Electricity Rates in Texas: What You'll Really Pay in 2026

Texas has some of the cheapest power in the country. It also has some of the most expensive. The difference between what you could pay and what you actually pay comes down to three things: when you shop, how you shop, and whether a light company will take you without a deposit.

This guide breaks down current Texas electricity rates, how the pricing actually works, and what to do if your credit is keeping you from getting the best deal.

What’s the Average Electricity Rate in Texas Right Now?

The average residential electricity rate in Texas sits around 14.5 to 16 cents per kWh as of early 2026, according to the U.S. Energy Information Administration (EIA). That’s slightly above the national average of about 16.6 cents per kWh, but Texas rates swing more depending on the season, your plan type, and where you live.

Here’s how rates actually break down in the Texas market:

Rate Range	What It Means	Who Gets It
8-10 cents/kWh	Excellent. Promotional or locked during spring/fall.	Great credit, 12+ month contract, high usage
10-13 cents/kWh	Good. Competitive fixed-rate territory.	Good credit, willing to commit to a contract
13-16 cents/kWh	Average. Where most Texans land.	Standard plans, moderate usage
16-19 cents/kWh	Above average. Prepaid and variable plan territory.	No credit check plans, month-to-month, variable
19+ cents/kWh	Too high. Time to switch.	Expired contracts, default rates, price gouging

Those 9-cent rates you see advertised online? They exist. But they come with requirements: solid credit, a 12-month commitment, and usually a usage sweet spot around 1,000 kWh per month. If you don’t meet those conditions, your actual rate will be higher.

For a deeper breakdown of what constitutes a good deal at every credit level, check out our guide on what a good electricity rate actually looks like in Texas.

How Texas Electricity Rates Actually Work

Texas electricity pricing isn’t just one number. Your rate is made up of several components, and understanding them is the difference between getting a good deal and getting played.

The Energy Charge (What You Can Shop For)

This is the part you control. When you compare light companies, you’re comparing their energy charge, the per-kWh price they charge for generating and selling you power. In the deregulated Texas market, dozens of companies compete for your business, which is why rates vary so much.

The energy charge typically makes up 50-65% of your total bill.

TDU Delivery Charges (What You Can’t Avoid)

TDU stands for Transmission and Distribution Utility. These are the companies that own the actual power lines and meters. You don’t get to choose your TDU. It’s assigned based on your address.

The five main TDUs in Texas:

• Oncor (Dallas/Fort Worth, much of North and West Texas)
• CenterPoint (Houston metro)
• AEP Texas (Corpus Christi, parts of South and West Texas)
• Texas-New Mexico Power (TNMP) (scattered areas across the state)
• Lubbock Power & Light (Lubbock area)

TDU charges add roughly 3 to 5 cents per kWh on top of your energy rate. CenterPoint and Oncor are the two biggest, serving the majority of Texas customers. Their delivery fees differ, which is why someone in Houston and someone in Dallas can be on the exact same plan but pay different total amounts.

When you see a rate advertised, check whether it includes TDU charges or not. Some companies advertise the energy-only rate (looks cheaper). Others show the all-in rate (more honest). The Electricity Facts Label (EFL) always shows the total average price at 500, 1,000, and 2,000 kWh usage levels. That’s the number to compare. Learn how to read an EFL so you never get tricked by misleading rate ads.

Fees That Sneak Onto Your Bill

Beyond energy and delivery charges, watch for:

• Base charges: A flat monthly fee ($5-$10) regardless of usage
• Minimum usage fees: Extra charges if you use less than a certain amount (common at the 1,000 kWh threshold)
• Early termination fees: $50-$300 if you break a fixed-rate contract
• Late payment fees: Usually $10-$25

These fees can turn what looks like a cheap rate into an expensive plan. A plan at 10 cents with a $10 base charge and a minimum usage fee costs more than a flat 12-cent plan with no fees if your usage is moderate.

Fixed Rate vs. Variable Rate vs. Prepaid: What the Rate Types Mean for Your Bill

Not all rates work the same way. The type of plan changes everything about what you’ll actually pay.

