What Is a Light Bill? Texas Electricity Bills Explained

The term comes from an era when electricity meant one thing above all else: keeping the lights on. The phrase stuck. Today a light bill is simply the monthly statement a household or business receives for its electricity service.

In Texas that statement comes from a Retail Electric Provider (REP), a licensed company that buys electricity on the wholesale market and sells it to consumers at a retail price. Texas deregulated most of its electricity market decades ago, which means residents in the competitive zones of the state choose their own REP rather than buying from a single government-assigned utility. The Public Utility Commission of Texas (PUCT) oversees the market and the REPs operating in it.

The amount printed on the bill reflects not just the power a household consumed but also a cluster of fees, taxes, and pass-through charges that arrive bundled into what most people simply read as their total due.

Cracking open a Texas electricity statement reveals several distinct line items, even when the REP presents them as a single per-kWh price.

Energy charge. This is the REP's core product: electricity measured in kilowatt-hours (kWh). The rate may be flat, tiered by usage level, or indexed to the wholesale market depending on the plan type.

TDU delivery charges. Texas uses a two-layer model. The REP sells the power; the local Transmission and Distribution Utility (TDU) physically delivers it over wires and meters. TDUs in the competitive market include Oncor (Dallas-Fort Worth), CenterPoint Energy (Houston), AEP Texas (parts of West and South Texas), and TNMP (smaller areas). Their delivery fees appear on every plan because they are pass-through costs set by the PUCT, not negotiated by the REP. Delivery charges typically include a flat monthly customer charge plus a per-kWh usage component.

Taxes and fees. State and local taxes, along with small state-mandated fees, round out the bill.

The cleanest way to compare what a plan actually costs is to look at the Electricity Facts Label (EFL), a standardized disclosure document every REP must publish. The EFL shows the all-in average price per kWh at three specific usage levels: 500, 1,000, and 2,000 kWh per month. Because delivery charges are fixed in part, the per-kWh all-in rate changes at each usage tier, so the 500 kWh column and the 2,000 kWh column on the same EFL can look very different.

The honest answer: it depends on the plan, the TDU territory, and how much electricity the household uses.

For a concrete reference point in the Oncor (Dallas) service area at 1,000 kWh per month, as of August 2026 the lowest all-in advertised rate across 123 active plans runs about 6.8 cents per kWh, and the median all-in rate sits around 15.9 cents per kWh. The spread is large. A household on the median plan pays more than twice what a household on the lowest-priced plan pays for the same usage.

Rates in other TDU territories, such as CenterPoint or AEP Texas, will differ because each TDU sets its own delivery fees. For live, territory-specific rates, visit ElectricRates.org's Texas electricity page or check powertochoose.org, the state's official shopping portal.

Month-to-month dollar amounts also swing with the season. Texas summers are punishing. A home that uses 800 kWh in March can easily use 1,800 kWh or more in July and August when air conditioning runs almost continuously. That usage spike hits the bill in two ways: more kWh consumed and, on some tiered plans, a higher per-kWh rate above a certain usage threshold.

Texas summers rank among the hottest in the country, and cooling a home accounts for a disproportionate share of residential electricity use. When outdoor temperatures climb into the upper 90s and triple digits, air conditioners run longer cycles and often struggle to keep up, drawing more power per hour in the process.

Beyond raw usage, some plan structures amplify the summer spike. Tiered or kWh-tier pricing is common in Texas plans: the rate per kWh may drop, stay flat, or jump once a household crosses a threshold such as 1,000 or 2,000 kWh in a month. A household that stays under 1,000 kWh all winter may cross 2,000 kWh in August, landing in a different pricing tier entirely.

Variable-rate plans add another layer of exposure. On a variable plan the REP can adjust the rate each month, and summer wholesale electricity prices in Texas tend to be higher due to peak demand on the grid managed by ERCOT (the Electric Reliability Council of Texas). Fixed-rate plans lock in a per-kWh energy rate for the contract term, which insulates the household from mid-summer rate hikes, though the fixed rate itself is typically priced to reflect some expected summer demand.

The EFL is a one-page standardized document the PUCT requires every REP to publish for every plan. Reading it correctly prevents the most common shopping mistake: comparing only the headline rate without accounting for delivery fees and usage tiers.

