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Texas Electricity Rates

Lowest electric rates in Texas today:

Source: EnergyBot (updated daily, averages based on 4 month trends)

Texas Energy Market Data

Last updated May 2020

  • The average Texas commercial electricity rate was 7.9 ¢/kWh (24% lower than the national average).
  • The average Texas residential electricity rate was 11.79 ¢/kWh (7% lower than the national average).
  • Texas leads the nation in electricity generation from wind.
  • Texas ranks fifth in the nation in electricity generation from solar.
Texas energy data from The U.S. Energy Information Administration (EIA)

Since 2002, Texas residential and business customers are able to shop Retail Electric Providers (REPs) to find the cheapest electric rate.

The result is a more competitive energy market forcing Texas electricity providers to be more efficient and keep pricing low. It also gave residential electricity customers and commercial electricity customers the power to choose their electricity plan from the long list of retail energy suppliers serving Texas.

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Texas Commercial Electricity Rates and Plans

How to find the best electric rate for your business

For businesses of all sizes – from small businesses to enterprise-level, the Texas deregulated market has enabled competition. Today, every business has the ability to compare energy plans from top energy suppliers and shop for the best rate available.

In most cases, businesses will be able to effectively manage and/or reduce their monthly electricity costs by switching energy plans and providers every year.

Texas Electricity Pricing Trends

Cheapest Texas Electric Rates:

Source: EnergyBot Market Data

What is Power to Choose Texas?

Power to Choose is the official electric choice website sponsored and managed by the Public Utility Commission of Texas (PUC), Power To Choose is a consumer website that enables retail electric providers to list energy plans and rates – for free – thus enabling consumers to compare and then choose an electric plan for their home, but not their business.

Power To Choose for Business

The Power To Choose website does not show rates for Texas businesses. Instead, it gives a static list of current suppliers with their generic contact information.

EnergyBot allows business users to browse commercial electricity rates and plans from various suppliers. Our rates are updated in realtime daily.

How to Switch Electricity Plans in Texas

In a competitive electricity market like Texas, both commercial and residential customers have the power to choose their specific energy supplier, plan and rate, and then switch – based on any existing contract terms, renewal dates and fees. As a Texas electricity customer, it’s important to track your contract renewal date. When your energy plan is due to renew, it’s time to compare electricity rates and switch to the best rate for your home or business. When switching energy plans, keep these 5 easy steps in mind:

Step 1: Compare energy providers and energy prices online

This is the easy part and it starts online. Today, businesses have a variety of online websites and tools to research and compare energy providers, plans, and rates. The best way to compare providers is to use a simple website like EnergyBot. In less than 5 minutes, you can enter basic information about your business, like your zip code and monthly electricity bill, and compare dozens of top energy suppliers in your area to find the lowest energy rate.

Step 2: Take time to review the energy plan details

When you are comparing electricity plans, it will pay – literally – to take time to review the plan details, contract terms, and legal copy. Energy companies may entice you with a low rate, yet the fine print will reveal that it is a variable-rate – which is only applicable when you are in a specific range of kWh usage. Also, review the contract term, cancellation fees, and out clauses before signing up for a new plan.

It’s important to do your research and we have you covered. Check out this article to learn more about the different types of energy plans and rates.

Step 3: Upload your most recent electricity bill

In many cases, the energy supplier, broker or website that you are using to find a new electricity plan will ask you to upload your most recent electricity bill. Although this may feel a bit intrusive, it provides pertinent account information and is important to securing the best energy rate available for your business. Your energy bill has your business information as well as the data that outlines your monthly energy usage.

To add, your new energy supplier will require proof of your energy usage before you can switch and your electricity bill is the easiest way to meet the requirement.

Step 4: Request a custom electricity pricing quote

If you own or manage a larger business with high energy usage (and higher monthly bill), then it may be beneficial to request a custom pricing quote. For larger companies, the process is a bit different. Due to your high energy usage, energy suppliers require a comprehensive review of your energy usage to provide a custom quote on a new plan and rate. At EnergyBot, you can get custom pricing support from one of our energy experts.

Step 5: Confirm the switch to a new energy provider

After authorizing a switch to a new energy provider, you will receive a confirmation email with the plan details and start date. It’s very important to review the plan you authorized and the new start date. The transition to a new supplier will be seamless…you won’t even notice until you get the electricity bill the next month.

Texas Energy Plan Types

Energy suppliers offer two different types of plans for residential and business customers: a fixed-rate plans or a variable-rate plan.

Each type of plan has its respective pros and cons. As a Texas customer, it’s important to understand the two types of plans before signing up for an electricity plan for your home and/or business.

Fixed-Rate Electricity Plans

The simple definition of a fixed-rate plan is that you are signing a contract with an energy supplier that offers a fixed-rate – meaning that the rate will remain constant for the term of the contract. Regardless of weather, natural events like hurricanes, or market volatility, your rate will not change. In most cases, fixed-rate plans have a term length of 6, 12, 24, or 36 months.

Variable-Rate Electricity Plans

The simple definition of a variable-rate plan is that you are signing a contract with an energy supplier that offers a variable-rate – meaning that the rate may change on a monthly basis based on market factors. Variable-rate plans offer more flexibility but also present more volatility in pricing which may impact your monthly electricity bill.

It is important to audit your energy usage and then select the right plan – fixed-rate plan or variable-rate plan – before signing a contract with an energy supplier.

The Texas Energy Grid is Managed by ERCOT

The Texas Electricity Grid and ERCOT

ERCOT is a membership-based nonprofit corporation that is governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature and is tasked with managing the flow of power to 26 million Texas residents, 8 million locations and 90% of the Texas grid. ERCOT members encompass many stakeholders – including consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

What is the difference between a Utility and an Energy Provider?

Utilities are the entities in charge of the operation and maintenance of the energy infrastructure, like wires and towers. The major utilities serving the state of Texas include Oncor and AEP. They are responsible for transporting electricity from the generators to residential homes and businesses across Texas.

Energy providers in Texas like TXU, Direct Energy, and Cirro are the competitive energy retailers. Each energy provider buys energy from the wholesale market (the generators) and then re-sells it to consumers (homeowners, renters, and businesses).

In most cases, the consumer, the homeowner, renter, or business, signs a contract with an energy provider for a specific energy plan. The basic energy plan details the rate class, the energy rate per kWh, the contract term length (6, 12, 24, 36 months), and other contract terms like cancellation fee policy.

Texas Capital Building in Austin

About Texas

With a population of 29 million in over 627 million square miles, Texas is the 2nd largest state in the U.S. – in both population and size – behind only California and Alaska respectively.

Historically, prior to World War II, four major industries served as the foundation for the Texas economy: cattle, cotton, timber, and oil. The 1960’s ushered in the Texas oil boom that transformed the state and economy into a more industrial hub for the country. With its history, it’s no surprise that Texas’s largest 10 public companies are in the oil industry, yet the state now has an influx of major corporations due its friendly business environment of light regulation, low taxes and low labor costs. In the last 2 decades, Texas has continued to draw corporations and businesses to the state, especially in the technology sector, with Austin emerging as a more centrally located technology hub – outside of Silicon Valley.

Texas Business Profile

The 2.7 million small businesses in the state of Texas employ over 4.7 million people and added nearly 95,000 net new jobs, according to the latest SBA Small Business Profile. The economic growth in Texas has remained strong as the annual growth rate is 5%, outpacing overall U.S. growth by a full percentage point, and the state’s unemployment rate has continued to decline, dropping from 4.1% to 3.8% in 2019.

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