Business Electricity Plans in Texas: How to Switch and Save

Business electricity plans in Texas come in six structures, each priced and contracted differently. Most owners shop the headline cents-per-kWh number on a fixed-rate plan and do not realize the indexed, time-of-use, demand-response, or 100% renewable structures might fit their business better. This guide covers the plan types, the switch process, and the save points for a small or mid-sized Texas business shopping business electricity plans Texas owners can sign in deregulated ERCOT territory.

For the broader rate stack and how rates are built before plan structure layers on top, see the pillar guide on commercial electricity rates in Texas. For a snapshot of which retail electric providers offer which plans, see the REP comparison pillar.

The Six Business Electricity Plans Texas REPs Sell

Every Retail Electric Provider (REP) in deregulated Texas must produce an Electricity Facts Label (EFL) for every plan, per PUCT Substantive Rule 25.475. The EFL is a one-page disclosure that shows the average price per kWh at three reference usage levels (typically 500, 1,000, and 2,000 kWh for residential; 5,000 / 10,000 / 25,000 kWh for commercial), the contract term, the early termination fee, the base charge, and the renewable content percentage. Every plan type below fits one of six structures.

1. Fixed-Rate Business Electricity Plans

A locked cents-per-kWh price for the contract term. The most common business electricity plans Texas REPs sell, and the easiest to budget against. Term-rate tradeoffs from May 2026 reference quotes:

Term	Sample energy rate (cents/kWh)	Best for
6-12 months	6.97 - 7.50	Bridge during shopping
15 months	6.66 - 6.97 (lowest)	Aggressive shopper accepting August renewal
24 months	7.00 - 7.20	Steady-load businesses
36 months	7.10 - 7.30	Long-term certainty
48-60 months	7.30 - 7.50	Hedge against expected market rises

Example REPs offering fixed-rate commercial plans in May 2026: Gexa Energy, APG&E, ENGIE Resources, TXU Energy, Reliant Energy, Direct Energy, Champion Energy. Lower rates trend toward odd-month terms (15, 18) because REPs match those terms to their own hedge maturities.

2. Variable-Rate Business Electricity Plans

Tracks the wholesale market month to month. Useful as a 30- to 90-day bridge between fixed contracts; not a primary structure. The default rollover after a fixed contract expires is almost always a variable rate at the REP's discretion, often 15-25 cents per kWh. That is roughly 2-3x competitive fixed rates and is the single biggest avoidable cost in the Texas market.

Variable rates make sense only when the business expects to leave a facility within 90 days, when wholesale is at a multi-year low and the buyer wants to ride it for 30 days while shopping a longer term, or when the business has alternative supply (solar, batteries) covering the high-rate exposure window.

3. Indexed and Heat-Rate Business Electricity Plans

Three sub-shapes that aggregator sites blur together but settle very differently:

• Heat-rate plans price energy as (natural gas $/MMBtu) x heat rate. A typical 7.5 heat rate at $4 per MMBtu gas equals 3.0 cents per kWh. Used for industrial customers tied to gas. Exposure: a $2 spike in gas adds 1.5 cents per kWh.
• Block-and-index mixes a fixed block (e.g., first 80,000 kWh per month at 4.5 cents) with an indexed block on volumes above that (settled to ERCOT day-ahead hub plus markup). Settles month by month.
• Layered hedge blends fixed energy, options, and spot in tranches the REP procures over time. Customer pays a roughly 0.2 cents per kWh hedge premium for smoothing. Layered structures averaged 12% savings versus pure spot during the 2025 ERCOT heatwave.

REPs with mature indexed offerings: ENGIE Resources, Constellation Energy, Shell Energy, Calpine Energy Solutions, Direct Energy enterprise. Best fit: businesses above 250,000 kWh per year that can absorb monthly settlement variance.

