Texas Summer 2026 Electricity Rate Forecast

Picture a Friday afternoon in Dallas, 104 degrees, every air conditioner in North Texas running flat out, and ERCOT issuing a conservation notice. For households on a fixed-rate plan, that afternoon costs exactly what every other afternoon costs. For households on a variable or indexed plan, that same afternoon can show up on the bill as a number they did not see coming.

Summer in Texas is not a slow season for electricity markets. It is the season the entire grid is designed around, and understanding how wholesale pressure in ERCOT connects to what you actually pay is the most useful thing a Texas household can know heading into the hottest months of 2026.

ERCOT (Electric Reliability Council of Texas) runs a real-time wholesale market where prices clear every five minutes based on supply and demand. During mild spring mornings, that price can drop to almost nothing. During a summer peak, when demand strains available generation capacity, the market can hit the systemwide offer cap, which PUCT sets administratively.

Those wholesale swings matter to retail customers in two ways. First, variable-rate and indexed plans pass some or all of that wholesale volatility directly into monthly rates, so a scarcity event in August can inflate a household's bill well above what a fixed plan would have cost. Second, even fixed-rate plans reflect the wholesale market indirectly: Retail Electric Providers (REPs) buy power in advance to hedge fixed-rate offers, and when traders expect a hot summer, the cost of that hedge rises, pulling fixed-rate offers upward as well.

The practical takeaway is that the best time to shop for a fixed summer rate is before the market prices in the worst-case heat scenario, not after the first triple-digit weekend.

Across the Oncor service territory (Dallas-Fort Worth and surrounding areas), ElectricRates.org is tracking more than 130 active plans as of July 2026. The lowest all-in advertised rate sits at roughly 7.2 cents per kWh at 1,000 kWh monthly usage, and the median all-in rate is approximately 16.5 cents per kWh at the same usage level.

That spread, more than nine cents per kWh between the cheapest and the middle of the market, is the number that deserves attention. On a 1,000 kWh bill, the difference between landing at the low end versus the median is roughly $93 per month. Over a 12-month contract, that is real money.

A few caveats matter here. Rates differ meaningfully by TDU territory: CenterPoint (Houston), AEP Texas (West and Central Texas), and TNMP each carry their own delivery fees that get passed through on every plan, so a rate that looks attractive in Oncor territory may be structured differently elsewhere. Usage tier also matters. Texas REPs are required to disclose pricing at 500, 1,000, and 2,000 kWh on the Electricity Facts Label (EFL), and some plans are engineered with bill credits that only kick in at specific tiers, making them look cheaper at 1,000 kWh than they actually are at 800 kWh. Always read the EFL for your actual usage level.

For live, territory-specific rates, check our Texas electricity rate comparison page or visit powertochoose.org, the PUCT-run shopping site where every licensed REP must post its current offers.

ERCOT scarcity pricing is not hypothetical. The grid has faced tight reserve margins during extended heat waves, and PUCT has adjusted market rules multiple times in response to reliability concerns. For summer 2026, the relevant question for households is not whether wholesale prices will spike on some hot afternoons, because they almost certainly will, but rather whether those spikes will translate into bill shock.

For customers on fixed-rate plans, the answer is generally no. The REP absorbed the hedging cost when it priced the contract, and the customer's per-kWh rate does not change regardless of what happens in the real-time market on a given Tuesday in August.

For customers on variable-rate plans, the answer depends on the plan's specific terms. Some variable plans float with the monthly average wholesale price, which smooths out daily spikes but still rises during hot months. Others are indexed directly to real-time or day-ahead prices, which can produce dramatic month-to-month swings. The EFL will describe the pricing methodology; if the explanation is vague, that is a reason to choose a different plan.

Customers currently without a contract, or whose contract expires this summer, face the highest exposure. If a contract lapses and a customer does not actively re-enroll, they typically roll to the REP's month-to-month holdover rate, which is rarely competitive with the current market offers.

