"Small REP, lower rate" is not how Texas pricing actually works.
Many Texas-shopping guides treat a small independent REP as automatically cheaper than the big incumbents. That assumption misses how wholesale power is actually bought in ERCOT.
A small REP without a generation parent buys wholesale at the same auction as Reliant, TXU and Direct Energy. It does not get a volume discount. What it can do is run leaner overhead, skip the heavy TV advertising and price closer to wholesale. What it cannot do is hedge a five-year fixed rate the way a Calpine-backed or NRG-backed REP can.
Second, the advertised rate is only a fraction of your bill. About a third to a half of a typical Texas residential bill is the TDU delivery pass-through plus the PUCT-approved fixed charge. Those are identical across every REP in your zone. The "Simple Pricing" promise is real, but it only governs the supply slice.
What you are actually buying from Varsity.
Every Texas REP bill, including a Varsity Energy bill, splits into three parts. Only one of them changes when you switch from a big incumbent to a small independent REP.
Layer 1 — Shoppable
Varsity supply rate
The cents-per-kWh price Varsity quotes on its EFL, plus the flat monthly base charge. This is the only line that changes when you switch from Reliant or TXU to Varsity.
Layer 2 — Regulated
TDU delivery
Wires, poles, the meter on your house. Set by Oncor, CenterPoint, AEP Texas or TNMP and approved by the PUCT. Identical for every REP in your zone, Varsity included.
Layer 3 — Mandatory
Fees, riders and taxes
PUCT assessment, gross-receipts tax, low-income riders and any local sales tax. Small in absolute dollars, but identical across every Texas REP.
When you compare Varsity Energy against TXU, Reliant or Champion, you are only comparing Layer 1. The other two layers are identical inside your TDU zone.
Every line on a Varsity EFL, decoded.
A Varsity Electricity Facts Label uses the same language every Texas REP uses. Here is what each line actually means and who sets it.
| Line on the EFL | What it really is | Who sets it | Moves with REP? |
|---|---|---|---|
| Energy charge (¢/kWh) | Varsity Energy supply rate | Varsity, on the EFL | Yes |
| Base charge ($/month) | Flat REP service fee | Varsity, on the EFL | Yes |
| TDU delivery (¢/kWh) | Wires + poles per kWh | PUCT via Oncor / CenterPoint / AEP / TNMP | No |
| TDU fixed monthly | Wires-company customer charge | PUCT, by zone | No |
| Usage credit ($) | Bill discount inside a kWh tier | Varsity, on the EFL | Tier-gated |
| Early termination fee (ETF) | Penalty if you leave early | Varsity, in the Terms of Service | Sign once |
| Renewable content (%) | Share of supply backed by RECs | Varsity, on the EFL | Yes |
Texas REPs vary in many things, but every EFL uses these labels in this order. Once you can read one, you can read all of them.
~55% of a Varsity bill is set by people who are not Varsity.
"Simple Pricing" is a real promise on the supply slice. Varsity sells a small menu of fixed-rate plans, no tier-jump bill credits as a default, and predictable monthly base fees.
But at 1,176 kWh of typical Texas usage, only about 45 to 55% of the dollar total is the Varsity supply line. The remainder is TDU pass-through and PUCT-set charges that Varsity does not control.
That is why two Varsity customers, one in Houston (CenterPoint) and one in Dallas (Oncor), can pay different totals at the same usage and same Varsity plan. Different TDU, different delivery rate.
Simple 12 fixed, illustrative
How a small independent Texas REP actually operates.
Varsity Energy does not own a power plant. Like every retail-only REP, it buys wholesale from ERCOT and resells to households and businesses. Four price-setting processes run in parallel behind a Simple Pricing plan.
Wholesale buying in ERCOT
Varsity buys power in the ERCOT day-ahead and real-time markets, or via bilateral block contracts with generators. ERCOT prices can settle anywhere from about $30/MWh in mild months to the system cap of $5,000/MWh during scarcity events.
Hedging without a parent fleet
A small REP without a generation parent hedges through financial contracts (forwards and swaps) rather than owning gas turbines. That works fine in normal markets and gets expensive when forward curves jump after a freeze or heatwave.
TDU pass-through and PUCT filings
Whatever Oncor, CenterPoint, AEP Texas or TNMP charges Varsity for delivery is passed straight onto your bill. Varsity files an EFL with the PUCT for every plan and updates it when wholesale or TDU rates move.
