The current average residential electricity rate in Texas is 15.91¢ per kWh (as of August 2026), which is 2.25 cents per kWh below the U.S. average. Compare rates, view historical trends, and estimate your monthly energy bill below.
Source: U.S. Energy Information Administration (EIA). Updated monthly, latest month: August 2026.
Current Electricity Rates by Sector
Below is a break down of average rates per kilowatt-hour for residential homes, commercial businesses, and industrial facilities in Texas.
| Customer type | Texas average / kWh | Change vs. same month last year |
|---|---|---|
| Residential (homes) | 15.91¢ | ▲ 0.51¢ (+3.3%) |
| Commercial (businesses) | 8.96¢ | ▲ 0.20¢ (+2.3%) |
| Industrial (factories) | 7.21¢ | ▲ 0.79¢ (+12.3%) |
Texas Historical Electricity Rate Chart
Compare historical residential electricity price trends in Texas over the past 24 months against the national U.S. average.
Estimate Your Texas Electric Bill
Use our calculator to estimate your total monthly electricity expense based on Texas’s average residential rates.
Monthly electricity cost: $0 (yearly: $0)
Understanding Electricity Rates in Texas
Texas operates a deregulated electricity market covering roughly 85% of the state. Unlike traditional states where a single utility company sets electricity prices and handles billing, the Texas system separates power production, grid delivery, and retail sales.
How Deregulation Affects Your Monthly Bill
When you receive a power bill in Texas, your total cost comes from two distinct parts:
- Retail Electric Provider (REP) Charges: This is the supply rate you lock in when choosing an energy plan. Retailers purchase electricity on the wholesale market operated by the Electric Reliability Council of Texas (ERCOT) and resell it to consumers.
- Transmission & Distribution Utility (TDU) Fees: These are non-negotiable pass-through delivery charges regulated by the Public Utility Commission of Texas (PUCT). Your regional TDU (such as Oncor, CenterPoint, AEP, or TNMP) owns the physical poles and wires, maintains grid infrastructure, and restores power during outages.
Because TDU delivery fees account for a substantial portion of your overall per-kWh rate, two households on the exact same retail plan can pay different effective rates depending on where they live in Texas.
Historical Price Drivers and Trends
Electricity prices in Texas fluctuate based on long-term structural shifts in the energy sector rather than daily retail changes:
- Natural Gas Dependency: A large portion of electricity generation in Texas relies on natural gas. When natural gas prices spike on global energy markets, wholesale power costs in Texas rise, eventually flowing through to residential contracts.
- Extreme Weather and Peak Demand: Hot summer heatwaves and winter cold snaps trigger sharp demand spikes. During periods of extreme grid stress, wholesale spot market prices rise, pushing retail providers to price future risk into long-term fixed rate offers.
- Renewable Energy Integration: Rapid expansion of utility-scale solar and utility battery storage across West and South Texas has added low-cost generation to the grid during peak afternoon hours.
- TDU Delivery Rate Adjustments: Delivery charges are reviewed and adjusted by regulators twice a year. As utilities invest heavily in grid resilience and weatherization, delivery fees have gradually risen over time.
Texas electricity prices follow strong seasonal demand patterns. During hot summer months and sudden winter freezes, air conditioning and heating push power consumption to record highs. Retail providers raise rates during high-demand seasons to hedge against wholesale price volatility. Conversely, mild spring and autumn shoulder months typically offer lower rates as overall grid demand drops.
A fixed-rate plan locks in your energy rate per kilowatt-hour for the entire duration of your contract (typically 12, 24, or 36 months). This protects you against price spikes caused by summer weather or volatile fuel markets. A variable-rate plan changes month-to-month based on wholesale market conditions. While variable plans offer flexibility with no early termination fees, costs can increase suddenly during peak demand periods.
Most Texas electricity plans use tiered pricing or bill credit structures that trigger only when you reach specific usage thresholds (such as 1,000 kWh or 2,000 kWh). If your usage falls above or below those exact benchmarks, your actual cost per kWh changes. Additionally, mandatory TDU delivery charges combine a monthly flat fee with a per-kWh charge, shifting your effective rate based on total monthly power consumption.
Your Transmission and Distribution Utility (TDU) depends entirely on your physical location in Texas. You cannot choose or change your TDU company, as each provider maintains the physical power lines in a designated region. Major TDUs include Oncor in Dallas/Fort Worth, CenterPoint Energy in the Houston metro area, AEP Texas in Central and West Texas, and Texas-New Mexico Power (TNMP).
If your contract ends and you do not renew it or switch to a new provider, your Retail Electric Provider will automatically move your account to a default variable month-to-month plan. Default variable rates are often substantially higher than fixed market rates, which can double your monthly bill during peak seasons.
Commercial and industrial power rates in Texas are almost always lower per kilowatt-hour than residential rates. Commercial operations consume higher volumes of power and maintain more predictable, off-peak usage patterns, allowing retail energy providers to purchase bulk power on wholesale markets at lower costs.