The case for a fixed-rate plan during a Texas summer is straightforward. Predictability has real value when you cannot control how hot July gets or how many 100-plus-degree days August delivers.

The case for a variable plan is harder to make in summer specifically. Variable plans can outperform fixed plans during mild weather when wholesale prices stay low, but Texas summers are not mild. ERCOT demand tends to peak in July and August, and the wholesale market responds accordingly. A variable plan that saved money in April and May can give back those savings and more in a single hot month.

Indexed plans sit somewhere in between. They offer a transparent formula (often real-time or day-ahead ERCOT price plus a fixed adder) that lets a customer see exactly how the rate is calculated, but they still expose the customer to wholesale price movements. They tend to attract customers who are comfortable watching market prices and adjusting usage accordingly, for example, pre-cooling a home in the morning before real-time prices rise in the afternoon.

For most households, a fixed-rate plan in the 12-month range is the lower-risk choice heading into summer 2026. The goal is to lock in before heat forecasts push REPs to reprice their offers upward.

Texas is one of the few states where residential customers have genuine, robust shopping rights. The PUCT established powertochoose.org specifically to ensure every licensed REP's offers are visible in one place. Here is a practical checklist for shopping this summer.

1. Pull your actual usage. Your TDU (Oncor, CenterPoint, AEP Texas, or TNMP) can provide 12 months of interval usage data. Knowing your real monthly kWh prevents you from being misled by a plan that looks cheap only at the 1,000 kWh tier when you actually use 750 kWh.

2. Compare all-in rates, not headline rates. The advertised cents-per-kWh figure sometimes excludes base charges or assumes a specific usage level. The EFL is the legal document every REP must provide; it shows the total average price at 500, 1,000, and 2,000 kWh, including all pass-through TDU delivery fees.

3. Check the contract term and early termination fee. A 6-month plan expiring in December is a different proposition than a 12-month plan expiring next July. The early termination fee tells you how much flexibility you are giving up.

4. Verify the REP's license. PUCT maintains a list of licensed REPs. Shopping through powertochoose.org or ElectricRates.org surfaces only licensed providers, but it is worth confirming if you find an offer elsewhere.

5. Act before the next heat event. REPs adjust offers in response to market conditions. When ERCOT issues a conservation notice or a heat wave is in the forecast, expect fixed-rate offers to reprice upward within days.

One piece of the Texas electricity bill that no amount of shopping can change is the TDU delivery fee. Oncor, CenterPoint, AEP Texas, and TNMP own and maintain the wires that physically deliver power to homes. They are regulated monopolies, and their fees are set by the PUCT, not by REPs.

Every retail plan in Texas passes these fees through to customers. They typically include a fixed monthly charge plus a per-kWh usage component. Because they are the same across every REP in a given territory, they do not affect the comparison between plans, but they do affect the total bill. A plan advertised at 7 cents per kWh in a territory with higher delivery fees will produce a higher total bill than the same advertised rate in a territory with lower delivery fees.

This is another reason the EFL matters. The all-in average price at 1,000 kWh shown on the EFL already incorporates the TDU pass-through, so comparing EFL figures across plans is an apples-to-apples exercise in a way that comparing headline rates is not.

A few indicators are worth tracking for Texas households over the coming months.

ERCOT weather forecasts and reserve margin notices. When ERCOT publishes tight reserve margin outlooks ahead of a heat wave, that signals the conditions under which real-time prices spike most dramatically. Customers on variable plans should pay particular attention.

Your current contract expiration date. If a contract expires in August or September, shopping now, before the market reprices into peak demand, is worth the hour it takes to compare plans.

PUCT proceedings. The commission periodically adjusts market rules, including the systemwide offer cap and ancillary service requirements, in ways that affect wholesale price dynamics. PUCT meeting schedules and filings are public record at puc.texas.gov.

For the most current plan-level rates across all Texas TDU territories, ElectricRates.org updates its comparison data continuously. The difference between the cheapest and median plans in the market as of July 2026 is wide enough that a single comparison session can pay for itself many times over before the summer ends.