Step 1: Match your actual usage. Pull three to six months of past bills and note your average monthly kWh. If your home typically uses around 1,100 kWh, the 1,000 kWh column on the EFL is the most relevant comparison point.

Step 2: Check all three usage columns. Some plans are engineered to look attractive at exactly 1,000 kWh (a common benchmark on comparison sites) but are actually more expensive at the 500 or 2,000 kWh level. If your usage fluctuates seasonally, check all three columns.

Step 3: Identify contract length and early termination fees. The EFL discloses the contract term and any early termination fee, which matters if a household moves before the contract ends.

Step 4: Note the TDU delivery charge breakdown. Because delivery charges are pass-through costs, they appear on every plan within the same TDU territory at the same amount. The EFL separates them so a shopper can see exactly what portion of the all-in rate goes to the REP versus the TDU.

Powertochoose.org hosts EFLs for every plan a REP has posted on the site. ElectricRates.org aggregates live plan data as well, making side-by-side EFL comparisons faster.

Yes, and the two levers available are plan selection and consumption habits.

Plan selection is often the higher-impact lever. As the August 2026 data for Oncor territory shows, the gap between the cheapest active plan and the median plan is substantial. A household paying the median rate and switching to a plan near the bottom of the range could cut its electricity cost significantly without changing a single habit. Shopping is free, takes about fifteen minutes on ElectricRates.org or the state's Power to Choose portal, and can be done at any time. The PUCT gives Texas consumers the right to switch REPs, generally without a fee, when a contract expires.

Consumption habits compound the savings from a good plan. Practical steps that reduce kWh usage in Texas:

Raise the thermostat a few degrees when the home is unoccupied. Each degree matters when temperatures are extreme.

Use ceiling fans to allow a higher thermostat set point without losing comfort.

Replace air filters on schedule. A clogged filter makes an HVAC system work harder and longer.

Run major appliances, such as dishwashers and clothes dryers, during off-peak hours when possible, particularly on variable-rate or time-of-use plans.

Check attic insulation. Texas attics can reach temperatures that dramatically increase cooling loads; adequate insulation is one of the highest-return home improvements for electricity costs.

Power to Choose is the state-operated electricity shopping website maintained by the Public Utility Commission of Texas (PUCT). It lists the plans that PUCT-certified REPs choose to post there, displays the EFL for each posted plan, and allows consumers to filter by rate type, contract length, renewable content, and other criteria.

The site exists because the Texas Legislature, in opening the retail electricity market to competition, wanted consumers to have a single, neutral place to compare options. Using it costs nothing. Selecting a plan through it is binding in the same way as selecting directly through the REP's own website.

One nuance worth knowing: some REPs offer plans exclusively on their own sites or through brokers that do not appear on Power to Choose. Checking multiple sources, including third-party comparison sites like ElectricRates.org, gives a more complete picture of available options.

kWh (kilowatt-hour): The unit of electricity consumption. One kWh equals one kilowatt of power used for one hour. A standard window air conditioner running for roughly an hour uses about one kWh.

REP (Retail Electric Provider): The company that sells electricity to the consumer and issues the light bill.

TDU (Transmission and Distribution Utility): The company that owns and maintains the poles, wires, and meters. It delivers power but does not sell it in the competitive market. Oncor, CenterPoint, AEP Texas, and TNMP are the largest TDUs in deregulated Texas, joined by Lubbock Power & Light, whose customers gained retail electric choice in January 2024.

EFL (Electricity Facts Label): The standardized disclosure document, required by the PUCT, showing all-in rates at 500, 1,000, and 2,000 kWh usage levels.

Fixed-rate plan: A plan where the REP locks in the energy charge per kWh for a set contract period. Delivery fees can still change if the PUCT adjusts TDU rates.

Variable-rate plan: A plan where the REP can change the energy rate month to month. No early termination fee is typical, but summer rate spikes are a real risk.

ERCOT: The Electric Reliability Council of Texas, the grid operator that manages the flow of electricity across most of Texas. ERCOT does not sell power to consumers but its wholesale market conditions influence what REPs charge.