Updated • Reviewed by ElectricChoice.com's Editorial Team
Texas has a deregulated electricity market, meaning you have the power to choose your electricity provider. With 100+ retail providers competing for your business, comparing rates can save you hundreds of dollars per year. Here's everything you need to know about Texas electricity.
- Texas average electricity rate is 13.9¢/kWh - 14% below the national average
- Best fixed-rate plans currently start around 9.8-11.2¢/kWh
- 85% of Texans can choose from 100+ electricity providers
- Switching takes 1-3 days with no service interruption
- Lock in rates before summer when prices typically spike 20-40%
- Houston, Dallas, Austin & San Antonio residents have 50+ plan options each
- No deposit and no credit check plans available from many providers
Featured Electricity Plans
Top-rated electricity plans from major Texas cities. Rates shown at 1,000 kWh usage including all fees.
Rates updated January 2026 • Based on 1,000 kWh usage • Enter your zip code above for personalized rates
01How Texas Electricity Works
Texas deregulated its electricity market in 2002, giving residents in most areas the power to choose their retail electricity provider (REP). Unlike regulated states where a single utility controls everything, Texas separates the companies that generate and sell electricity from those that deliver it.
Retail Providers (REPs)
Companies like Reliant, TXU, Gexa, and 4Change compete for your business. They buy electricity wholesale and sell it to you at retail rates you choose.
TDUs (Utilities)
Transmission and Distribution Utilities like Oncor, CenterPoint, and AEP own the poles and wires. They deliver power regardless of which REP you choose.
ERCOT
The Electric Reliability Council of Texas (ERCOT) manages the grid, balancing supply and demand across 90% of Texas. It's independent from the national grid.
You Have the Power to Choose
Unlike 35 other states where you're stuck with one utility, Texans in deregulated areas can switch providers anytime. The average household saves $150-300/year by shopping for better rates.
How to Switch Electricity Providers in Texas
Switching Texas electricity providers is simple and takes just a few minutes. Thanks to the state's deregulated market, you have the legal right to change providers anytime. There's no service interruption - the same electricity flows through the same ERCOT-managed grid, you just pay a different retail electric provider (REP).
Check Your Current Texas Electricity Contract
Review your Electricity Facts Label (EFL) for your plan's end date and early termination fee. Most Texas REPs charge ETFs of $50-200. Under Texas law, you can switch penalty-free if your contract ends within 14 days.
Find Your Texas ESI ID
Locate your ESI ID (Electric Service Identifier) - a 17-22 digit number unique to your Texas meter. It's on your electricity bill, usually near your service address. You'll also need the name on the account exactly as it appears.
Compare Texas Electricity Plans
Enter your zip code to see plans available in your TDU territory (Oncor, CenterPoint, AEP, or TNMP). Compare rates at the 1,000 kWh level - Texas providers are required to show this rate on every EFL for easy comparison.
Enroll with Your New Texas Provider
Sign up online with your chosen REP (Gexa, TXU, Reliant, 4Change, etc.). Most Texas providers offer instant enrollment. Select your preferred start date - typically your next meter read date or a specific future date.
ERCOT Coordinates Your Switch
Your new provider submits a switch request to ERCOT, which coordinates with your TDU and notifies your old provider. Texas switches typically complete within 1-3 business days. You'll receive confirmation from both your old and new REP.
No Service Interruption When Switching Texas Providers
Switching electricity providers in Texas does not affect your power. The same electricity flows through the same wires managed by your TDU (Oncor in Dallas, CenterPoint in Houston, AEP in South Texas, or TNMP). Only the retail provider you pay changes. Your TDU continues reading your meter, maintaining lines, and responding to outages - regardless of which REP is on your bill. This is guaranteed under Texas electricity deregulation rules enforced by the Public Utility Commission of Texas (PUCT).
Texas Electricity Pricing
Texas electricity rates vary significantly based on your usage, location (TDU), and the plan you choose. The statewide average is 13.9¢/kWh, but savvy shoppers can find fixed rates as low as 11-12¢/kWh.
