The Ultimate Guide to Texas Electricity Rates in 2026

My friend Mark moved from Austin to Dallas last year. He thought he had escaped the monopoly. He was wrong. He just traded one monopoly for another. In Dallas, he had a choice of providers. In Austin, he did not. He was confused. He called me. He asked “What is the cheapest rate?” I told him there is no single answer. It depends on his usage pattern. The Electric Bill Estimator can help you compare rates for your specific usage.

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Electric Bill Estimator

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This is the truth about Texas electricity rates. The state is divided into deregulated and regulated areas. In deregulated areas, you can choose your retail electricity provider. In regulated areas, you cannot. Austin, San Antonio, and parts of the Valley are regulated. Dallas, Houston, and most of the state are deregulated. The Time-of-Use Rate Comparator can help you decide between fixed and variable rates.

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Time-of-Use Rate Comparator

Enter your hourly usage pattern — see whether a TOU plan saves or costs you money.

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In 2026, the average Texas residential rate is 16.56¢ per kilowatt-hour. That is higher than the national average of 15.2¢. Texas used to be cheaper. Not anymore. The February 2021 freeze caused billions in damages. The grid is being hardened. Someone has to pay. That someone is you. The Appliance Cost Calculator can help you reduce your usage so rate hikes hurt less.

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Appliance Cost Calculator

Estimate annual cost for each appliance — find your biggest energy hogs.

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Mark signed up for a 12-month fixed-rate plan at 14¢/kWh. He thought he had a good deal. He did not read the fine print. The plan had a base charge of $20 a month. His usage was low in spring and fall. He paid $20 even when he used 200 kWh. His effective rate was 20¢. He was not happy. The Smart Thermostat Savings Estimator can help you smooth your usage year-round. Look at how to shop for electricity in Texas. Use PowerToChoose.org. It is the official site. Enter your zip code. It will show you plans from all providers. Sort by price. Ignore the ads at the top. They are paid placements. Scroll down. The Home Energy Score Calculator can help you predict your annual usage. Look for the Electricity Facts Label. It is like a nutrition label for power. It shows the price per kWh, the base charge, and the terms. Read it carefully. Some plans have a minimum usage fee. If you use less than 1,000 kWh, you pay a penalty. Some plans have a credit for usage over 1,000 kWh. The price per kWh is lower, but only if you use a lot. The Solar ROI Calculator can help you see if solar would be cheaper than any retail plan. Mark switched to a plan with no base charge and a flat rate of 15¢. His effective rate dropped to 15¢. He saved $20 a month. That equals $240 a year. He bought a smart thermostat with the savings. Check out the controversial part. Some retail providers offer free nights or free weekends. These plans look great. But the daytime rate is high. You need to shift your usage to the free hours. If you work from home, you cannot shift. You will pay more. I ran the numbers for Mark. His free nights plan would have cost him 30¢ during the day. He uses 60% of his power during the day. He would have paid more. He stayed with his flat rate. The Time-of-Use Rate Comparator is perfect for these plans. Run your hourly usage through it. It will tell you if a free nights plan saves you money. In 2026, Texas is seeing more extreme weather. Summer peaks are higher. Winter freezes are colder. ERCOT has issued several conservation appeals. The grid is stressed. Retail rates are volatile. If you are on a variable rate plan, your bill can spike. I have seen variable rates hit 50¢/kWh during peak events. That comes to insane. Avoid variable rates. Always choose fixed. My friend in Houston signed a 36-month fixed rate at 12¢ in 2023. He is still paying 12¢ while his neighbors pay 18¢. He is winning. Lock in a long-term fixed rate when prices are low. Here is your action plan for Texas electricity rates. To startfind your annual usage. Look at your last 12 bills. Calculate your average monthly kWh. Next upgo to PowerToChoose.org. Enter your zip code. Filter by fixed rate. Sort by price. Thenread the Electricity Facts Label for the top 5 plans. Look for base charges, minimum usage fees, and tiered pricing. Alsouse the Electric Bill Estimator to model your cost under each plan. Enter your monthly usage. See which plan is cheapest. Finallyif you have solar, check the buyback rate. Some providers offer 1:1 net metering. Most offer wholesale rates. Choose the best buyback rate if you export a lot. The monopoly does not want you to shop. They want you to stay with your current provider. They want you to pay high rates. Do not let them. Watt and Volt do not care about electricity rates. They care about the warm spot on the floor where the sun comes in. Mark is now paying 14¢/kWh. He is happy. His bill is $120 a month. He bought a Kill-A-Watt meter. He found his old fridge. He unplugged it. He saved another $20 a month. Texas rates are not fixed. You have power. Use it.

The Ultimate Guide to Texas Electricity Rates in 2026

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