Best Electric Rates in Texas (August 2026)

A family in Plano and a family in Austin can be billed by two completely different companies for electricity delivered over the exact same wires. That is not a bug in the Texas system. It is the design.

Texas runs the most competitive retail electricity market in the United States. The Public Utility Commission of Texas (PUCT) oversees the market, but it does not set a standard residential rate. Instead, hundreds of Retail Electric Providers (REPs) compete to sell electricity plans directly to homes and businesses. The physical wires and poles belong to a separate company called a Transmission and Distribution Utility (TDU). Four TDUs serve the competitive market: Oncor (Dallas-Fort Worth), CenterPoint Energy (Houston), AEP Texas (West and South Texas), and TNMP (parts of North and West Texas).

Every plan from every REP includes a pass-through delivery charge from the local TDU. That fee is the same regardless of which REP you pick, because your REP cannot change who owns the wires. What REPs compete on is everything else: the energy charge, contract length, renewable content, and any bill credits or perks they layer on top.

The practical upside: you can switch providers without anyone touching your meter or interrupting your power. The practical challenge: comparing plans requires reading beyond the headline rate.

As of August 2026, the Oncor/Dallas area tells a wide story. The lowest all-in advertised rate across 124 active plans is approximately 7.1 cents per kWh at the 1,000 kWh usage tier. The median all-in rate is approximately 16.1 cents per kWh at the same tier. That gap, more than nine cents between the cheapest advertised plan and the midpoint of the market, is unusually large and reflects just how much plan structure varies.

A few important caveats about those numbers. First, they are specific to the Oncor territory and the 1,000 kWh usage level. Rates shift in the CenterPoint, AEP Texas, and TNMP territories because TDU delivery fees differ by territory. Second, a plan's all-in rate also changes at different usage levels. Texas REPs are required to disclose rates at 500, 1,000, and 2,000 kWh on the Electricity Facts Label (EFL), and a plan that looks cheapest at 1,000 kWh can look very different at 500 or 2,000. Third, advertised rates apply to fixed-rate contract plans. Variable-rate plans fluctuate monthly and carry no such guarantee.

For live rates in your specific TDU territory, see our Texas electricity comparison page or visit powertochoose.org, the PUCT's official shopping site.

The Electricity Facts Label is the document that makes Texas electricity shopping actually comparable. Every REP is required by the PUCT to publish an EFL for every plan they offer. Think of it as a nutrition label for electricity.

The EFL shows the average price per kWh at 500, 1,000, and 2,000 kWh per month. Those three numbers matter because many plans include a bill credit that only kicks in if you use at least 1,000 kWh. A household that uses 900 kWh misses the credit, and the effective rate spikes. An EFL will show that clearly if you look at the 500 kWh column.

The EFL also discloses the contract term and early termination fee, the renewable energy content, and the specific TDU pass-through charges included in the rate. If a REP is advertising 7.1 cents but the EFL shows that rate only applies at 2,000 kWh and jumps to 14 cents at 1,000 kWh, that is your signal to keep scrolling.

Before signing any plan, download the EFL for that plan and find the kWh tier closest to your typical monthly usage. That number is your real rate.

The most direct path runs through two tools used together.

Step 1: Pull your usage history. Log into your TDU's portal or your current REP's account page and find your average monthly kWh for the last 12 months. Texas summers push usage well above winter months, so a single month's bill can mislead. Your 12-month average is the right benchmark.

Step 2: Shop on Power to Choose. Powertochoose.org is the PUCT's official comparison site. Enter your zip code and set the usage filter to match your actual average. The site will display plans sorted by price. You can filter by contract length, renewable content, and plan type.

Step 3: Read the EFL before you click Enroll. Once you find a plan that looks competitive, download its EFL. Confirm the all-in rate at your usage level, check the early termination fee, and note whether any bill credit has a usage threshold. Some plans credit you $50 if you use between 1,000 and 2,000 kWh, which effectively lowers the rate for high-usage homes but does nothing for a smaller household.

Step 4: Compare at least three plans. The lowest advertised number is not always the lowest real bill. Two plans within a cent of each other can diverge significantly once you account for base charges, credit thresholds, and contract length.

You can also compare plans at ElectricRates.org's Texas page, which aggregates live offers and lets you filter by territory.