Fixed-Rate Plans

Your per-kWh price is locked for the length of your contract (6, 12, 24, or 36 months). August rates are the same as March rates. Wholesale prices spike? Doesn’t affect you. Wholesale prices drop? Also doesn’t affect you.

Best for: People who want predictable costs, plan to stay at the same address for the contract length, and can pass a credit check.

Typical rate range: 10-15 cents/kWh (varies by season signed and contract length)

Variable-Rate Plans

Your per-kWh price can change every month. Some plans track wholesale market prices. Others let the company set whatever rate they want with a billing cycle’s notice.

Best for: Short-term situations where you need flexibility. Also used by people between fixed-rate contracts.

Typical rate range: 9-22 cents/kWh (swings wildly by season)

The risk: A mild spring month at 10 cents can turn into a brutal August at 20+ cents. We’ve seen variable rates hit 25 cents during heat waves.

For a full comparison of how these two plan types affect your wallet, read fixed vs. variable rate plans explained.

Prepaid / Pay-As-You-Go Plans

No contract. No credit check. No deposit. You load money onto your account and use it until the balance runs out. Rates are typically higher (15-19 cents/kWh) because the light company takes on more risk.

Best for: Anyone who needs lights on fast, can’t pass a credit check, or wants zero commitment.

Typical rate range: 15-19 cents/kWh

The startup cost ($40-75 to get connected) is not a deposit. That money goes directly toward your usage. You’re prepaying for the power you’ll consume, not handing over a deposit you might never see again.

Learn exactly how the pay-as-you-go system works in our guide to prepaid lights.

When Are Electricity Rates Cheapest in Texas?

Texas electricity rates follow a predictable seasonal pattern driven by air conditioning demand. Understanding this cycle can save you hundreds of dollars a year.

The Seasonal Rate Calendar

Season	Months	Typical Fixed Rates	Why
Spring (Cheapest)	March - May	9-12 cents/kWh	Mild weather, low AC demand, companies compete hard for contracts
Early Summer	June	11-14 cents/kWh	Rates start climbing as summer approaches
Peak Summer (Most Expensive)	July - August	14-18 cents/kWh	AC demand peaks, wholesale prices spike, companies raise rates
Early Fall	September	12-15 cents/kWh	Still warm, rates begin dropping
Fall (Second Cheapest)	October - November	10-13 cents/kWh	Cooling demand drops, second-best shopping window
Winter	December - February	11-14 cents/kWh	Heating demand creates moderate prices

The best time to lock in a fixed rate: March through May. If your contract expires in summer, you’ll be shopping at the worst time. Try to time your contracts so they renew in spring.

The worst time to shop: July and August. You’re paying a premium because everyone’s AC is running full blast and wholesale power costs are elevated.

For a deep dive into seasonal patterns and how to time your switches, see our Texas seasonal rate patterns guide.

How Weather Events Affect Rates

Texas weather doesn’t just affect your bill through usage. Extreme weather can spike wholesale electricity prices, which eventually flows into retail rates.

• Summer heat waves push wholesale prices to their highest levels. This hits variable-rate customers immediately and shows up in fixed rates for new contracts.
• Winter storms (like the 2021 freeze and the 2025 cold snaps) can spike wholesale prices dramatically. Prepaid and variable-rate customers feel this first. If you want to protect yourself before the next freeze, our Texas winter storm electricity preparedness guide walks through what to do.
• Mild seasons drive rates down as demand drops. This is when the best deals appear.

How Texas Electricity Costs Compare to the Rest of the Country

Texas electricity rates are competitive nationally, but the comparison isn’t as straightforward as looking at one number.

National context (2026 data):

Metric	Texas	U.S. Average
Average residential rate	~15.2 cents/kWh	~16.6 cents/kWh
Lowest available competitive rate	~8 cents/kWh	Varies (most states aren’t deregulated)
Average monthly bill (1,000 kWh)	~$152	~$166

Texas benefits from a deregulated market where competition drives down energy charges. But here’s what the comparison misses: Texans use significantly more power than the national average, about 1,132 kWh per month compared to the national average of around 899 kWh. Higher usage is mostly due to the long, brutal Texas summers that keep ACs running 6+ months a year.

