In deregulated electricity markets like Texas, you have the power to choose your own electricity provider. But what happens if you never make that choice? The answer usually involves higher rates, fewer plan options, and less control over your energy costs. Here is how it works.
The Provider of Last Resort (POLR)
In Texas, if you move into a new home or your current provider drops you for any reason and you do not select a new one, you are automatically placed with a Provider of Last Resort, or POLR. This is a state-designated provider assigned to make sure your electricity stays on even if you have not actively chosen a plan.
The POLR system exists as a safety net. It prevents people from losing power simply because they forgot to set up service or did not realize they needed to choose a provider. But that safety net comes at a cost.
Why POLR Rates Are Usually Higher
POLR rates are not competitive. They are designed as a temporary fallback, not a long-term solution. Because these rates are set to cover the provider's risk of serving customers who may have credit issues or who did not actively shop, they tend to be significantly higher than what you would find by comparing plans on your own.
In some cases, POLR rates can be two to three times the going market rate. That adds up fast, especially during high-usage months like summer. The longer you stay on a POLR plan, the more you pay compared to what you could be spending with a plan you actually chose.
How You End Up on POLR Without Realizing It
There are a few common situations that lead people to POLR service without their knowledge. The most common is moving to a new address and not setting up electricity ahead of time. When you arrive and the lights are on, it is easy to assume everything is handled. In reality, you may already be accruing charges at a POLR rate.
Another scenario is when your provider exits the market or your contract expires and you do not renew. In both cases, you can be rolled onto a default rate or transferred to the POLR provider. Some people do not notice the change until they see an unusually high bill.
What You Should Do Instead
The simplest way to avoid POLR rates is to actively choose your provider before you need service. If you are moving, set up your electricity plan at least a few days in advance. If your contract is ending, start shopping for a new plan before the expiration date. In Texas, comparing providers takes just a few minutes and can save you a meaningful amount on every bill.
If you are already on a POLR plan, the good news is you can switch at any time without a penalty. There is no contract locking you in. Start comparing rates, pick a plan that fits your needs, and enroll. Your new provider will handle the switch, and you will start seeing lower rates on your next billing cycle.
The Bottom Line
Not choosing a provider is itself a choice, and it is usually the most expensive one. In a deregulated market, you have options. Taking a few minutes to compare plans and pick a provider can save you hundreds of dollars over the course of a year. Do not leave that decision to default.
