Energy Cost in Texas: What You're Actually Paying in 2026

A family in Dallas opens their August electric bill and sees something north of $200. The house is the same size it was last year. The thermostat is set the same way. But the bill is higher, and nobody told them their rate changed at the end of a contract they'd almost forgotten signing.

That scenario plays out across millions of Texas households every summer. As of August 2026, the median all-in energy cost in the Oncor/Dallas service area is roughly 15.9 cents per kWh at 1,000 kWh of monthly usage. The lowest all-in advertised rate across active plans is around 7.1 cents per kWh, with 108 plans competing for that bottom tier. The difference between median and low isn't rounding error. At 1,000 kWh a month, it's the difference between a bill that stings and one that doesn't.

For live, up-to-date comparisons in your specific area, browse Texas electricity plans at ElectricRates.org or run a search on Power to Choose, the state's official retail shopping site managed by the Public Utility Commission of Texas (PUCT).

Texas operates its own deregulated electricity market, which means most residential customers get to choose their electricity supplier. Retail Electric Providers (REPs) set prices and compete for your business. The wires delivering that electricity, however, belong to Transmission and Distribution Utilities (TDUs): Oncor in the Dallas-Fort Worth area, CenterPoint in Houston, AEP Texas in West Texas and the Coastal Bend, and TNMP in parts of West Texas and the Panhandle.

Here's the part most people miss: TDU delivery charges are embedded in every plan, no matter which REP you pick. They cover the physical cost of maintaining the grid, and they pass through to you on every bill. Those charges are set by the PUCT and are identical across all REPs in a given TDU territory. What REPs compete on is the energy supply portion, not the wires.

This is why two plans with the same advertised rate can produce different bills if one of those plans is in the Oncor territory and the other is in CenterPoint. Always compare plans within your actual TDU area.

Texas REPs frequently structure plans with different all-in rates at 500, 1,000, and 2,000 kWh per month. A plan might look cheap at 1,000 kWh and look expensive at 500 kWh, or vice versa. The PUCT requires REPs to disclose rates at all three tiers on the Electricity Facts Label (EFL), a standardized document every plan must publish.

When shopping, most Texans anchor on the 1,000 kWh rate because that's the figure prominently advertised. But if your house runs 650 kWh in the spring and 1,400 kWh in August, you could be paying a rate you never checked. Pull up the EFL before you sign anything. It will show you the all-in cost at each usage tier, including TDU delivery pass-throughs, so there are no surprises.

The PUCT's Power to Choose site lets you filter by usage level specifically for this reason. Use it.

High bills usually have one or more of these causes, and they're not all about the rate itself.

1. Summer AC load. Texas summers are long and brutal. A home that uses 900 kWh in April can easily use 1,800 kWh in July. If your plan has a rate structure that penalizes high-usage tiers, that doubling of consumption can more than double your bill.

2. Contract expiration and auto-renewal. Fixed-rate contracts typically run 12, 24, or 36 months. When a contract expires without the customer renewing, many REPs move the account to a variable-rate or month-to-month plan that can be significantly higher than the locked rate. Checking your EFL or calling your REP to confirm your current rate is a quick way to catch this.

3. TDU delivery fee increases. TDUs file periodic rate cases with the PUCT, and approved increases flow through to all customers in that territory regardless of which REP they use. These pass-through changes can nudge bills up even when the energy supply rate stays flat.

4. Inefficient appliances or HVAC. A failing air conditioning unit that runs longer to cool the same space can add hundreds of kWh per month without changing your thermostat setting. Sealing ductwork and scheduling an HVAC tune-up are among the highest-return actions a homeowner can take before peak summer.

The EFL is to Texas electricity what a nutrition label is to food. It's standardized, it's required, and most people skip it. That's a mistake.

Every REP operating in the deregulated Texas market must publish an EFL for each plan. The label shows the all-in average price at 500, 1,000, and 2,000 kWh per month, the energy charge component, the TDU delivery charge pass-through, and any recurring fees (base charges, minimum usage charges, bill credits that kick in only at certain thresholds). It also shows contract length and early termination fees.

When comparing two plans, put their EFLs side by side at the usage tier closest to your actual consumption. A plan with a lower 1,000 kWh rate but a high base charge might be more expensive if you're using 700 kWh. The math is in the EFL. It's the only document with authority over what a plan actually costs.

Shopping Texas electricity takes about twenty minutes and can save a noticeable amount on every monthly bill going forward. Here's a practical sequence.

Step 1: Know your TDU. Your current bill lists your TDU (Oncor, CenterPoint, AEP Texas, or TNMP). Every plan is priced within a TDU territory, so this is your starting filter.

Step 2: Pull your last 12 months of usage. Your REP or TDU's SmartMeter Texas portal shows monthly kWh consumption. Average it. This is your anchor for plan comparison.

Step 3: Visit powertochoose.org or ElectricRates.org. Filter by TDU area and enter your typical monthly usage. Sort by all-in price at that usage level.

Step 4: Read the EFL of any plan before enrolling. Confirm the contract length, termination fee, and any conditions attached to bill credits.

Step 5: Switch. Texas law gives residential customers the right to switch REPs without penalty at the end of a contract term. Switching takes effect within a billing cycle for most customers.

As of August 2026, the spread between median and low rates is wide enough that switching from an expired or variable-rate plan to a competitive fixed-rate plan is one of the fastest ways to reduce a household energy budget.

Fixed-rate plans lock your energy supply charge for the contract term, typically 12 to 36 months. Variable-rate plans float with wholesale market conditions and can change monthly. In Texas, where summer peak prices can spike sharply, fixed-rate plans have historically provided more predictable bills for most residential customers. That said, in mild-weather months with low wholesale prices, variable rates can temporarily dip below fixed-rate alternatives.

For most households managing a budget, a fixed-rate plan with a term that covers at least one full summer makes sense. Read the early termination clause carefully: fees vary from around $20 to well above $100 depending on the REP and contract length. If you move within the term, that fee may apply.

Beyond switching to a better plan, a handful of behaviors and investments have a real effect on monthly bills.

Thermostat discipline. Each degree cooler on a Texas summer day adds meaningful load. Setting the thermostat a few degrees higher when the house is empty (or using a programmable thermostat to do it automatically) trims peak consumption.

Time-of-use awareness. Some Texas plans charge more during peak grid demand hours, typically late afternoon on weekdays in summer. Running large appliances like dishwashers, dryers, and EV chargers overnight or on weekends can reduce costs on those plans.

Weatherization. Attic insulation, door sweeps, and window sealing reduce the load on HVAC systems. The Texas State Energy Conservation Office (SECO) maintains information on weatherization programs for qualifying households.

Monitor actual usage. SmartMeter Texas, the state's meter data portal, lets customers track daily and hourly usage at no cost. Catching an unusual spike early (often caused by a malfunctioning appliance or HVAC issue) prevents a surprise at the end of the month.

Texas's deregulated market is genuinely competitive, with over 100 active plans available in major service territories as of August 2026. The median all-in rate of roughly 15.9 cents per kWh in the Oncor/Dallas area and the floor of about 7.1 cents tell the story: being on the wrong plan is expensive, and shopping costs nothing.

The PUCT's Power to Choose site exists precisely to give every Texas resident a fair shot at the competitive market. The EFL exists to make plan comparisons honest. Using both tools, or starting with the comparison at ElectricRates.org, is the most direct path from a high bill to a lower one.

Rates shift with market conditions, contract cycles, and TDU filings. If it's been more than a year since you last compared plans, now is a reasonable time to look again.