Midland Business Electricity Pricing
ElectricChoice Energy Research · Updated
- Midland is on the Oncor grid, same as Dallas. Same delivery and providers.
- Energy rates can run slightly higher in ERCOT’s West zone vs North Texas.
- Larger accounts get custom pricing. Comparing providers is free.
What Midland Businesses Pay for Electricity
Midland has a lot of motor-heavy businesses — machine shops, service yards, compressor facilities. Those loads draw reactive power that inflates your metered demand. But first, here is what the numbers look like across different business types.
| 5.1227¢ | Oncor delivery, per kWh | Same rate as Dallas, Fort Worth and every other Oncor city. Plus $6.70 a month. |
| kVA | How Oncor measures demand | Not kW. If your power factor is below 100%, your billed demand is higher than your actual working load. |
| 5.60–7.00¢ | Energy rate, Oncor West zone | The West zone occasionally prices a few tenths above the North zone due to transmission congestion in the Permian. |
| $12.97 | Distribution demand per kVA | Applied to your metered kVA, not kW. Every point of power factor correction lowers this charge. |
Power Factor and Why It Shows Up Here
Think of it like a draft beer. You pour a pint and you get some beer and some foam. The beer is the useful part — the real power that runs your equipment. The foam is reactive power — it fills the glass but does not quench your thirst. Your meter sees the whole glass.
What it looks like on a Midland bill
A machine shop drawing 70 kW of real load, at different power factors
| Power factor | Real load (kW) | Billed demand (kVA) | Distribution charge | Status |
|---|---|---|---|---|
| 98% | 70 | 71.4 | $926 | Corrected |
| 90% | 70 | 77.8 | $1,009 | Acceptable |
| 82% | 70 | 85.4 | $1,107 | Common uncorrected |
| 72% | 70 | 97.2 | $1,261 | Poor — welding shop range |
The real load is the same in every row. The equipment is doing the same work. The only thing changing is how much reactive power the motors pull, and Oncor charges for it. The gap between 98% and 72% is roughly $4,014 a year on a 70 kW shop. That is money a capacitor bank removes permanently.
What the Permian Basin Pays
Midland is not all oilfield services. There are restaurants, medical offices, retail stores and everything else a city of this size needs. But the motor-heavy operations are where the bills get big and where the most money is left on the table.
Estimated monthly bills by business type
AEP delivery + competitive energy rate, small commercial rate class
| Business | kWh/mo | Est. bill | All-in rate |
|---|---|---|---|
| Taco shop on Big Spring Street | 3,800 | $467 | 12.30¢ |
| Medical clinic on Loop 250 | 6,500 | $749 | 11.53¢ |
| Auto parts retailer | 5,200 | $601 | 11.55¢ |
| Machine shop off Garden City Highway | 22,000 | $2,366 | 10.75¢ |
| Oilfield equipment yard | 38,000 | $4,081 | 10.74¢ |
| Compressor service facility | 56,000 | $5,955 | 10.63¢ |
These are energy-only estimates using the small commercial volumetric rate. The demand-metered accounts (machine shop, equipment yard, compressor facility) would pay additional demand charges based on their peak kVA, which can add $500 to $2,000+ a month depending on the load and the power factor. Those charges are where the real opportunity sits.
Correcting It Is a Quick Fix
A capacitor bank does one thing: it generates reactive power locally so the grid does not have to deliver it. Your meter sees less kVAR, your kVA drops, and your demand charge drops with it. The equipment does not change. The work output does not change. The bill does.
Point-of-use correction
A capacitor wired directly to a large motor. Best for a shop with one or two big offenders. Cheap, simple, and the motor is corrected whether or not the rest of the building is. Typical cost: a few hundred dollars installed per motor.
Central bank at the main panel
A switched capacitor bank that adjusts automatically as motors come on and off. Best for a facility with many motors on variable schedules. More expensive up front but corrects the whole building at once. Typical cost: $2,000 to $8,000 depending on size.
Payback in Midland
At $12.97 per kVA of demand, reducing billed demand by even 15 kVA saves about $195 a month. A $3,000 central bank recovers its cost in roughly 15 months. Faster than almost any other capital improvement a Midland shop can make.
Do not overcorrect
A power factor above unity (leading) can cause voltage problems and is penalized by some utilities. Size the capacitor bank for your actual load, not for a theoretical target. An electrician who works with Permian Basin industrial accounts will know this. One who mainly does residential work may not.
