The Best Texas Electricity Rates

Texas Electricity Rates and Plans

Texas has a deregulated electricity market, meaning you have the power to choose your electricity provider. While energy rates start lower than 11 cents per kWh, they can go well over 24 cents per kWh. Picking the right energy plan for your home’s energy consumption can greatly impact your energy costs.

Thanks to market competition, you’ll find 140-plus Texas energy providers registered with the Public Utility Commission of Texas (PUCT). Additionally, you can find many types of electricity plans in Texas, with various rate types and features. If you choose electricity plans with affordable fixed rates and contract terms of 12 months or longer, you may save hundreds of dollars in power bills over time.

In this guide, we’ll walk you through comparing Texas energy rates, choosing energy providers and securing the best plan for your Texas home.

Today’s Texas Energy Plans

Below, you’ll find some of the best energy plans, as well as some of the cheapest energy rates in Texas. Before selecting an energy plan, note that we recommend fixed-rate electricity plans for their predictable pricing and long-term savings.

You’ll find other energy plans in Texas, including variable-rate plans, time-of-use plans and bill credit plans. These other plan types don’t offer the price stability of fixed-rate plans.

For example, many bill credit plans advertise rates of around 11 cents per kWh, but these only apply if your home meets the required usage threshold, typically 1,000 or 2,000 kWh. If your usage falls short, your rate can increase to 24 cents per kWh or higher.

Before signing up for an energy plan advertising the cheapest energy rates, check to see if your home’s energy usage meets the requirements needed to earn the discounted rate.

The rates above are accurate as of [plan_rate_last_update ZIP_code=“77077” providers=“Gexa”] for the ZIP code 77077. The rates are the same across all ZIP codes in the CenterPoint service area. Rates shown are for 1,000 kWh usage.

Average Electricity Rates in Texas

The average electricity rate in Texas is 14.89 cents per kWh for residential customers and 8.64 cents per kWh for commercial customers, according to February 2025 data from the U.S. Energy Information Administration (EIA).

These prices show a small price hike from February 2024, when the average residential rate was 14.48 cents per kWh and the average commercial rate was 8.47 cents per kWh. However, Texas electricity costs remain below the national average of 16.44 cents per kWh for residential customers and 13.09 cents per kWh for commercial customers.

Houston, Dallas and Fort Worth are the three largest cities with deregulated electricity in Texas. As of May 2025, the Greater Houston area has an average electricity rate of 15.1 cents per kWh, while the Dallas-Fort Worth metroplex has an average rate of 15.6 cents per kWh. These figures are based on pricing data from 139 electricity plans available in each metropolitan area.

What’s a Good Energy Rate Right Now?

When comparing electricity providers in Texas, the lowest advertised rate may seem like the best deal, especially if you’re new to deregulated energy. However, the cheapest rates often come with hidden fees, complex pricing structures or other “gimmicks” that can increase your bills. Our energy experts recommend fixed-rate plans with transparent pricing and no hidden fees, even if other options advertise lower rates.

As of May 2025, the most competitive fixed-rate plans in Houston and Dallas-Fort Worth offer rates below 16 cents per kWh, and you might find occasional deals below 15 cents per kWh. Rates tend to be higher if you live away from a large metropolitan area, but you can usually find fixed-rate plans below 17 to 18 cents per kWh in less populated regions.

Since Texas has a competitive electricity market driven by supply and demand, electricity rates constantly change. Here are the main factors that influence electricity costs in the Lone Star State:

• Seasonal consumption patterns: Electricity rates tend to spike in summer due to the high power demand of air conditioners. During winter, electrical heating systems have a similar but less pronounced effect, since many homes use gas-fired heaters.
• Natural gas markets: Texas generates around 50% of its electricity from natural gas, which means gas prices strongly influence local electricity costs.
• Geographic location: Densely populated regions of Texas tend to have lower electricity costs than rural areas, which have increased transmission and distribution costs.
• Extreme weather: Texas electricity rates tend to spike during extreme weather events, especially if they disrupt the power supply. This happened in February 2021, when Winter Storm Uri disrupted natural gas and wind power infrastructure.

