Texas Month-to-Month Power Plans: Compare True Cost

The rate on a Texas electricity ad is rarely the number that shows up on your bill. Month-to-month plans make that gap easier to miss, because the price itself can move after you enroll. If you want a fair comparison, you have to look past the teaser cents-per-kilowatt-hour and rebuild the bill the way regulators already require retailers to disclose it.

That work is doable. Texas publishes a standardized ¹ for every residential offer, and the state's shopping site, ², is designed for apples-to-apples plan comparisons. This guide walks through what month-to-month really means under Texas rules, which charges you can shop and which you cannot, and how to turn an EFL into an estimated monthly cost that matches how you actually use power.

What "month-to-month" means in deregulated Texas

In competitive areas of Texas, you pick a retail electric provider (REP) for the energy on your bill, while a transmission and distribution utility (TDU) still owns the poles and wires. ³, for example, describes itself as a regulated poles-and-wires company that delivers electricity on behalf of competing retailers rather than selling the power itself. ⁴ likewise directs customers starting new electric service to ². The ⁵ tells residents in the ERCOT region who are not served by a co-op or municipal utility that they can choose their electric provider through Power to Choose.

Under PUC customer-protection rules, a variable price product for residential customers is defined as a month-to-month contract, and the price may change according to a method the REP sets—including products that can rise by no more than a defined percentage tied to the prior month. A fixed rate product must run at least three months and keep the disclosed price the same for each billing period of the term, except for allowed pass-throughs such as actual changes in TDU charges. Those definitions sit in ⁶.

Power to Choose's own ⁷ draws the shopping distinction the same way: fixed rates are for terms longer than one month, while a variable rate's cost can vary from month to month. The guide also flags prepaid plans and time-of-use pricing as separate filters when you narrow results.

Indexed products are a third category. The same PUC rule defines a wholesale indexed product as a retail offer that tracks a published wholesale index. That structure is legal when disclosed, but it is not the same thing as a fixed contract. Winter Storm Uri made the difference visceral: ⁸ reported that Griddy passed wholesale prices through to customers for a $10 monthly fee, unlike fixed-rate plans with a consistent rate regardless of market conditions, and that wholesale prices jumped from an average of about $35 per megawatt-hour to $9,000 during the storm's peak.

Month-to-month is therefore not a synonym for "cheap and flexible." It is a contract form that trades price certainty for exit flexibility—and, depending on the product formula, can put wholesale volatility closer to your kitchen table.

The two halves of every Texas bill

Your bill has a shoppable half and a non-shoppable half.

The shoppable half is the REP energy charge: the cents per kilowatt-hour (kWh) and any REP base fees or credits in the plan. The non-shoppable half is TDU delivery—the regulated charge for moving power over the local wires. Delivery charges are set for your TDU territory and show up on every plan serving that address. Switching retailers does not switch your wires company.

That split is why a headline energy rate can look competitive and still produce a middling bill. Delivery is baked into the average prices on the EFL, which is why the PUC designed the label as a nutrition-style disclosure for price and contract terms.

Scale matters for context. According to the U.S. Energy Information Administration's 2024 residential averages, Texas households used about 1,096 kWh per month on average, paid 14.94 cents per kWh, and saw an average monthly bill of $163.72. Those figures come from EIA's ⁹ release—see the ¹⁰. More recent statewide residential prices move with the seasons: EIA's ¹¹ shows Texas residential customers paying 16.99 cents per kWh in April 2026, up from 15.52 cents in April 2025.

None of those averages tell you whether your month-to-month offer is a good deal. They do tell you that a plan comparison anchored only to an 8-cent teaser rate is living in a different universe from the statewide bill.

Behind the retail market sits the grid operator. ¹² manages the flow of electric power to more than 27 million Texas customers—about 90 percent of the state's electric load—and schedules power across tens of thousands of miles of transmission lines. Retail prices and wholesale conditions are linked, especially for variable and indexed products, even though your day-to-day relationship is with a REP and a TDU.

How to calculate true cost from the Electricity Facts Label

The EFL is the document that turns marketing into math. The PUC describes it as similar to a nutrition label and says each REP must provide one so customers can compare offers in a standardized format. ¹³ makes the same practical point: the EFL shows average price per kWh at 500, 1,000, and 2,000 kWh, plus fees, contract length, and renewable content, and it is the most reliable comparison tool because it accounts for more than the headline rate.

PUC formatting rules require those three usage columns on the residential EFL. That structure exists because plans with bill credits, minimum-usage fees, or tiered charges can look cheap at one usage level and expensive at another. ¹⁴ reported that after complaints about deceptive listings, Power to Choose began filtering out some credit-driven prices that made offers appear artificially cheap—including deals advertised as low as one cent per kWh—and that regulators emphasized posting prices for 500, 1,000, and 2,000 kWh up front because the average Texan uses roughly 1,000 to 1,200 kWh a month.

