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Texas Electricity Guide

Texas has a deregulated electricity market in most areas, meaning you can choose your Retail Electric Provider (REP). Oncor and CenterPoint are Transmission and Distribution Utilities (TDUs) that deliver power, but you shop for your energy supplier.

Average Rate

11.5-14¢/kWh

varies by REP and plan type

· Source: EIA

Deregulated marketChoose your REPERCOT gridVariable rate plans available

Texas Electric Utilities

Oncor (TDU)
10 million customers

Service Cities:

DallasFort WorthArlingtonPlanoIrving
CenterPoint Energy (TDU)
2.8 million customers

Service Cities:

HoustonSugar LandThe Woodlands
AEP Texas (TDU)
1 million customers

Service Cities:

Corpus ChristiLaredo

Texas Electricity Guide

In-depth guidance on rate plans, shopping, and bill optimization for Texas households.

How Texas Deregulation Works

In 1999, Texas SB 7 broke vertically-integrated utilities into three pieces: power generators, Transmission and Distribution Utilities (TDUs) like Oncor that own the wires, and Retail Electric Providers (REPs) that sell you the energy. Customers in deregulated areas — about 85% of the state by population — shop for their REP, while the TDU is assigned by location and bills your REP for the delivery charges that pass through to you.

The split shows up on every bill: a 'TDU delivery charges' line set by your wires utility, plus an 'energy charges' line set by your REP. The TDU portion is the same across all REPs in your area. The REP portion is what's competitive — and where shopping pays off.

  • Oncor (TDU): Serves Dallas-Fort Worth metroplex and much of north Texas. ~10 million customers.
  • CenterPoint (TDU): Serves Houston metro, Sugar Land, The Woodlands. ~2.8 million customers.
  • AEP Texas (TDU): Serves Corpus Christi, Laredo, McAllen, central and west Texas. ~1 million customers.
  • TNMP (TDU): Texas-New Mexico Power. Serves parts of east, central, and south Texas. ~250,000 customers.
  • Regulated areas: Austin Energy (Austin), CPS Energy (San Antonio), most rural cooperatives — you can't choose a REP in these zones.

Texas Electricity Plan Types Explained

Every plan on Power to Choose falls into one of three buckets, and choosing the right type matters more than chasing the lowest headline rate.

  • Fixed-rate plans: Energy rate locked for 6, 12, 24, or 36 months. Best for most households — protects against summer wholesale spikes. Early termination fees (typically $150-$300) apply if you break the contract.
  • Variable-rate plans: Rate changes month to month at the REP's discretion. Often start cheap, then climb sharply. Rarely save money over a full year. Avoid unless you actively re-shop every month.
  • Indexed plans: Rate tied to a wholesale benchmark (often the ERCOT settlement point price). Highest risk — during the February 2021 freeze, indexed customers saw bills jump 100x normal. Suitable only for sophisticated users with backup generation.
  • Free Nights / Free Weekends plans: Charges 0¢/kWh during specific hours (typically 9pm-6am or all weekend), but charges higher daytime rates. Math works out only if you can shift 30%+ of usage off-peak — EV owners and night-shift workers benefit most.
  • Time-of-Use (TOU) plans: Three or four price tiers across the day. Less aggressive than Free Nights but more flexible. Good for households running pool pumps, EVs, or laundry overnight — see our Level 2 EV chargers guide for the overnight charging side of this strategy.

How to Shop for a Texas Electricity Plan (Step-by-Step)

The lowest headline rate on Power to Choose is rarely the lowest actual cost. Here's the process that works:

  • 1. Find your average monthly kWh: Look at your last 12 bills, average them. Most Texans land between 1,000 and 1,500 kWh/month — but homes with pools or central AC over 3 tons run 1,800-2,500 kWh in summer.
  • 2. Filter by your TDU on powertochoose.org: Enter your ZIP. Plans not available in your area auto-filter. Sort by 'Average Price' for your usage level (500, 1000, or 2000 kWh).
  • 3. Open the EFL on every plan you're considering: The Electricity Facts Label shows actual price at 500, 1000, and 2000 kWh after all credits and base charges. The headline price is often only true at one usage level — outside that band you can pay 30-50% more.
  • 4. Read the Terms of Service for the early termination fee: Most fixed plans charge $20-$25 per remaining month, capped at $150-$300. If you might move or sell within the term, factor this in.
  • 5. Avoid plans under 6 months: Short-term promo plans usually roll over to month-to-month variable rates that climb fast. 12 months is the sweet spot for most households.

