What Is a Good Electricity Rate in Texas? (2026 Guide)

I get this question constantly: “Is 14 cents a good rate?” And my honest answer is always the same - it depends on your situation.

A rate that would make someone with perfect credit cringe might be a total win for someone who just dodged a $400 deposit. Context matters. So let me break down what rates actually look like in Texas right now, and what you should realistically expect based on your situation.

The 2026 Texas Rate Cheat Sheet

The state average in Texas hovers around 15.2¢/kWh according to EIA data. But that’s an average — competitive shoppers do better, and no-deposit customers typically pay more. Here’s how rates actually stack up:

Under 10¢/kWh - Excellent. These exist, but they’re unicorns. You’ll need solid credit, a 12-month contract minimum, and often 1,000+ kWh monthly usage to hit the sweet spot. Most people won’t qualify.

10-12¢/kWh - Good. This is what people with decent credit get when they shop around. Competitive, nothing to complain about.

12-15¢/kWh - Average. This is where most Texans land. It’s fine. You’re not getting ripped off, but you’re not getting a steal either.

15-18¢/kWh - High, but sometimes worth it. This is prepaid territory. More on that in a minute.

Over 18¢/kWh - Too high. If you’re paying this on a traditional plan, it’s time to switch. If you’re on prepaid and seeing rates above 18¢, shop around - there are better options.

Here’s What Nobody Tells You About “Good” Rates

Those 9¢ rates you see advertised? They come with strings.

Every traditional light company in Texas runs a credit check. If your score is under 600 (or you have thin credit history), you’re looking at a deposit. I’ve seen deposits anywhere from $150 to $500 depending on the company and your credit situation.

So that “amazing” 9¢ rate? It really costs 9¢ plus a $300 deposit upfront. For a lot of people, that deposit money doesn’t exist.

This is where prepaid plans flip the math.

The Prepaid Trade-Off (And Why It’s Often Worth It)

Prepaid plans run higher - usually 15-18¢/kWh. That’s just the reality. No credit check, no deposit, no long-term contract. You’re paying a premium for flexibility.

But here’s the thing: 16¢/kWh with zero deposit beats 11¢/kWh with a $300 deposit - at least in the short term.

Let me show you the math on a typical month:

Plan Type	Rate	1,000 kWh Bill	Deposit	Total First Month
Traditional (with deposit)	11¢	$110	$300	$410
Prepaid	16¢	$160	$0	$160

You’d need to stay on that traditional plan for 6+ months before the rate savings make up for the deposit. And that’s assuming you get the deposit back (spoiler: many people don’t, because life happens).

What Actually Affects Your Rate

Your per-kWh rate is only part of your light bill. Here’s what else matters:

Your TDU (the wire company). In Texas, you can’t pick who delivers your power. CenterPoint in Houston charges different delivery fees than Oncor in Dallas. These fees add 3-5¢/kWh to your total cost, and there’s nothing you can do about it.

Contract length. Longer contracts usually mean lower rates. A 24-month plan might be 2-3¢ cheaper than a month-to-month plan. The trade-off: you’re locked in, and early termination fees hurt.

Usage level. Some plans have tiered pricing. They advertise a low rate, but it only kicks in after you use 1,000 kWh. Use less than that, and you’re paying more per kWh than advertised.

When you sign up. Summer rates (June-August) tend to be higher because demand spikes. If you have flexibility, signing up in spring or fall often gets you better deals.

Credit history. This doesn’t affect the rate itself - it affects whether you’ll pay a deposit. Same 12¢ plan might be deposit-free for one person and $250 down for another.

How to Calculate Your REAL Rate

Light companies love to advertise low “energy charges” while burying the fees. Here’s how to see what you’re actually paying:

Look at your total bill amount
Find your total kWh used
Divide the bill by the kWh

That’s your all-in rate. If your bill was $180 and you used 1,200 kWh, you’re paying 15¢/kWh all-in — regardless of what the plan advertised.

Pro tip: Before signing up for any plan, check the EFL (Electricity Facts Label). Every Texas light company is required to provide one. It shows your estimated total at 500, 1,000, and 2,000 kWh usage levels. That’s where you’ll see the real cost, not the headline rate.

This matters because a plan advertising 10¢/kWh might have a $15 monthly fee that pushes your real rate to 13¢ if you’re a lower-usage household.

If You’re On Prepaid Right Now

Don’t obsess over the rate.

Seriously. Your real advantage isn’t getting the cheapest power in Texas. It’s:

No credit check when you signed up
No deposit sitting in some company’s account
No early termination fees if you need to leave
No surprise disconnection - you know exactly when you’re running low

You’re paying for control. That has value.

The long game: Pay your prepaid balance consistently for 12 months. That payment history actually helps your situation. After a year of on-time payments, you’ll have more options. Some light companies will waive deposits for customers who can show 12 months of consistent payment history with any provider.

So that 16¢ rate you’re paying now? Think of it as a 12-month investment in better options later.

What Rate Should YOU Expect?

If you have good credit (670+): Shop for 10-12¢ all-in. You have options. Use them.

If you have fair credit (580-669): You might dodge deposits with some companies but not others. Expect 11-14¢, potentially with a small deposit.

If you have challenged credit (under 580) or need to skip the deposit: Prepaid plans in the 15-18¢ range are your realistic target. Focus on finding reliable service with a transparent app that shows your balance clearly.

If you’re in a switch hold situation: You need to clear that first. Prepaid is often the only option that works immediately. Rate comparison is secondary to just getting your lights on.

The Bottom Line

A “good” rate is one that works for your actual situation - not some theoretical perfect scenario.

For some people, 10¢ is realistic and achievable. For others, 16¢ with no deposit is the win. Neither is wrong.

What matters: you’re not overpaying relative to your options. You understand what you’re getting. And you have a path to better rates down the road if you want it.

That’s what good looks like.

Related reading:

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We check multiple light companies to find you the best option. Many people qualify for traditional plans with $0 deposit. You always have prepaid as a guaranteed fallback.

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This guide is for informational purposes only and does not constitute legal or financial advice. For official rules, visit the Public Utility Commission of Texas. NoDepositLights.com is powered by Compare Power (PUCT License BR190020).