How the money works

How everybody else in this market gets paid

Nobody advising you on Texas electricity is doing it for nothing. Here is exactly who pays them, and what it does to the advice. None of this is illegal and most of it is disclosed somewhere. Almost none of it is understood by the person paying for it.

One

The 1,000 kWh game

Every comparison list in Texas, including the state's own Power to Choose, ranks plans by what they would cost a household using exactly 1,000 kWh a month. One number, one usage level, and it decides who appears at the top of the page.

So plans are built to win at exactly that number.

The detail

The commonest device is a bill credit: a plan gives you $100 back, but only in a month you cross 1,000 kWh. At precisely 1,000 it looks superb. At 900 the credit never arrives and you pay a high underlying rate for the privilege. The other device is a rate that quietly steps up above 1,000 kWh, which looks excellent right up until the August you actually need the air conditioning.

A Texas house is almost never at 1,000 kWh. It swings with the season, routinely by more than double between February and August. The plan that tops the list is frequently not the cheapest plan for the house standing in front of it.

This is not a secret and it is not a scandal. It is a published methodology that everyone in the industry knows about and that virtually no customer does. We have had this conversation with people who have worked inside a retail electricity company and found it surprising.

It is also the entire reason this tool exists. We price every plan against your twelve months, not against a household that does not exist. It is also worth knowing that the state's site has not meaningfully changed in about a decade — its front page reads the same today as it did in 2015, which anyone can confirm in the Internet Archive. The 1,000 kWh ranking it uses has been publicly criticised since at least 2015, including by the Commission's own chair at the time.

Two

The comparison site that earns when you sign

Most electricity comparison sites are not charities and not neutral. The standard arrangement is that the retailer pays the site a fee for every customer who enrols through it.

That fee is not identical across retailers. Some pay more than others, some pay nothing at all because they refuse to play, and a site earns nothing whatsoever when the honest answer is stay on the plan you already have.

You can see the shape of it without taking anyone's word: click through from most comparison sites and the link carries a tracking tag identifying who sent you. That tag is how the fee gets attributed.

A ranking produced by someone who is paid differently depending on which row you click is not a ranking. It is a shelf, and shelf space is for sale.

Two and a half

And several of those sites have the same owner. One is owned by an electricity company.

This part is not an accusation. Every fact in it comes from the companies' own announcements and their own filings with the Commission, and you can check all of it.

The two largest comparison sites in Texas have the same owner. Red Ventures bought SaveOnEnergy in 2012 and then bought Choose Energy, the second-largest, in 2017. Both are announced on Red Ventures' own site. So a shopper who compares one against the other, to see whether the answers agree, is asking the same company twice.

Power Wizard is owned by an electricity company. Its own disclosure filed with the Public Utility Commission says: "Power Wizard is owned by NextEra Energy Resources, LLC." NextEra also owns Gexa Energy, Frontier Utilities and NextEra Energy Services — three retailers selling into the same market its comparison site ranks.

Nothing there is hidden. It is written down, in public, by the companies themselves. It is simply never in front of you at the moment you are choosing.

And the rule stops one step short of the thing you would want to know. Texas requires a broker to tell you how they are paid and by whom, before they start. It does not require them to tell you how much. When that rule was written the Commission was asked to require the amount and specifically declined.

Which is why we print ours. $950 for an audit and $600 a meter a year, on the page, before you ask.

Three

The business broker who is "free"

If you run a business, you have probably been called by an energy broker. Their service is presented as free to you, and no invoice ever arrives, which makes it feel free.

It is not. The broker is paid by whichever retailer wins your contract, as a small adder folded into the rate you are quoted. It is measured in mils, thousandths of a dollar per kWh, and typically runs somewhere between $1 and $6 per MWh.

A business using 1,000,000 kWh a year, adder of 0.3¢ per kWh

1,000,000 × $0.003 = $3,000 a year
Across a three-year contract  = $9,000 Paid by you. Never itemised on any bill you receive.

Again: legal, normal, and usually disclosed somewhere in the paperwork. But look at what it does to the incentives. The broker earns more when your rate is higher. The broker earns nothing if the right answer is to stay where you are. And you cannot separate the retailer's price from the broker's cut, because you are only ever shown one number.

Four

What happens when nobody is paid to watch

The single most expensive thing in Texas electricity is not choosing badly. It is a contract that quietly ends.

When a fixed contract expires and nobody acts, the account rolls to a month-to-month rate, which is a variable one the rule lets them change every cycle, uncapped. Nobody is obliged to ring you. For a household that is a few hundred dollars a year. For a business it can be tens of thousands.

Notice who has an incentive to prevent it. The retailer does not: you are now their most profitable customer. The broker does not, unless they happen to remember. The comparison site has already been paid and has no ongoing relationship with you at all.

Everybody in this market is paid at the moment you sign. Nobody is paid to keep watching afterwards, which is precisely when the money is lost.

So how do we get paid?

  • The free tool: not at all. No commission, no referral fee, no kickback, no per-unit adder, from any electricity company, ever. The sign-up links are the ones the state publishes, passed through untouched, which is why they credit Power to Choose rather than us.
  • Homes: a flat annual fee, from you. We watch your contract date, re-shop it against your real meter data, and tell you when to move. Same fee whether you switch or stay.
  • Businesses: a flat annual fee per meter, published. Never a per-kWh adder, never a percentage of savings. We put the same specification to five or six retailers on the same morning with no commission in any of them, and send you every quote we get back.

Which means we are the only people here who get paid the same for telling you to do nothing. That is not a slogan, it is the whole design, and it is why we can show you the full list of every plan we priced rather than the four we would like you to look at.

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