The Texas Deregulated Energy Landscape

Texas used to have traditional power companies that operated as monopolies within their service areas, controlling all stages of the electricity supply: Generation, transmission, distribution, metering and billing. However, the state deregulated its electricity market in 2002, creating competition and dividing electrical monopolies into three types of companies with different roles:

• Power generators: dedicated exclusively to electricity production
• Retail electricity providers (REPs): sell electricity plans to consumers
• Transmission and distribution (TDUs): in charge of grid operation and maintenance

Power generators produce electricity from a range of sources, including natural gas, coal, nuclear power, and wind and solar. Light companies then purchase that electricity in wholesale auctions overseen by the Electric Reliability Council of Texas (ERCOT), the independent system operator, and the PUCT. These companies then create electricity plans, selling them to you.

Finally, utilities manage the power grid in preset service areas, with the PUCT regulating the utility delivery fees these companies charge.

While the PUCT sets the legal and regulatory framework, ERCOT coordinates all power plants, utilities and electricity retailers in real time to ensure a stable energy supply. In other words, ERCOT manages the flow of electricity in Texas, balancing supply and demand.

Texas Electricity Providers vs. Utility Companies

If you live in a deregulated area of Texas, your monthly electricity bill includes charges from two different companies:

• Your energy provider
• Your local utility company

Utility companies manage the local power grid and deliver power to your home or business. On the other hand, energy providers sell electricity plans and provide customer service.

You can choose your power company, but you can’t choose your utility company. Your location in the Lone Star State determines which utility operates in your area. Your utility will only change if you move to a different service area.

For example, Oncor Electric Delivery manages the power grid for the Dallas-Fort Worth metroplex and surrounding communities, while CenterPoint Energy serves most of the Greater Houston area.

Texas Electricity Plans

While you’ll find hundreds of electricity plans available across Texas, most options fall into six general categories. When comparing energy providers in your ZIP code, understanding the differences between plan types is crucial for an informed decision.

• Fixed-rate plans: Your rate stays locked during your contract, protection you from rate hikes, but you’ll face early termination fees (ETFs) if you end your contract early.
• Variable-rate plans: There is no minimum contract term or cancellation fee, giving you the flexibility to switch plans at any time. However, your rate will change monthly, leading to unpredictable power bills.
• Green energy plans: These plans offer 100% green energy from sources such as solar panels and wind turbines. In comparison, most plans in Texas contain less than 30% renewable energy.
• No-deposit or prepaid plans: These plans have no monthly billing cycle and don’t require a security deposit. You’ll prepay for electricity before you use it, and your provider will subtract your daily usage from your account balance.
• Bill credit plans: Earn bill credits when your monthly usage reaches a minimum threshold, such as 1,000 or 2,000 kWh. These plans advertise rates as low as 11 cents per kWh if you earn the credits, but charge over 20 cents per kWh when you don’t.
• Time-of-use plans: These plans charge different energy prices depending on the time of day. They typically charge the highest rates during peak-usage hours, while offering low rates or even free electricity during off-peak hours.

Contract Terms: Fixed vs. Variable Rate Plans

When shopping for energy plans, a common debate is fixed-rate versus variable-rate.

Although fixed-rate plans have a contract term and cancellation fee, they lock in your energy price and offer predictable power bills. Variable-rate plans give you the flexibility to switch at any time, but this comes at the expense of price stability.

Frankly, we almost never recommend variable-rate plans. While having no contract may seem convenient, rates that change monthly based on market conditions will inevitably lead to bill surprises. Variable rates lead to unpredictable bills and expose you to seasonal price hikes.

That said, there are some situations where a variable-rate plan can make sense, temporarily. For example, starting a fixed-rate plan in the midst of summer could lock you into a long-term contract with very high rates. Instead, some customers may consider variable rates as a short-term energy solution to avoid getting locked into high fixed rates in midsummer.

However, this is a high-risk plan, as those variable rates paid during summer can be quite steep. Consider all of your options before signing up for a variable-rate plan. We recommend securing a low fixed rate before summer, avoiding the seasonal price spike completely.

Renewable Energy Plan Rates in Texas

Texas generates most of its electricity from fossil fuels—around 50% from gas and 13% from coal, according to the EIA. However, many electricity providers offer plans with 100% green energy content in the Lone Star State.

Some providers, such as Gexa Energy and Rhythm, offer 100% renewable energy in all their plans by default. Others, like Reliant and TXU, offer traditional and green energy plans. Some providers, including 4Change Energy and Just Energy, let you upgrade any plan to 100% green energy for a small monthly fee, typically $6.95 or $9.95.