A simple true-cost worksheet

1. Pull your real usage. Add 12 months of kWh from past bills, then divide by 12. If you only have a few months, note the season. Power to Choose's ⁷ reminds shoppers that usage follows seasonal patterns, with higher consumption in months like August and February.
2. Match the nearest EFL column. If you average 900 kWh, the 1,000 kWh column is usually the better proxy than 500. If you average 1,700 kWh, weight toward 2,000.
3. Convert average price to dollars. Average price (¢/kWh) × monthly kWh ÷ 100 = estimated monthly cost before taxes and one-time fees.
4. Stress-test low and high months. Recalculate at 500 and 2,000 kWh even if you "usually" land near 1,000. Month-to-month products and credit-heavy plans often diverge most at the extremes.
5. Read the fine print the EFL points to. For variable products, PUC rules require the EFL to explain how to obtain current and, if applicable, historical price information. If a retailer will not show you how the rate changed over the past year, treat that as a cost risk, not a paperwork annoyance.

Power to Choose's ¹⁵ checklist is still the right script before you enroll: What do I pay per kWh at 1,000 kWh average usage? Does that include energy, transmission and distribution charges, and recurring fees? Is the offer fixed, variable, or indexed—and if variable or indexed, how can it change? Is there a contract length, deposit, early termination penalty, and what happens when the term expires?

That last question matters even if you think you want month-to-month. Shoppers who stop paying attention at renewal can end up on a different product than the fixed plan they originally compared—sometimes a variable month-to-month rate with a new price path.

When month-to-month wins—and when it loses

Month-to-month can be the rational choice in a short list of situations:

• You may move soon and cannot transfer the plan cleanly. ¹³ notes that early termination fees can range from about $50 to $200 or more, and that shorter or month-to-month terms can fit if you are unsure how long you will stay. Compare the expected ETF against the premium you would pay for flexibility.
• You are bridging a gap. New move-in, landlord timing, or a short commercial lease can make a 12-month lock feel like over-commitment.
• You will actively monitor prices. Variable products reward attention. They punish set-and-forget billing.
• You need prepaid or no-deposit access. Some flexible products are structured as prepaid rather than traditional post-pay variable. ¹⁶ lists pay-as-you-go / prepaid plans among the common types shoppers compare in Texas, Ohio, and Maryland.

Month-to-month usually loses when:

• Your usage is high and summer peaks are non-negotiable. Texas cooling load is not a rounding error. Locking a fixed rate before peak season can be insurance, not overcaution.
• You will not check the rate every month. A variable plan that quietly resets higher is often more expensive than a slightly higher fixed offer you actually keep.
• The "low" rate depends on hitting a usage band. Minimum-usage fees and bill credits can punish apartments, vacation travel, or efficient homes—the opposite of what a thrifty household expects.
• The product is wholesale-indexed and you need bill stability. Uri-era pass-through bills were an extreme case, but they illustrate the structural risk of tying a household budget to real-time wholesale conditions.

For small businesses, the same logic applies with less margin for surprise. A cafe with summer HVAC load or a shop with unpredictable hours should model the EFL at multiple volumes and ask whether a variable reset could hit during the busiest revenue month. Flexibility is valuable; surprise wholesale correlation is not.

Seasonal timing and market risk

Retail offers are not priced in a vacuum. ERCOT balances a large, largely isolated Texas grid, and wholesale conditions feed into what retailers are willing to lock for 12 or 24 months versus what they charge month to month.

A quick dollar example using EIA's 2024 Texas average usage of 1,096 kWh shows why small rate gaps compound. At 14.94 ¢/kWh, the implied monthly energy+delivery blend is about $164—the same neighborhood as EIA's published average bill. Raise the effective average price by 2 ¢/kWh on that usage and you add roughly $22 a month, or more than $260 a year, before taxes. Month-to-month products can produce that kind of gap after a single reset; fixed products cannot, except for allowed TDU and similar pass-through changes under the PUC's fixed-rate definition.

Practical timing tips that show up repeatedly in consumer guidance:

• Do not shop blind in your highest-usage month if you can help it. If your fixed contract ends in late summer, start comparing earlier so you are not forced into whatever is on the shelf when your AC is running hardest.
• Use seasonal history, not a single mild month. A spring bill is a poor forecast for August. ¹³ notes that in warmer climates, summer use can run two or three times winter use.
• Treat contract-expiration notices as action items. Power to Choose's question list specifically asks what happens when your contract expires. If you do not choose a new product, you can end up on a different price structure than the one you shopped—often a month-to-month variable rate with less predictability.

Statewide average prices also drift. EIA's April 2026 residential figure for Texas (16.99 ¢/kWh) sitting above April 2025 (15.52 ¢/kWh) is a reminder that "the market" moves even when your personal plan does not. A fixed contract is a hedge against that drift. A month-to-month plan is a decision to ride it.