Customer service and billing
Varsity reaches customers via its own Houston office and call centre rather than the heavy national TV spend the big REPs use. Lower acquisition cost means more of the supply rate can be priced for the customer rather than the marketing budget.
A small independent REP wins on overhead and loses on hedge depth. That trade-off explains why their fixed rates tend to look competitive in normal years and why their variable rates can swing wider in stress periods.
How Varsity customers (and every Texas customer) quietly overpay.
Five recurring patterns we see on Texas REP bills. Each costs real money. Each is fixable.
If your Varsity bill is past due: CEAP and Texas payment help.
Texas administers the federal LIHEAP programme under the state name CEAP, run by the TDHCA. Eligible households can receive assistance with electricity arrears regardless of which REP they use, Varsity included.
Apply through your local sub-recipient agency or by calling 211 Texas. Bring a recent Varsity bill, ID, proof of income and proof of address.
What to do before you sign with Varsity Energy.
Find your usage
Pull the kWh used on each of your last 12 months. The "average use" number on your current bill is usually a 12-month rolling figure.
Read the Varsity EFL in full
Look for the average price at 500, 1,000 and 2,000 kWh, the base fee, the ETF, and any usage-tier credit conditions.
Cross-check on Power to Choose
The state-run Power to Choose site lists every PUCT-licensed REP, Varsity included, with full EFLs side by side.
Match the contract length to your stay
A 24-month Simple plan is only cheaper than a 12-month plan if you stay the full term. ETFs typically run $150 to $250 if you cancel early.
Set a renewal alert
Add a calendar reminder for month 10 of any Varsity fixed contract. Shop again before the auto-renewal letter lands.
Keep the TDU emergency number
For outages, call your TDU (Oncor, CenterPoint, AEP Texas or TNMP) not Varsity. Wires problems are the TDU's job no matter which REP you use.
Common questions about Varsity Energy.
Yes. As of May 2026, Varsity Energy LLC is an active Retail Electric Provider in Texas under PUCT certificate number 10271, headquartered in Houston (2925 Richmond Ave, Suite 1200, Houston, TX 77098), with an open public-facing sign-up flow and a customer-service line at 877-827-7389. Confirm current status on the PUCT REP directory before you sign.
Varsity Energy is privately held and locally run from Houston. Unlike Reliant, TXU, Champion or Green Mountain, it is not a brand of NRG, Vistra, Constellation or another national utility holding company. Its small size keeps overhead low and removes one tier of corporate layering, but it also means there is no parent generation fleet to hedge wholesale exposure during extreme ERCOT events.
Varsity offers plans across the four deregulated Texas TDU zones: Oncor (Dallas, Fort Worth, much of north and west Texas), CenterPoint (Houston and the surrounding Gulf Coast), AEP Texas (south and west Texas) and TNMP (parts of north and south Texas). The Varsity supply rate is set per plan; the TDU delivery line on your bill is set by your local wires company, not by Varsity.
A fixed-rate Varsity plan locks the energy charge for the full contract term (commonly 12 or 24 months). A variable plan recalculates monthly, can move with wholesale ERCOT prices and can rise sharply during summer heat or winter freeze events. Varsity's flagship offering is its fixed Simple Pricing product; variable-rate exposure is rarely the right answer in Texas after February 2021.
No. Outage repairs are the responsibility of your TDU, not your REP. If you lose power, call your local TDU outage line: Oncor (888-313-4747), CenterPoint (713-207-2222), AEP Texas (866-223-8508) or TNMP (888-866-7456). Varsity's customer service line at 877-827-7389 handles billing, plan changes and enrolment, not the wires.
On the supply slice (the only slice that varies between REPs), small independent REPs like Varsity tend to sit close to the median fixed-rate plan listed on Power to Choose. They are rarely the absolute cheapest headline number, because the very lowest advertised rates often come from bill-credit-tier plans that only work above a specific kWh threshold. For predictable usage between 800 and 1,500 kWh per month, a Varsity Simple plan and the comparable fixed plans from Champion, TXU or Reliant typically land within a cent or two of each other once you compute the all-in dollar total at your actual usage.
More U.S. states with energy choice
Same playbook, different utility. Pick another deregulated state to compare utilities, suppliers and switching rules.