Rates by Customer Type
How Texas Compares
| Metric | Texas | U.S. Average | Difference |
|---|---|---|---|
| Residential Rate | 13.9¢/kWh | 16.2¢/kWh | 14% lower |
| Monthly Usage | 1,044 kWh | 903 kWh | 16% higher |
| Monthly Bill | $145 | $146 | About equal |
| Lowest Available Rate | ~11.2¢/kWh | N/A | Competitive market |
Summer Rates Are Coming
Texas electricity rates typically spike 20-40% during summer months (June-September) when AC demand peaks. Lock in a fixed-rate plan now before summer pricing kicks in. Variable rate plans can surge to 20¢+ per kWh during heat waves.
TDU Service Territories
Your TDU (Transmission and Distribution Utility) is determined by your address and cannot be changed. While you choose your retail provider, your TDU handles delivery, meters, and outages. TDU charges are passed through on your bill regardless of provider.
TDU Service Areas
Note: TDU boundaries are approximate and shown at the county level. Actual service territories may vary within counties. Some rural areas are served by electric cooperatives with no provider choice. Enter your zip code above to confirm your TDU and see available plans.
| TDU | Service Area | Customers | Avg Delivery Charge |
|---|---|---|---|
| Oncor | Dallas-Fort Worth, Waco, Midland, Tyler | 10+ million | ~4.1¢/kWh |
| CenterPoint | Houston metro | 2.8 million | ~4.5¢/kWh |
| AEP Texas Central | Corpus Christi, Laredo, Victoria | 1 million | ~4.8¢/kWh |
| AEP Texas North | Abilene, San Angelo, Wichita Falls | 300,000 | ~4.3¢/kWh |
| TNMP | Parts of Austin, Lewisville, Galveston | 250,000 | ~3.9¢/kWh |
Major City Electricity Rates
Rates vary by city based on which TDU serves the area. Here are current average rates and lowest available plans for major Texas cities.
Houston Metro
Houston's hot, humid climate means AC runs 8+ months per year. CenterPoint serves the metro area with generally reliable service. The competitive market offers many options, with rates starting around 11.4¢/kWh for 12-month fixed plans.
- Lock in fixed rates before summer - variable plans can spike to 18-20¢/kWh in August
- Look for plans with bill credits at 1,000 kWh usage tier for best effective rates
- CenterPoint outage map: Track outages here
Dallas-Fort Worth
DFW enjoys slightly lower TDU delivery charges than Houston, often resulting in lower total rates. Oncor is the largest TDU in Texas, serving the entire metroplex. The area has the most provider competition, driving competitive pricing.
- Oncor territory often has the lowest rates in Texas due to competition
- Winter can bring surprise usage spikes - many homes have electric heat
- Check provider reviews carefully - some discount providers have poor customer service
Texas Business Electricity
Texas businesses benefit from the same competitive market as residential customers. Small businesses can compare plans online, while large commercial and industrial users often work with brokers to negotiate custom contracts.
| Business Size | Typical Rate Range | Contract Terms | Best Approach |
|---|---|---|---|
| Small Business (<50 kW) | 9-12¢/kWh | 12-36 months fixed | Compare plans online |
| Medium Business (50-500 kW) | 7-10¢/kWh | 24-60 months | Work with energy broker |
| Large Commercial (500+ kW) | 5-8¢/kWh | 36-60 months | RFP to multiple providers |
| Industrial (1 MW+) | 4-7¢/kWh | Custom | Direct negotiation / PPA |
- Demand Charges: Businesses over 10 kW typically pay demand charges based on peak 15-minute usage. Managing demand can save 15-25% on bills.
- Time-of-Use: Many business plans offer lower rates during off-peak hours. Shifting operations to nights/weekends can significantly reduce costs.
- Renewable Options: Texas leads the nation in wind power. Many businesses lock in long-term PPAs for wind/solar at rates below retail.
Texas Prepaid Electricity
Prepaid electricity plans let you pay for electricity before you use it - similar to a prepaid phone. These plans are popular with renters, those with credit challenges, or anyone who wants more control over their electricity spending.
No Credit Check
Prepaid plans don't require a credit check or deposit. Approval is typically instant, making them ideal for those rebuilding credit or new to Texas.
No Long-Term Contract
Most prepaid plans are month-to-month with no early termination fees. Perfect for short-term leases, temporary housing, or if you're unsure how long you'll stay.
Daily Usage Alerts
Prepaid providers send daily texts or emails showing your balance and usage. This visibility helps you catch high-usage days before they become expensive surprises.
Budget Control
You can only spend what you load onto your account. This natural spending cap helps prevent unexpectedly high bills, especially useful during hot Texas summers.
