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What's a fair electricity rate in Texas?

Texans hear a lot of horror stories about power prices. Here's the surprise: the average Texas home pays less per kWh than the average U.S. home. The real risk is the plan you're on. Here's what a fair price looks like right now, and a 60-second way to grade yours.

Published 8 min readBy The Day Company Editorial Team · How we verify figures
15.88¢ per kWhTexas average, July 2026
About 18.2¢U.S. average EIA expects in 2026
Short answer

The average Texas home paid 15.88¢ per kWh in July 2026, all-in, according to the U.S. Energy Information Administration. As a rule of thumb, under 13¢ is a great rate, 13 to 16¢ is fair, and over 16¢ is high. Judge your price by your total bill divided by your kWh, not an advertised energy-only rate. The lowest plain 12-month plan we've scored ran 12.2¢ in Houston.

15.88¢Texas average per kWh, July 2026
About 18.2¢U.S. average EIA expects for 2026
12.2¢Lowest plain plan we've scored, Houston
About 85%Of Texas customers can pick their plan

The 5 things to know

  • Texas homes averaged 15.88¢ per kWh in July 2026. That's all-in, from the U.S. Energy Information Administration.
  • That's below the U.S. average. EIA expects about 18.2¢ for U.S. homes in 2026.
  • Under 13¢ is great, 13 to 16¢ fair, over 16¢ high. That's our rule of thumb.
  • Part of your price is delivery. You can't shop it, but you can shop the energy part.
  • Compare plans at your real usage. The 1,000 kWh price alone can fool you.

Built on public data from the U.S. Energy Information Administration, ERCOT and current Electricity Facts Labels.

01 · The benchmark

What's the average electricity rate in Texas right now?

15.88¢ per kWh, all-in, for July 2026. That's the latest monthly figure from the U.S. Energy Information Administration, released September 24, 2026. It includes delivery, taxes and fees: your whole bill divided by the kWh you used. EIA’s next monthly update is due October 23, 2026.

Average price per kWh for homes: Texas vs. the U.S.
Texas, July 2026
15.88¢
U.S., 2026 (EIA forecast)
18.2¢

Bars start at zero. Texas is EIA's actual July 2026 average; the U.S. figure is the full-year 2026 average EIA expects in its Short-Term Energy Outlook.

So despite the headlines, the typical Texas price is lower than the national norm. Texas’s bad reputation comes from price spikes in extreme weather, explained in how ERCOT works, and from confusing plans. The fix for most people is picking a better plan, not moving states.

02 · The simple test

What's a fair electricity rate in Texas?

Use your all-in price per kWh. Here's our rule of thumb, built around the 15.88¢ Texas average.

Great: under 13¢You're beating the Texas average by about 3¢ or more per kWh.
Fair: 13 to 16¢Around the average. Worth a quick look when your contract ends.
High: over 16¢You're paying more than the average home. Time to shop.

These bands are The Day Company's guidance, not an official standard. Compare all-in prices: your total bill divided by your kWh.

03 · Inside your rate

Why isn't my rate just one number?

Your all-in price has two parts. Your electric company sets the energy charge, which you can shop. Your utility sets the delivery charge, which is the same with every company in your area.

The Texas average of 15.88¢, split for an Oncor-area home using 1,000 kWh
Delivery: you can't shop it
7.27¢
Energy, taxes and fees: you can
8.61¢

Example only: Oncor's $72.73 delivery charge at 1,000 kWh from October 4, 2026, spread over 1,000 kWh. Delivery differs by utility: see Oncor, CenterPoint and AEP Texas.

That's why two neighbors on different plans can pay very different prices, while two homes on the same plan in Dallas and Houston pay different delivery charges. Live in Austin or San Antonio? Your city utility sets the whole price, and you can't switch: see Austin Energy or CPS Energy.

04 · Plan types

Fixed, variable or indexed: which kind of rate?

The plan type decides whether your price can move. For most homes, a plain 12-month fixed plan is the easiest to budget and the fairest yardstick.