Contrary to popular belief, renewable energy isn’t more expensive than electricity from fossil fuels. Many providers offer affordable fixed-rate plans in Texas with 100% green energy content.

For example, Rhythm Energy and Energy Texas offer renewable plans with rates of around 15 to 16 cents per kWh in major cities like Houston, Dallas and Fort Worth. Additionally, Gexa Energy offers 100% green energy bill credit plans with rates starting as low as 11 cents per kWh.

How To Compare Electricity Rates in Texas

One note before you start comparing electricity rates in Texas: Don’t let the advertised prices fool you. Cheap energy rates look great, but usage-based discounts may cause unpredictable energy bills and higher costs.

Instead, your first step in this line dance should be assessing your home’s energy usage. Follow the steps below to compare Texas electricity rates and find the best plan for your home.

• Know your power profile: Review past bills to understand your typical usage.
• Rank your energy priorities: What matters most to you, budget-friendly rates, green energy or no long-term commitment?
• Use an energy comparison marketplace: Visit an energy comparison marketplace, such as our partners at Home Energy Club, to compare the best electricity rates in Texas across multiple major light companies.
• Shop by ZIP code: In Texas, the providers, plans and rates vary based on where you live. Compare plans in your ZIP to get the right rates for your home.
• Filter based on your needs: Energy plans may automatically sort by lowest price at 1,000 kWh. These rates won’t apply if you live in a large home or a small apartment. Filter based on your usage, plan type or energy provider to find the best rates for you.
• Read the electricity facts label (EFL): This state-mandated document reveals the true story behind each plan’s pricing structure and terms. Read carefully before signing up.

How To Switch Energy Providers

Whether you’re new to Texas or a long-time resident of the state, switching energy providers can feel overwhelming. But, it doesn’t have to. It’s a simple process when using an energy comparison marketplace.

• Research providers in your area: Compare energy providers and electricity plans in your neighborhood. Consider customer reviews to determine how a company treats customers, not just the rates it advertises.
• Select your new light company: Once you’ve picked the right company and plan for your needs, click “Check Availability,” assess the plan’s details and sign up.
• Make the switch to your new provider:  Once you sign up, your new energy provider will handle the transition for you, including canceling your old plan.

In most cases, you only need to provide the following information to sign up for a new electricity provider in Texas:

• Your contact details
• Your service address
• Your new plan’s start date

If you’re canceling a current contract to sign up with a new energy provider, check your EFL for any cancellation charges before making the switch.

Same-Day Electricity in Texas

Most electricity providers in Texas offer same-day service if you submit your request before the cutoff time, which varies by company. For example, TriEagle Energy and TXU Energy accept same-day requests until 6:30 p.m., while Reliant has a cutoff time of 5:00 p.m.

Electricity providers typically offer same-day service at no additional cost. However, you may owe a setup fee if you live in a new build that doesn’t yet have an electrical service connection.

Same-day electricity is convenient, but we only recommend using this service during emergencies or as a last resort. You can enjoy peace of mind and ensure you have lights on when needed by comparing energy providers in advance.

Even if you’re moving to a new address, most providers allow you to schedule your plan before your move-in date, sometimes between 60 and 90 days in advance.

Texas Business Electricity Rates

Commercial electricity rates in Texas are typically lower than residential rates. As of February 2025, the EIA reported an average residential rate of 14.89 cents per kWh, compared with an average commercial rate of only 8.64 cents per kWh.

If you’re looking for a business electricity plan in Texas, the shopping process depends on your company’s number of power meters and monthly bills.

• If your monthly electricity bills are under $2,500 and your business has less than five power meters, you can shop for electricity plans online like a residential customer.
• If your business spends over $2,500 per month or has at least five power meters, you’ll typically have to request a custom quote from a provider.

Frequently Asked Questions

Our Rating Methodology

The This Old House Reviews Team supports our energy provider ratings and recommendations with a transparent, research-backed provider review methodology. Our process includes surveying electricity customers in deregulated markets like Texas, analyzing customer review trends, conducting mystery shopping, and consulting with energy experts. Each provider is scored based on performance in customer satisfaction, loyalty, digital experience, and service quality to produce a final rating on a 5-point scale.