Fixed-rate plans lock in your energy charge for the contract term, typically 6, 12, or 24 months. The TDU delivery portion can still change if the PUCT approves a tariff adjustment, but the REP's energy charge stays constant. For most households, a fixed-rate plan is the lower-risk choice because Texas wholesale electricity prices swing sharply during summer heat events and winter freezes.

Variable-rate plans have no contract term and no early termination fee. The REP sets the rate each month based on market conditions. When wholesale prices are low, variable plans can undercut fixed plans noticeably. When prices spike, bills can surge. The February 2021 winter storm is the most extreme example of that risk in recent Texas history, though the PUCT has made subsequent market rule changes since then.

A practical middle path for some households is a short fixed-rate contract (6 months) that lets them re-shop seasonally without a long commitment. Whether that strategy beats a 12-month lock depends on market timing, which is genuinely hard to predict.

If you prefer simplicity and predictability, a 12-month fixed plan at a competitive rate is usually the right default.

Because TDU delivery fees are baked into every plan's all-in rate, your location determines a floor you cannot negotiate away. Oncor, CenterPoint, AEP Texas, and TNMP each file their own delivery tariffs with the PUCT, and those tariffs differ.

In practical terms, two plans from the same REP with the same energy charge will have different all-in rates in Dallas versus Houston because the TDU delivery component differs. That is why comparing rates across territories using a single statewide number produces noise rather than insight.

Always shop with your zip code entered correctly on Power to Choose or on comparison sites like ElectricRates.org. The plans displayed will automatically reflect your local TDU's delivery charges. If you are moving between TDU territories, your old rate is not portable. You will need to enroll in a new plan under the new territory's available REPs.

The PUCT publishes TDU tariff schedules on its website for anyone who wants to see the delivery fee breakdown in detail.

Yes, and it is one of the clearest consumer protections in the Texas system.

Switching REPs in Texas does not interrupt your electricity service. Your TDU continues delivering power through the same wires the whole time. What changes is who bills you for the energy portion and who you call for billing questions. A standard switch typically takes one to two billing cycles to process.

If you are under a fixed-rate contract, check the early termination fee on your current EFL before switching. Fees vary by REP and plan, and for some contracts, paying the fee and moving to a lower rate still saves money over the remaining contract term. That math is worth doing, especially if you have more than six months left on a high-rate plan.

If your REP goes out of business or loses its license, the PUCT assigns affected customers to a Provider of Last Resort (POLR). POLR rates are not designed to be competitive. They exist as a backstop so customers are never left without service, but the expectation is that customers will shop for a permanent plan quickly.

There is no penalty for switching at contract end, and there is no waiting period before you can switch again.

Locking in a competitive rate is the highest-leverage single action most Texas households can take. But a few other moves stack on top of it.

Match your plan to your usage pattern. If your household consistently uses more than 1,500 kWh per month in summer, look at plans with bill credits structured for high-usage tiers. If you use under 800 kWh, find a plan with a low base charge and no credit threshold that you will miss anyway.

Set a calendar reminder to re-shop. Most fixed-rate contracts auto-renew or roll onto a month-to-month variable rate when they expire. Rates change, and the plan that was competitive 12 months ago may not be now. Put a reminder 45 days before your contract end date so you have time to compare without pressure.

Check time-of-use plans if your habits allow it. Some REPs offer plans with lower rates during off-peak hours (typically overnight). If you run a dishwasher, dryer, or EV charger on a timer, those plans can reduce your effective rate meaningfully.

Verify renewable content if it matters to you. The EFL discloses what percentage of a plan's electricity comes from renewable sources. Some 100 percent renewable plans are priced competitively; others carry a premium. The EFL is the only document that tells you the actual percentage rather than the marketing copy on a plan landing page.

Two resources cover the full market.

Powertochoose.org is operated by the PUCT and lists every plan from every licensed REP in the state. It is the authoritative source and the right place to confirm what is available in your zip code.

ElectricRates.org's Texas page aggregates live offers and updates rates regularly so you can filter by territory and usage level without entering your zip into multiple screens.

As of August 2026, the spread between the lowest and median advertised rates in the Oncor territory alone is over nine cents per kWh. At 1,000 kWh per month, that is a difference of more than $90 on a single bill. Across a year, a household sitting at the median rate while a lower rate was available could be spending over a thousand dollars more than necessary. That math makes the 20 minutes it takes to read three EFLs a reasonable investment.