4. Time-of-Use (TOU) Business Electricity Plans

Different rates by peak (often 2-7 p.m. summer weekdays) and off-peak (nights, weekends, mild seasons). The typical TOU spread is 1.5x to 3x between off-peak and peak. Best fit for businesses that can shift load: cold storage running compressors at night, manufacturing with second/third shifts, restaurants prepping in the morning, retail with limited evening hours.

Example REPs offering business TOU: Gexa Energy, TXU Energy, Reliant Energy, Champion Energy. Typical contract length 12 to 24 months. The savings range, when TOU is well-matched to the load, runs 8 to 18% versus a flat fixed-rate plan on the same usage.

5. Demand-Response Business Electricity Plans

The business agrees to curtail peak demand on REP or ERCOT signal in exchange for credits or a lower headline rate. Triggers are short (usually 30 to 60 minutes) and infrequent (5 to 15 events per year), but they always occur during the highest-priced wholesale hours.

Pricing: $50 to $100 per kW per year of committed curtailment, paid as bill credits or as a lower contract rate. A 200 kW commercial customer committing 50 kW of curtailment typically receives $2,500 to $5,000 per year. Penalties for non-performance are equally direct, usually pricing the missed reduction at the day-ahead market price for the curtailed hour.

Best fit: facilities with discretionary load (HVAC pre-cooling, walk-ins, EV charging, manufacturing process tweaks) and a willingness to install monitoring. Pulse Power, ENGIE Resources, and Constellation are the active 2026 demand-response counterparties.

6. 100% Renewable Business Electricity Plans

REC-backed (Renewable Energy Credit) plans matching 100% of the customer's load with renewable generation. Premium versus a comparable fixed-rate plan: typically 0.3 to 0.7 cents per kWh in 2026. Plans range from REC-only (paper match) to bundled (where the REC and the underlying generation come from the same project).

Active commercial-renewable REPs: Green Mountain Energy (NRG), CleanChoice Energy, Energy Texas, Engie Resources, Constellation Energy, and increasingly Octopus Energy with VPP-connected products. Useful for sustainability reporting (Scope 2 reductions), state RPS credits, and customer-facing brand claims. Contract length matches fixed-rate at 12-36 months.

How to Switch Business Electricity Plans Texas Owners Should Run

The switch process is procedurally identical across plan types. The decisions are different, but the steps are the same. Plan 30 to 90 days from start to first new bill.

Step 1: Pull 12 to 24 Months of Bills

Identify the 11-digit ESI ID (Electric Service Identifier), usually at the top right of the bill. Confirm current REP, contract end date, and monthly kWh. For demand-metered accounts, also pull peak kW history, which determines the demand charge component on the next contract.

Step 2: Decide Broker or Direct

Brokers compare across 20 to 50 REP partners. The broker is paid by the REP, typically 0.1 to 0.5 cents per kWh embedded in the contract rate. Direct shopping (calling REPs, pulling EFLs from REP websites) avoids the markup. Loads under 100,000 kWh per year usually shop direct profitably; above that, broker leverage often pays back. PUCT Project No. 49947 requires registered brokers to disclose commission in writing.

Step 3: Sign a Letter of Authorization (LOA)

Required under PUCT Substantive Rule 25.475 before any third party can pull historical usage from the TDU. The LOA does not switch service, does not commit to a contract, and is limited to the specific data scope listed. Best practice: limit to 12 months of data, set a 90-day expiration, and sign only with PUCT-registered counterparties.

Step 4: Compare Three to Five EFLs

All on the same usage profile, same start date, same term. Compare the all-in rate (energy + delivery + ancillary + base charge + regulatory + estimated demand if applicable), not the headline energy line. Negotiate before signing:

• Bandwidth: target 80-120% for variable-load businesses, not the standard 90-110%
• Early termination fee: cap as a flat dollar amount, not the open-ended liquidated damages formula
• Auto-renewal: 60- to 90-day written notice, no automatic rollover to variable, or an explicit cap on the renewal rate
• Power factor assumption: get it in writing in the EFL
• Broker commission: get the disclosure in writing

Step 5: Sign and Switch

The new REP files enrollment with the TDU electronically. The switch occurs at the next scheduled meter read, typically 7 to 21 days after enrollment. There is no service interruption: the TDU keeps the wires energized regardless of supplier change. The first bill from the new REP arrives 30 to 45 days later. The previous REP issues a final bill for usage up to the switch date.