Prepaid vs. Traditional Plans
| Feature | Prepaid Plans | Traditional Plans |
|---|---|---|
| Credit Check | None required | Usually required |
| Deposit | None | $50-400 (credit dependent) |
| Contract Length | None (pay as you go) | 12-36 months typical |
| Rate | 12-16¢/kWh typical | 10-14¢/kWh typical |
| Best For | Renters, credit rebuilding, short stays | Homeowners, long-term residents |
Prepaid Considerations
Prepaid rates are typically 2-4¢/kWh higher than traditional fixed-rate plans. If you have good credit and plan to stay 12+ months, a traditional plan usually saves money. However, if avoiding a deposit or credit check is important, the convenience of prepaid may outweigh the slightly higher rate.
Choosing the Right Plan
With dozens of providers and hundreds of plans available, choosing can be overwhelming. Here's how to find the best plan for your situation.
Fixed-Rate Plans
Lock in a rate for 12-36 months. Best for budget predictability. Rates currently range from 11-14¢/kWh. Ideal for most households.
Variable-Rate Plans
Rate changes monthly with market prices. Can be cheaper in mild months but risky in summer. Only for those who actively monitor rates.
Indexed Plans
Tied to wholesale prices plus a margin. Transparent but volatile. Best for large users who can shift usage based on real-time pricing.
Free Nights/Weekends
Free electricity during off-peak hours, higher rates during peak. Great if you can shift 40%+ of usage to free periods (EV charging, laundry).
Prepaid Plans
Pay as you go with no credit check or deposit. Rates are often higher, but good for those with credit issues or short-term stays.
Green Energy Plans
100% renewable energy at competitive rates. Texas wind power makes these surprisingly affordable - often within 1¢/kWh of conventional plans.
Watch Out For These Red Flags
Teaser rates that expire after 1-3 months. Usage credits that only apply at exact usage tiers. High base charges ($10+/month) that inflate low-usage bills. Cancellation fees over $150. Always read the Electricity Facts Label (EFL) before signing up.
Texas Electricity FAQs
In most of Texas, yes. About 85% of Texans live in deregulated areas served by Oncor, CenterPoint, AEP, or TNMP where you can choose from 100+ retail electricity providers. However, some areas remain regulated, including Austin (Austin Energy), San Antonio (CPS Energy), and most rural electric cooperatives. Enter your zip code above to see available plans in your area.
Switching is easy and usually takes 1-3 business days. Simply sign up with your new provider online or by phone. They handle the switch with your current provider and TDU. There's no service interruption - the same power flows through the same wires. Just make sure to check for early termination fees on your current plan before switching.
You won't lose power. If a provider fails, you're automatically transferred to a Provider of Last Resort (POLR) at a regulated rate. POLR rates are typically higher than competitive rates, so you should shop for a new provider immediately. The PUC of Texas maintains a list of certified providers.
Your TDU (Oncor, CenterPoint, etc.) owns the poles, wires, and meters. They deliver electricity to your home and respond to outages. Your retail provider (Reliant, TXU, Gexa, etc.) buys electricity wholesale and sells it to you. You choose your provider; you cannot choose your TDU. TDU delivery charges appear on your bill regardless of provider.
Texas summer electricity usage typically doubles or triples compared to spring/fall. Air conditioning accounts for 50-70% of summer bills. If you're on a variable rate plan, rates also spike in summer due to higher wholesale prices. To reduce summer bills: set thermostat to 78F when home, use ceiling fans, seal air leaks, and ensure your AC is properly maintained.
Report outages to your TDU, not your retail provider. Oncor: 888-313-4747 | CenterPoint: 800-332-7143 | AEP Texas: 866-223-8508 | TNMP: 888-866-7456. Each TDU also has an outage map and mobile app for tracking restoration progress.
ERCOT (Electric Reliability Council of Texas) is the independent organization that manages the Texas power grid. It doesn't sell electricity but coordinates the flow of power, manages wholesale markets, and ensures grid reliability. Texas operates its own grid separate from the rest of the US, which is why ERCOT manages 90% of Texas electric load.
Wholesale electricity prices in Texas have been relatively stable, but several factors could push rates higher: increased natural gas prices, grid reliability investments post-2021 winter storm, and growing demand from data centers and crypto mining. The best protection is locking in a 24-36 month fixed-rate plan at current rates before potential increases.