So while the per-kWh rate is lower, the total annual bill for a Texas household can be higher than the national average simply because of usage volume.

The Texas advantage: If you actively shop and compare rates, you can beat the averages by a wide margin. In regulated states, you’re stuck with whatever the utility charges. In Texas, competition gives you options.

The Texas risk: If you don’t shop, or if you’re on a default variable rate after your contract expires, you can end up paying 18-22 cents/kWh while your neighbor pays 11 cents for the same power.

7 Tips to Get the Cheapest Electricity Rate in Texas

1. Compare at the Right Usage Level

Most rate advertisements show the price at 1,000 kWh. If you use 500 kWh or 2,000 kWh, the rate can be very different due to base charges and usage credits. Always check the EFL price at the usage level closest to your actual consumption.

2. Shop in Spring or Fall

Lock in your fixed-rate contract during March through May or October through November. You’ll find rates 2-4 cents/kWh cheaper than summer shopping.

3. Read the Electricity Facts Label, Not the Ad

The EFL is the legally required disclosure. It shows the actual average price per kWh at three usage levels, including all recurring charges. The advertised rate is marketing. The EFL is truth.

4. Watch for Minimum Usage Fees

Some plans advertise 10 cents/kWh but have a minimum usage charge that kicks in below 1,000 kWh. If your home uses 700 kWh most months, that “cheap” plan gets expensive fast.

5. Set a Contract Renewal Reminder

Don’t let your contract expire without shopping. Most companies automatically move you to a variable rate (often 16-22 cents/kWh) when your contract ends. Set a phone reminder 2-3 weeks before your contract expires.

6. Look at Total Cost, Not Just the Rate

A plan at 11 cents with a $10/month base charge and a $200 early termination fee costs more over 12 months than a clean 12.5 cent plan with no fees, especially if you might move.

7. Check if You Can Avoid the Deposit

This is the one most people miss. If a light company quotes you a rate but then says you need a $200-$400 deposit, that “cheap rate” just got expensive. A 12-cent plan with a $300 deposit costs more in your first year than a 16-cent prepaid plan with no deposit.

What If Your Credit Keeps You From Getting the Best Rate?

This is where most rate comparison guides stop. They show you the cheapest rates, link to a comparison tool, and wish you luck. But if your credit score is below 600, or if you have thin credit history, those cheap fixed-rate plans come with a catch: a deposit.

The deposit problem in real numbers:

Scenario	Rate	Monthly Bill (1,000 kWh)	Deposit	Year 1 Total Cost
Great credit, fixed rate	11 cents	$110	$0	$1,320
OK credit, fixed rate + deposit	11 cents	$110	$300	$1,620
No credit check, prepaid	16 cents	$160	$0	$1,920

The person with no deposit pays $1,320/year. The person who had to put down $300 pays $1,620 in year one, and that’s assuming they get the deposit back (which requires 12 months of perfect payment history). The prepaid customer pays $1,920 but had zero upfront barrier.

How We Help: Finding $0 Deposit Traditional Plans

Every traditional light company in Texas runs a credit check. But here’s what most people don’t know: each company sets its own credit threshold. One might require a 650 score. Another accepts 580. A third might take you at 500 on a good day.

The problem? You don’t know which company will take you until you apply. And each application can feel like another rejection.

That’s where we come in. When you check plans through NoDepositLights, we can check with multiple light companies at once to see who will take you without a deposit. Instead of applying to company after company and getting quoted deposits each time, we find the ones that will work with your credit right now.

Many people who expect to pay a deposit end up qualifying for a $0 deposit traditional plan through this process. Not everyone qualifies, but many do. And it takes minutes instead of hours.

