What does a small business actually pay for electricity in Texas? Between 4.8¢/kWh on Oncor’s territory and 5.4¢/kWh on AEP Texas — an average of 5.1¢/kWh across the 3 utilities serving the state.
That’s just the energy line. Demand charges, customer charges, and riders sit on top — the part most quotes leave out. This page breaks down the full picture and points you to where to shop.
Texas runs the most open commercial electricity market in the country. Your transmission and distribution utility (TDU) — Oncor, CenterPoint, or AEP Texas — delivers the power and files delivery tariffs with the PUCT, but every kilowatt-hour of supply gets sold competitively by a Retail Electric Provider. For a small business, that means two cost layers: a fixed delivery tariff (set by the TDU) and a market-priced energy contract you negotiate with a REP.
Commercial rate schedules look different from the residential one you might know. Three pieces show up on almost every small-business bill: a flat customer charge ($10-$50/month regardless of usage), an energy charge measured in cents per kWh, and — once you cross a size threshold — a demand charge measured in dollars per kW based on your single highest 15-minute usage spike during the billing month. The demand charge surprises new business owners more than anything else, because one bad afternoon of running every machine at once can spike a whole month’s bill.
Many Texas utilities also enforce time-of-use pricing for commercial customers above a certain demand level. Energy used during summer afternoon peaks (typically 2-7 PM on weekdays) costs more than energy used overnight or on weekends. For businesses with flexible schedules, shifting heavy loads to off-peak windows is one of the cleanest ways to cut a bill without changing suppliers.
Commercial energy rates are usually lower per kWh than residential rates — but the demand charge and customer charge can erase that headline savings if your business has spiky load. Here’s the comparison for each utility, using the most common small-business rate schedule (typically GS-1, G-1, or equivalent) versus the same utility’s residential rate.
| Utility | Small-business (energy) | Service area |
|---|---|---|
| Oncor | 4.8¢ | North, Central, and West Texas (Dallas-Fort Worth, Waco, Tyler, Midland) |
| CenterPoint | 5.1¢ | Greater Houston area and Gulf Coast |
| AEP Texas | 5.4¢ | South Texas (Corpus Christi, Laredo, Harlingen) and parts of West/North Texas (Abilene, Vernon) |
Energy rates shown reflect the most recent small-business tariff filing for each utility. Demand charges, customer charges, and riders are billed separately — see the per-utility page for the full structure. Residential rate is a Texas-wide average for comparison only.
Each utility files its own commercial tariffs with the Public Utility Commission of Texas (PUCT). Click through for the full list of small-business rate schedules, demand-charge thresholds, and a chart of how the rate has moved over time.
4.8¢/kWh small business
Largest TDU in Texas. Delivery-only tariffs; energy supply from a Texas REP.
View commercial tariffs →5.1¢/kWh small business
Houston-area TDU. Delivery-only; commercial supply comes from a Texas REP.
View commercial tariffs →5.4¢/kWh small business
Covers Central + North divisions. Two URDB filings, one combined tariff structure.
View commercial tariffs →If you’ve only ever shopped a residential plan, four things will feel new on a commercial tariff. Get clear on these before you compare quotes.
Once your business pulls more than 10 kW (in most Texas territories), the utility bills you on your single highest 15-minute usage spike during the month — not your average usage. A bakery that turns every oven on at 6 AM for one hour can pay for that peak all month long. Spreading load across the day cuts this bill more than any rate shopping.
Texas utilities push commercial customers onto time-of-use schedules above a size threshold (around 700 kW). That means summer-afternoon kWh cost 2-3× more than overnight kWh. Restaurants, manufacturing, and refrigeration-heavy businesses watch this number closely; office users mostly absorb it because their load matches the peak window anyway.
Beyond energy + demand + customer charge, commercial bills carry riders for transmission, ancillary services, renewable mandates, and utility recovery clauses. These can add 1.5-3¢/kWh on top of the headline energy rate and they’re often quoted separately in supplier offers. Always ask suppliers to quote all-in, not just the energy component.
Commercial REPs quote 12-, 24-, and 36-month fixed contracts and price each one against the forward power curve at quote time. A 36-month contract isn’t automatically cheaper — it just locks you in longer. Get quotes from three REPs on the same usage profile before signing.
Most Texas business owners also pay a residential bill at home. These tools and pages cover both sides.
Compare residential rates and switch suppliers at home.
Upload your bill, get a letter grade, and see how it compares. (Residential-focused, useful context for owner-operators.)
Line-by-line breakdown of every charge a Texas utility puts on a typical bill.
Rate data source: Tariff information on this page is compiled from the U.S. Utility Rate Database (URDB), maintained by the National Renewable Energy Laboratory. URDB aggregates publicly filed tariffs from state public utility commissions. For the source documents, see openei.org/wiki/Utility_Rate_Database . We sync URDB monthly and verify rate changes against each utility’s regulatory filings. Last updated June 9, 2026.