Quick Answer
Enter two Texas ZIP codes and get different rates for the same plan. Here is why your neighbor across town might pay more or less than you for identical electricity.
Same Plan, Different Price
Search for electricity rates in Houston ZIP 77002 and Dallas ZIP 75201. Even for the same provider, the identical plan shows different prices.
This is not a glitch—it's how Texas electricity works.
Factors that create rate differences:
- TDU territory (biggest factor)
- Provider availability
- Wholesale price zones
- Usage credits and incentives
Understanding these helps you compare apples to apples when shopping.
TDU Territory Is the Biggest Factor
The primary reason rates differ by ZIP code is your TDU (Transmission and Distribution Utility). Each TDU has different regulated delivery charges baked into every rate.
Example base charges by TDU:
| TDU | Base Charge |
|---|---|
| Oncor (Dallas) | ~$3.42/month |
| CenterPoint (Houston) | ~$4.39/month |
| TNMP | ~$7.85/month |
These delivery charges add 3-5¢ per kWh to your rate. Same provider, different TDU = 1-2¢/kWh difference.
Provider Availability Varies
Not all electricity providers serve all Texas ZIP codes. Some focus on specific TDU territories or metro areas.
Provider availability varies widely:
| Location | Typical Providers |
|---|---|
| Houston (CenterPoint) | 50+ active providers |
| Rural West Texas (AEP) | 15-20 options |
More competition = lower prices. ZIP codes with fewer provider options often see higher rates simply because customers have less choice.
Wholesale Price Zones
ERCOT divides Texas into congestion zones that affect wholesale prices. When transmission lines get congested, prices in certain zones spike.
How different plan types handle this:
| Plan Type | Zone Impact |
|---|---|
| Fixed-rate | Absorbs zone differences |
| Indexed/variable | Reflects them directly |
Most residential customers on fixed plans won't notice this directly, but it influences the base rates providers offer in different areas.
Usage Credits and Incentives
Many Texas electricity plans include usage credits or tiered pricing that differs by territory.
Example: Same plan might offer:
- $50 bill credit at 1,000 kWh in one TDU
- $75 credit in another TDU
Providers calibrate incentives based on local competition. In highly competitive markets like Dallas, you see more aggressive credits. In less competitive areas, fewer incentives.
Result: Same plan name from the same provider can have meaningfully different effective rates depending on where you live.
What You Can and Cannot Control
| Cannot Control | Can Control |
|---|---|
| Your TDU (determined by address) | Which provider you choose |
| TDU delivery charges (regulated) | Which plan type fits your usage |
| Which providers serve your area | When you shop (seasonal variations) |
| Wholesale zone pricing | How much electricity you use |
Pro tip: When shopping, always enter your specific ZIP code to see rates actually available to you. Don't assume rates advertised for other areas apply to your location.
Frequently Asked Questions
Will moving to a different ZIP code change my electricity rate?
Why does my neighbor have cheaper electricity than me?
Do rates change within the same city?
How do I find the best rate for my specific ZIP code?
Looking for more? Explore all our Understanding Deregulation guides for more helpful resources.
About the author
Consumer Advocate
Brad has analyzed thousands of electricity plans since 2009. He understands how electricity pricing works, why some "low" rates end up costing more, and what to look for in an Electricity Facts Label. He writes to help people make sense of a confusing market.
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Topics covered
Sources & References
- Electric Reliability Council of Texas (ERCOT): "ERCOT congestion zones and pricing"Accessed Dec 2025
Last updated: December 31, 2025