Contract Length When Business Can Swing
Midland’s economy runs with the oil price. When crude drops, businesses shrink or shut down. A commercial electricity contract with a tight bandwidth and a 36-month term can become a liability if your usage falls sharply and you are locked into volume you no longer consume.
What it costs to break a commercial contract in Texas
If you locked at 6 cents and the market drops to 5 cents, the termination fee is roughly the difference times your remaining contracted volume. On a large Midland account with 18 months left, that can be five figures. Read the termination clause before you sign, and factor in the probability that your usage may change. A slightly higher rate with a wider band or a shorter term is often the cheaper bet.
New Service Can Be Slow Out Here
The Permian Basin has outgrown its electrical infrastructure more than once. During active periods, Oncor and its contractors are stretched thin, and new service requests, transformer installs and meter sets can take significantly longer in Midland and Odessa than in the Metroplex.
Start the Oncor application first
Before you sign the construction contract, before you commit to a move-in date. An Oncor new service request in the Permian can sit in queue for weeks before it is even assigned. Build that into your project timeline from day one.
Confirm transformer and panel capacity
If you are building out a space that was previously low-draw and you need 200 amps or more for motors and compressors, the existing transformer may not support it. An upgrade means a new transformer, and in a tight market those are not sitting on shelves. Ask Oncor about available capacity before committing to the space.
Plan for temporary power if needed
Temporary service through a generator or a portable power unit can bridge the gap between when your Midland build-out is ready and when Oncor energizes the meter. It is an extra cost, but it is less expensive than a month of lost revenue because the lights are not on.
Questions From Midland Business Owners
Who delivers electricity in Midland?
Oncor Electric Delivery. Midland is on the Oncor grid, same as Dallas and Fort Worth. The delivery rates are identical, set by the Public Utility Commission of Texas. For outages call Oncor at 1-888-313-4747. Midland is in the ERCOT West load zone for energy pricing, which sometimes differs from the North zone that covers the Metroplex.
Why does power factor matter for Midland businesses?
Because Midland has a disproportionate number of businesses running large electric motors — pump jacks, compressors, welding equipment, hydraulic systems. Motors draw reactive power that does not show up on a kWh meter but does show up on a kVA meter. Oncor bills demand-metered accounts in kVA, which means a bad power factor inflates your billed demand above your actual working load. A shop running 70 kW of real load at 78% power factor gets billed for about 90 kVA — nearly 30% more.
How do I fix my power factor?
Install capacitor banks at the motor or at the panel. For a single large motor a point-of-use capacitor is simplest. For a shop with many motors a bank at the main panel handles the building. The cost ranges from a few hundred dollars for a small installation to a few thousand for a full correction, and the payback at Midland demand charge levels is usually under a year.
How much does commercial electricity cost in Midland?
Oncor delivery is 5.1227 cents per kWh plus $6.70 a month on small accounts. Energy rates in the Oncor West zone are running 5.60 to 7.00 cents in October 2026. All-in, most Midland businesses land between 10 and 13 cents per kWh before demand charges. The demand charges on larger accounts are where the real money is.
Should I sign a long contract in Midland?
It depends on how tied your business is to the oil and gas cycle. If your revenue follows Permian Basin activity, a 36-month fixed contract at a good rate sounds great until production drops and you are paying a minimum take on volume you no longer use. Shorter terms or contracts with a generous bandwidth give you flexibility. If your business is stable regardless of oil prices — medical, retail, government — a longer term with a good rate is fine.
How long does it take to get new electrical service in Midland?
Longer than most Texas cities. The Permian Basin has strained infrastructure, and during boom periods Oncor and its contractors can be backed up on new service installations and upgrades. Plan months ahead rather than weeks. If you are building out a new commercial site, start the Oncor application as early in the project as possible and confirm transformer and panel capacity before committing to a tenant build-out.
Is the Oncor West zone more expensive than the North zone?
Sometimes, by a few tenths of a cent. The West zone has less generation capacity and more transmission congestion than the North zone, so during high-demand periods wholesale prices can spike higher. Suppliers price this into Midland contracts. The difference is usually small for fixed-rate contracts but can be material on index or pass-through pricing during a hot summer.
Oncor delivery charges from the PUCT monthly TDU rate report effective September 1, 2026. Power factor examples are modeled and illustrative. Energy rates reflect competitive offers in the Oncor West zone during October 2026. Related reading: Houston business electricity (CenterPoint kVA billing), Fort Worth business electricity (load factor), Texas commercial electricity.
