditures feed into the rate base and are recovered through the delivery charge over time. The PUCT approved adjustments reflecting those costs. Houston customers are paying for Beryl’s aftermath whether they realize it or not, and will be for years.
When evaluating two competing supply plans, add the CenterPoint delivery charges to both before drawing conclusions. The delivery charge portion of a typical Houston electricity bill can easily run 40 percent or more of the total. Shopping on supply rate alone gives you an incomplete picture.
Does Your Home’s Age Change Which Plan Is Right?
Houston’s housing stock spans nearly a century of construction, and the age and condition of a home meaningfully affects summer electricity consumption — which in turn affects how much rate volatility can damage your budget. This kind of ongoing cost analysis is a recurring theme in our home and property coverage.
Pre-1980 inner-loop homes in Montrose, the Heights, Garden Oaks, and Meyerland were built before modern energy codes imposed insulation minimums and before double-pane windows became standard. Many have been renovated cosmetically without meaningful envelope upgrades and can consume 1,800-plus kilowatt-hours in July and August even with modern HVAC systems, because the thermal load is enormous. For buyers in this category, a fixed-rate plan isn’t just a conservative choice — it’s the obviously correct one. Rate volatility at those consumption levels can produce swings of several hundred dollars per month.
Flood-renovated homes present a distinct profile, particularly in Meyerland and parts of southwest Houston rebuilt following repeated flooding. Post-renovation rebuilds in these neighborhoods frequently include full insulation upgrades, new windows, and high-efficiency HVAC, which can reduce consumption dramatically relative to neighboring unrenovated homes. Request utility bill history from the seller to understand the actual consumption baseline. Don’t guess at this — the difference can be enormous.
Newer master-planned communities in Bridgeland (Cypress), Sienna (Missouri City), and Harvest Green (Richmond) are built to current Texas energy code requirements with meaningful insulation, radiant barriers, and better window performance. These homes typically consume 900 to 1,400 kilowatt-hours per month in summer — still substantial, but lower than older stock. Buyers in these communities have somewhat more flexibility, though “low-volatility summer” is not something anyone can reliably forecast in Houston, and the asymmetric downside risk of a scarcity event still favors fixed pricing.
Townhome corridors in Midtown, EaDo, and Upper Kirby benefit from reduced exterior surface area thanks to shared walls, which lowers cooling loads compared to detached homes of similar square footage. That said, many of these corridors have poorly sealed party walls that affect energy performance unpredictably. Again: request utility bill history from the seller.
How to Switch Electricity Providers as a New Houston Buyer
The process is mechanical once you know the sequence. Most retail providers can activate service within a few business days for an address that already has an active CenterPoint meter. Select your provider, choose your plan, set the start date for your possession date or one day prior if the title company can confirm the meter is active. Same-day or next-business-day activation is often available for a small fee. Pay it without guilt if you’re in a compressed closing timeline.
Your title company is accustomed to handling utility transfer questions. Ask them to confirm the current provider on the property and whether the seller’s account cancels on closing day or the day before. If it cancels the day before, the address automatically rolls to POLR for any gap — even 24 hours counts. Having your new account start date aligned to the possession date eliminates that gap.
New-construction addresses in Katy, Fulshear, Cypress, and Conroe-fringe developments present a specific complication. The CenterPoint meter may not yet be in the system as an enrollable address, particularly for homes that recently received their certificate of occupancy. Your builder should have a utility coordinator, and your retail provider will need the specific meter number from CenterPoint to complete enrollment. Start this process as soon as your certificate of occupancy date is confirmed. The further out from the loop you are, the more likely you’ll hit this snag.
Before you sign anything at closing, call or log into your new provider’s account portal to confirm enrollment has been processed and a start date is confirmed. Don’t just verify an application was submitted — verify it was accepted. Providers occasionally encounter database mismatches on newly transferred properties. A 10-minute call the morning of closing eliminates the possibility of arriving to a dark house.
If your closing slips by a week or more, call your retail provider to adjust the start date. Most accommodate short delays without a fee. If the delay extends beyond what the provider will hold a rate quote for, you may need to re-enroll — but the rate should be similar if market conditions haven’t shifted materially.
Timing Your Plan Decision
ERCOT wholesale prices are seasonal. During the shoulder months — March through April and October through November — cooling demand is low, grid reserves are ample, and wholesale prices are typically calm. Retail providers set their fixed-rate pricing partly on forward market prices and partly on their cost of customer acquisition and hedging. When wholesale markets are relaxed, competitive fixed-rate offers tend to come in lower.
This is real and worth knowing, but don’t let it drive the decision. A buyer who delays selecting a plan to “wait for better pricing” while sitting on POLR service is paying an above-market variable rate in the interim, erasing any potential savings from timing. If you’re closing in spring and comparing a well-priced fixed-rate plan against a slightly cheaper variable, the fixed rate is probably worth the premium given what summer holds. If you’re closing in summer and the fixed-rate menu looks expensive — shop PowerToChoose thoroughly at the 2,000 kWh tier and lock in the best fixed rate you can find. That’s still the right answer.
EFL Checklist: Six Things to Verify Before Signing Any Houston Electricity Contract
Keep this list open when you’re reviewing your shortlist on PowerToChoose.
1. The 2,000 kWh price tier. This is your actual cost during Houston summer months. Write it down for every plan you’re seriously considering.
2. Minimum usage fee. Find the line that reads something like “a $X.XX charge applies if monthly usage is below Y kWh.” Calculate your effective rate in a light-usage spring month. If that number is significantly higher than the 2,000 kWh rate, decide whether you’re comfortable with that swing.
3. Early termination fee. Get the exact dollar figure or per-month formula and weigh it against your realistic timeline. If there’s any possibility you’ll sell within 12 months, a substantial ETF on a 24-month contract is a real liability.
4. Contract end date. Calculate it from the start date and confirm it matches what PowerToChoose displayed. Some plans list themselves as “12-month” but include a notice period that effectively extends your obligation.
5. Auto-renewal terms. Find the exact language describing what happens at expiration. Note the advance notice period required to avoid auto-renewal and set a calendar reminder.
6. Renewable content percentage. The actual number, not the marketing language.
Getting Houston’s electricity market right as a new homeowner takes a couple of hours — reading the structure, comparing plans on PowerToChoose, pulling three or four EFLs. The consequences of skipping it show up in June, when an air conditioner running against 95-degree heat turns a carelessly chosen variable plan into a very expensive lesson.