When Prepaid Makes More Sense

Sometimes prepaid is the better move, even if you could get a traditional plan. Pay-as-you-go makes sense when:

• You need lights today. Prepaid plans connect in hours, not days. If you’re sitting in a dark apartment, speed matters more than rate.
• You’re between situations. Short-term housing, uncertain timeline, don’t want a contract.
• You want total control. You see exactly what you spend every day. No surprise bill at the end of the month. No deposit sitting in a company’s bank account.
• You’re rebuilding. Start with prepaid, stabilize, then use the process above to move to a traditional plan when you’re ready.

The $40-75 you pay to start prepaid service is not a deposit. It goes straight to your usage. You’re paying for the power you’re about to use, not paying a penalty for your credit score.

See how prepaid and traditional plans compare side by side in our prepaid vs. traditional comparison.

Why Texas Rates Vary So Much by City

Even within Texas, rates differ significantly depending on where you live. Your city determines your TDU, and your TDU affects your total cost through delivery charges.

Rate ranges by major metro (early 2026, fixed-rate plans at 1,000 kWh):

• Houston (CenterPoint): 12-16 cents/kWh all-in. Largest market, most competition. CenterPoint delivery fees are moderate.
• Dallas/Fort Worth (Oncor): 11-15 cents/kWh all-in. Oncor territory has the most plan options in the state. Slightly lower delivery charges than CenterPoint.
• Corpus Christi (AEP Texas): 13-17 cents/kWh all-in. Fewer competitors, slightly higher delivery charges.
• Midland/Odessa (Oncor): 11-15 cents/kWh all-in. Same Oncor territory as DFW.

The more light companies that serve your area, the more competitive the rates. Houston and Dallas benefit from having 50+ companies competing for customers. Smaller TDU territories have fewer options and generally higher prices.

Your zip code determines everything. Two addresses 20 miles apart can be in different TDU territories with different rate options. Always start your rate comparison by entering your actual zip code, not just browsing state-wide averages.

How to Compare Texas Electricity Rates (Without Getting Scammed)

The Texas electricity market has 100+ light companies and hundreds of plans. Here’s how to navigate it without falling for tricks.

Step 1: Know Your Usage

Pull your last 12 months of usage from your current light company or your Smart Meter Texas account. You need to know whether you’re a 500 kWh household or a 1,500 kWh household because rates are structured differently at each level.

Step 2: Enter Your Zip Code

Your zip code determines your TDU, which affects delivery charges and which light companies serve your area. Not every company operates in every TDU territory.

Step 3: Compare All-In Rates at Your Usage Level

Don’t compare energy-only rates. Compare the total average price (energy + delivery + fees) at the usage level closest to your actual consumption. The EFL has this number.

Step 4: Check Contract Terms

A low rate with a 24-month contract and $300 early termination fee only makes sense if you’re sure you’ll stay for 2 years. If there’s any chance you’ll move, shorter contracts or no-contract plans might save you more overall.

Step 5: Ask About the Deposit

Before you celebrate finding a great rate, check whether you’ll need a deposit. If a company quotes you $200-$400 to start service, let us check if another company will take you at $0 down.

The Bottom Line on Texas Electricity Rates

Texas electricity rates in 2026 range from about 8 cents/kWh (best fixed-rate deals with good credit in spring) to 19+ cents/kWh (prepaid and variable plans in summer). The state average hovers around 15 cents.

The three things that affect your rate more than anything:

1. When you shop. Spring rates are 2-4 cents cheaper than summer rates.
2. What plan type you choose. Fixed, variable, and prepaid each have different rate ranges and tradeoffs.
3. Whether you need a deposit. A cheap rate plus a $300 deposit isn’t cheap anymore.

If you have good credit, shop in spring, lock in a fixed rate, and set a reminder to shop again before it expires.

If your credit is making it hard to get the best rates, start by checking whether we can find you a no-deposit traditional plan. Many people qualify when they didn’t expect to. And if traditional plans don’t work out right now, prepaid gets your lights on the same day with no credit check, no deposit, and no contract.

The best rate is the one that gets your lights on without draining your bank account on day one.

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Sources: U.S. Energy Information Administration (EIA) 2026 residential electricity data, ERCOT market reports, Public Utility Commission of Texas (PUCT) rate filings.