Average Texas Electricity Rates by Major City (2026)

Texas rates vary by TDU territory and by which REPs are competing in each market. These averages are based on 2026 Power to Choose data for fixed 12-month plans at 1,000 kWh of monthly use.

  • Dallas-Fort Worth (Oncor): Avg 13.8¢/kWh. Most competitive market in Texas — 50+ REPs, frequent promotional rates. See Dallas rates and Fort Worth rates.
  • Houston (CenterPoint): Avg 14.2¢/kWh. Higher TDU delivery charges than Oncor — same REPs but ~5% higher all-in. See Houston rates.
  • Corpus Christi / McAllen / Laredo (AEP Texas): Avg 14.5¢/kWh. Fewer REPs compete here, slightly higher rates. See Corpus Christi rates.
  • Austin (Austin Energy — regulated): Avg 11.0¢/kWh tiered. Lower than deregulated areas because it's a municipal utility, but no choice and no shopping savings.
  • San Antonio (CPS Energy — regulated): Avg 10.5¢/kWh tiered. Lowest residential rates in major Texas cities, again no choice.

Common Texas Bill Surprises and Hidden Charges

Texas REPs are tightly regulated by the Public Utility Commission, but the structure of bill credits and tiered pricing means the rate you see on Power to Choose is often not the rate you actually pay. We've audited thousands of Texas bills — the most common errors:

  • Missed bill credit thresholds: Most credit-based plans require usage between 1,000-2,000 kWh. Use 950 kWh — no credit. The same plan can cost 9¢/kWh at 1,200 kWh and 19¢/kWh at 800 kWh.
  • Minimum usage / base charges: Some plans charge a flat $9.95/month base charge plus the energy rate. At 500 kWh, this adds 2¢/kWh effective. At 2,000 kWh it adds only 0.5¢/kWh — disproportionately hurts low-usage households.
  • TDU pass-through changes: Oncor, CenterPoint, and AEP Texas can adjust delivery charges with PUC approval. These pass through with no notice from your REP — even on a fixed-rate plan.
  • Renewable surcharges sold as 'green premiums': Many '100% green' plans charge 1-2¢/kWh more than equivalent brown plans. Texas has so much wind generation that the actual cost of green energy is often lower than the premium suggests.
  • Auto-renewal at higher rates: When your fixed contract expires, most REPs auto-roll you to a month-to-month variable rate — typically 30-60% higher. Set a calendar reminder 30 days before contract end and re-shop.
  • AC-driven summer spikes: Texas summer bills are AC bills. A smart thermostat and a home energy monitor usually show the cheapest 10-15% bill cut in Houston, Dallas, and Austin households — even before you re-shop your REP.

Texas Billing Guides & Articles

4 min read
Texas Electricity: Entergy and SWEPCO in Regulated Areas

Understanding electricity rates in Texas's regulated utility areas served by Entergy and SWEPCO.

12 min read
Understanding Texas Electricity Deregulation: A Complete Guide

Texas has a unique deregulated electricity market. Learn how it works, what it means for your bill, and how to shop for the best rates.

9 min read
Oncor vs CenterPoint: What's the Difference?

Oncor and CenterPoint are Texas's two largest TDUs. Learn what they do, how they affect your bill, and why you can't choose between them.

10 min read
How ERCOT Affects Your Texas Electric Bill

ERCOT manages the Texas power grid. Learn how their decisions impact wholesale prices, reliability, and ultimately your monthly bill.

11 min read
Summer Electricity Bills in Texas: Why They're So High (And What You Can Do)

Texas summer electric bills can be shocking. Learn why they spike, how much is normal, and practical strategies to reduce cooling costs.

10 min read
Understanding Your AEP Ohio Electric Bill: A Complete Guide

Learn how to read your AEP Ohio electric bill, understand generation vs distribution charges, and find savings opportunities in Ohio's deregulated market.

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