How to Save: Six Levers Most Texas Business Electricity Plans Customers Miss

These are the most common opportunities that show up after a contract is in place, in roughly the order they pay back:

1. Time the renewal to TDU annual reset. TDU rates change every June 1 under PUCT Rule 25.451. A May 31 contract end date is the cleanest exit window. Misaligned end dates push the customer onto a variable plan during the reset.
2. Negotiate the bandwidth. A 80-120% band on a 100,000 kWh per month business saves 5 to 10% of the bill versus the default 90-110% when load varies seasonally.
3. Right-size the term. 15-month plans currently price cheapest in May 2026 (around 6.66 cents per kWh in CenterPoint), but they create an August 2027 renewal date in a historically expensive window. A 24-month plan at 7.00 cents is often the better total cost of ownership.
4. Layer in demand response. A demand-metered customer with 200 kW peak can typically commit 30-50 kW of curtailment for $1,500 to $3,000 per year in credits, with no operational impact in most cases.
5. Audit power factor. Restaurants, clinics, and any business with motor loads should pull a power factor reading. Below 95% triggers TDU penalty pass-throughs around $40 per kW per month under PUCT Rule 25.481. Capacitor installs pay back in 12-24 months.
6. Verify the EFL renewable claim. REC-only "100% renewable" plans can carry a 0.5 cents per kWh premium that drops to 0.1 cents in some bundled-renewable products. The premium gap is often hidden until the EFL is read line by line.

Frequently Asked Questions About Business Electricity Plans Texas Owners Sign

How long does it take to switch business electricity plans in Texas? Enrollment takes 1 to 3 business days. The actual switch occurs at the next scheduled TDU meter read, typically 7 to 21 days after enrollment. The first bill from the new REP follows 30 to 45 days after the switch. Plan a 30- to 90-day total horizon from shopping to first new bill.

Can I cancel a business electricity contract early in Texas? Yes, but most contracts charge an early termination fee (ETF). The default is liquidated damages: the difference between the contract price and the prevailing market price, multiplied by the remaining MWh, plus a flat administrative fee. On a 24-month contract with 12 months and 120,000 kWh remaining, an ETF can run $2,000 to $5,000. Negotiate a flat-fee cap before signing.

What is the difference between a fixed and variable business electricity plan? Fixed plans lock the cents-per-kWh energy rate for the contract term. Variable plans float with wholesale market and the REP's pricing strategy, usually month to month. Fixed plans dominate Texas commercial because the predictability fits budgeting; variable plans are best used as a 30- to 90-day bridge between fixed contracts.

Do I have to use Power to Choose for business electricity plans? No. Power to Choose is the PUCT residential marketplace; commercial plans rarely appear there. For business plans, shop direct via REP websites or via a PUCT-registered broker.

What is the cheapest business electricity plan in Texas right now? As of May 2026, 15-month fixed-rate plans price lowest, with REPs like Gexa Energy quoting around 6.66 cents per kWh on the energy line in Oncor and CenterPoint territory. The all-in rate including delivery and base charges runs 8.5 to 11 cents per kWh on small commercial accounts.

What to Do Next

Pull the most recent business electricity bill, locate the ESI ID and contract end date, and benchmark the all-in rate against the table above. If the contract has more than 90 days left and the all-in rate is over 11 cents per kWh on a small commercial account, the buyer is paying above-market on business electricity rates and should plan a renewal strategy now. The pillar guide on commercial electricity rates in Texas and the REP comparison pillar cover the next layer.