Outside Texas: same math, different rules

Choice states such as Ohio and Maryland also let many customers shop suppliers while the local utility delivers power, but the disclosure documents and default products are not identical to Texas EFLs. ¹⁶ says it currently operates in Texas, Ohio, and Maryland and compares fixed-rate, variable-rate, prepaid, time-of-use-style, usage-credit, and renewable plans from licensed suppliers. If you are shopping outside Texas, still insist on an all-in comparison at your real kWh—and do not assume a Texas-style Power to Choose portal exists in the same form. Regulated municipal and cooperative territories, including parts of Texas, remain outside retail choice; Power to Choose will tell you when a ZIP is not open to competition.

Shop Power to Choose like a skeptic

² is the official, unbiased electric choice website of the Public Utility Commission of Texas. Certified providers can list offers there at no charge, and the homepage is explicit that the site exists so you can compare plans and choose what fits.

Use the filters. The ⁷ walks through narrowing by estimated monthly usage, price range, contract length, minimum usage fees/credits and tiered rates, fixed versus variable, prepaid, time-of-use, renewable percentage, and complaint-based customer satisfaction indicators. Then it insists on the step shoppers skip: open the fact sheet and read it.

A skeptical shopping pass looks like this:

1. Enter your ZIP and confirm the correct TDU if the site asks.
2. Filter to the contract length you actually want—do not mix 36-month fixed rows with month-to-month rows and sort only by the lowest teaser.
3. Toggle off plans with minimum-usage fees or credits if your usage is low or irregular.
4. Sort or scan by the EFL average price at your usage column, not the prettiest energy-only number in an ad.
5. Open two or three finalists and compare termination fees, deposit rules, and variable-price history links side by side.
6. Enroll through a channel you trust. Comparison tools such as ¹⁶ can show licensed suppliers in Texas (and other choice states), but the EFL and terms still govern what you pay.

Regulators have been frank that the market needs that skepticism. Tribune reporting on PUC efforts to rein in deceptive Power to Choose listings is older, but the underlying pattern has not vanished: some offers are engineered to look cheap in a sortable table. Your job is to rebuild the bill.

Worked example: comparing two offers at your usage

Suppose your bills average 1,100 kWh—close to the EIA Texas residential average. Plan A is a 12-month fixed product whose EFL shows 15.2 ¢/kWh at 1,000 kWh and 14.8 ¢/kWh at 2,000 kWh. Plan B is a month-to-month variable product advertised at 13.9 ¢/kWh this month, with an EFL average of 16.5 ¢/kWh at 1,000 kWh after fees are included, and a note that the energy price can change monthly at the REP's discretion.

For Plan A, a rough monthly estimate at 1,100 kWh is about 15.1 ¢ × 1,100 ÷ 100 ≈ $166. For Plan B, using the EFL average rather than the ad, 16.5 ¢ × 1,100 ÷ 100 ≈ $182. The variable plan's teaser looked cheaper; the standardized average was not. If Plan B's energy charge later rises by 3 ¢/kWh while delivery stays put, the gap widens further—exactly the risk Uri-era wholesale pass-through products demonstrated in extreme form, and the everyday risk ordinary variable products carry in milder form.

Now flip the scenario: you are subletting for four months and a fixed plan carries a $200 early termination fee. Paying a higher month-to-month average for a short stay can beat paying an ETF you will almost certainly trigger. True cost includes the fee you are likely to incur, not only the rate you hope to keep.

A decision framework you can finish in one evening

Step 1 — Map your usage. Twelve-month average, summer peak month, and winter peak month. Write all three numbers down.

Step 2 — Decide your flexibility value. If an ETF of $150 would ruin the savings of a cheap 12-month plan because you might move in six months, month-to-month or a short fixed term is in play. If you are staying put, price certainty usually pays.

Step 3 — Compare only EFL averages at your usage. Ignore ads that refuse to show 500 / 1,000 / 2,000 kWh side by side.

Step 4 — Price the risk, not just the rate. For any variable or indexed finalist, check historical price disclosures and ask what happened to the rate over the last 12 months. If the answer is vague, walk.

Step 5 — Recheck delivery reality. Your TDU charges will appear whether you pick the flashiest REP or the boring one. Shopping cannot remove delivery; it can only change the energy layer and plan fees.

Step 6 — Calendar the end date. Put the contract expiration or monthly rate-check reminder on a calendar with enough lead time to shop again. The expensive plan is often the one you stopped watching.

True cost is not a mystery number retailers hide for sport. In Texas it is mostly arithmetic: your kWh, the EFL average at that volume, the fees the label already discloses, and—for month-to-month—the probability that next month's rate is not this month's rate. Do that math once with your real usage, and the plan that looked cheapest on a banner usually stops winning.

If you live outside competitive ERCOT territory—served by a municipal utility or cooperative—you will not shop REPs the same way, and Power to Choose will say so when a ZIP is not open to competition. For everyone else, the winning move is the same: stop comparing slogans, start comparing EFLs, and treat month-to-month as a deliberate risk choice rather than a default.