Texas vs Louisiana: Comparing Energy Costs in the South

Texas vs Louisiana: Comparing Energy Costs in the South

Texas and Louisiana sit at the heart of America's energy industry. Both states produce enormous quantities of oil and natural gas, yet their electricity markets operate under fundamentally different structures — and their rates reflect it.

Texas residents pay an average of 16.0 cents per kWh, while Louisiana residents pay just 12.7 cents per kWh. That 3.3-cent gap is significant. See the full breakdown in our Louisiana vs Texas rate comparison.

The Numbers

| Metric | Texas | Louisiana |

|--------|-------|-----------|

| Residential rate | 16.0¢/kWh | 12.7¢/kWh |

| Average monthly bill | $159.25 | $153.11 |

| Monthly usage | 1,096 kWh | 1,202 kWh |

| Rate rank (nationwide) | #24 | #48 (4th lowest) |

| Market type | Deregulated | Regulated |

Louisiana has the 4th-lowest electricity rate in the nation, while Texas sits near the middle. Yet their monthly bills are surprisingly close ($159 vs $153) because Louisiana households use more electricity — 1,202 kWh per month, among the highest in the country.

Texas: The Deregulated Market

How ERCOT Works

Texas operates its own independent electric grid through ERCOT (Electric Reliability Council of Texas), which covers about 90% of the state's load. Unlike most states, Texas has a deregulated retail electricity market where consumers can choose their provider. For a deep dive into Texas rates, visit our Texas electricity rates page.

The Double-Edged Sword of Choice

Deregulation gives Texans dozens of retail electricity providers to choose from — but that choice comes with complexity. Plans vary widely:

• Fixed-rate plans lock in a price for 12-36 months
• Variable-rate plans fluctuate monthly with market conditions
• Indexed plans track wholesale prices
• Free nights/weekends plans offer complex pricing structures

The average rate of 16.0¢/kWh includes customers on both good and bad plans. Savvy shoppers can find rates well below the average, while those who don't actively manage their plans may pay significantly more.

Transmission and Distribution Charges

Even in Texas's deregulated market, transmission and distribution remain regulated monopolies. These charges (typically 4-5¢/kWh) are the same regardless of which retail provider you choose, setting a floor on how low rates can go.

Louisiana: Regulated Simplicity

Traditional Utility Model

Louisiana operates a traditional regulated market where utilities like Entergy Louisiana and SWEPCO serve designated territories. The Louisiana Public Service Commission sets rates through periodic rate cases. For details, see our Louisiana electricity rates page.

Why Louisiana Rates Are Low

1. Abundant natural gas — Louisiana is a top natural gas producer, and proximity to fuel keeps generation costs low
2. Nuclear power — Entergy's River Bend and Waterford plants provide low-cost baseload generation
3. Industrial cross-subsidization — Louisiana's massive industrial sector (petrochemical plants, refineries) shares grid costs
4. Lower regulatory costs — simpler market structure means lower administrative overhead

Major Louisiana Utilities

• Entergy Louisiana — serves approximately 1.1 million customers
• SWEPCO — serves northwest Louisiana
• Cleco — serves central Louisiana

The Deregulation Debate

The Texas-Louisiana comparison is often cited in debates about electricity deregulation:

Pro-deregulation argument: Texas consumers have choice, innovation, and competition that drives efficiency. Renewable energy has boomed under deregulation.

Pro-regulation argument: Louisiana delivers lower rates with simpler billing and no risk of consumers ending up on expensive variable-rate plans.

The reality is nuanced. Texas's deregulated market has driven massive wind and solar investment, but it also produced the February 2021 winter storm crisis where some variable-rate customers saw bills exceeding $10,000.

Related Comparisons

See how Texas and Louisiana compare to their other neighbors:

• Arkansas vs Texas — 2.8¢ difference
• Oklahoma vs Texas — 2.7¢ difference
• Arkansas vs Louisiana — both low-rate states
• Louisiana vs Mississippi — Gulf Coast neighbors
• Browse all Southern state comparisons for the complete picture

What You Should Do

If you're in Texas: Your rate depends heavily on which plan you chose. If you haven't shopped for a new plan in the last year, you may be overpaying. Check your rate against local averages to find out.

If you're in Louisiana: Your rate is set by the utility commission, so there's less variability — but billing errors still happen. An independent bill verification can confirm your charges are calculated correctly.

*Data source: U.S. Energy Information Administration (EIA), November 2025. For the complete comparison, visit our Louisiana vs Texas comparison page.*