Texas electricity plan types compared
TypeHow the price worksBest for
FixedOne energy rate for the whole term. Pass-through costs like delivery can still change.Most homes
VariableCan change every month, usually with no cancel fee.Short stays
IndexedFollows a published price index. Wholesale-indexed plans have been banned for homes since September 1, 2021.Few homes
Free nights or weekendsThe energy charge is free in set hours and higher the rest of the time. Delivery is billed around the clock.Big night users

Go deeper with fixed or variable rate and are free nights plans worth it?

05 · Your usage matters

Why does the same plan show three different prices?

Every plan's Electricity Facts Label lists its average price at 500, 1,000 and 2,000 kWh. Fixed monthly charges get spread over more or fewer kWh, so the price per kWh moves with your usage.

One example plan, three usage levels (price per kWh)
500 kWh
19.9¢
1,000 kWh
18.9¢
2,000 kWh
18.4¢

An example, not a real plan: a $9.95 monthly base charge, 11¢ per kWh for energy and about 6.9¢ per kWh for delivery. Bars start at zero.

Power to Choose, the state's shopping site, sorts plans by the 1,000 kWh price unless you change it. If your home usually uses 1,500 kWh or 600 kWh, compare at the level closest to yours. Our plan cost calculator prices any plan at your exact usage.

06 · The fine print

Why is my rate higher than the one I was sold?

Two common reasons. Both hide in the fine print.

The ad left out deliveryEnergy-only prices

Some ads show only the energy charge. Delivery gets added on your bill, and in an Oncor-area home it's about 7¢ per kWh at 1,000 kWh. Always compare the all-in average price on the fact label.

A bill credit you didn't getThe usage window

Some plans advertise a low average that depends on a credit at one usage level, like exactly 1,000 kWh. Use less and the credit disappears. Test any plan with our bill-credit trap checker.

Learn to read every line in how to read an Electricity Facts Label.

07 · Real plans

How much can shopping actually save?

Real plain plans can beat the average by several cents. Here are two we checked for our company reviews, priced at 1,000 kWh in Houston.

Plain 12-month plans vs. the Texas average, Houston, 1,000 kWh
Gexa Eco Choice 12
12.2¢
Direct Energy Auto Pay Texas 12
14.6¢
Texas average, July 2026
15.88¢

Bars start at zero. Plan prices from fact labels dated September 17 and September 30, 2026; prices change often, so check the current label. Shown as examples, not recommendations.

What a lower rate saves you in a year, vs. the 15.88¢ average
Pay 15¢
$106
Pay 14¢
$226
Pay 13¢
$346
Pay 12.2¢
$442

Bars start at zero. Math for a home using 1,000 kWh a month, 12,000 kWh a year. Use more and you save more.

At 1,000 kWh a month, paying 12.2¢ instead of 15.88¢ works out to about $36.80 a month, or about $440 a year. See how each company scores on complaints and contract terms in our Gexa review, Direct Energy review and best electricity companies ranking.

08 · Free tool

Is my electricity rate fair? Grade it in 60 seconds

Type your bill total, or your price per kWh if you know it. You'll get a grade and the yearly gap against the Texas average.

Texas rate graderUse your last bill. Nothing is saved.
Type your bill total or your price per kWh

Your price per kWh is your total bill divided by the kWh you used. The Texas average is 15.88¢.

Grades use our rule of thumb (great under 13¢, fair 13 to 16¢, high over 16¢). The yearly gap compares your price with the Texas average of 15.88¢ at the kWh you type.

09 · Lock it in

How do I lock in a fair rate?

About 85% of Texas customers live where they can pick their plan. If you're one of them, these steps get you a fair price.

  1. 1
    Start on Power to Choose

    The state’s free site lists plans for your address. Our Power to Choose guide shows how to filter out the traps, and our company scores show whose record is cleanest.

  2. 2
    Pick a plain 12-month fixed plan

    One energy rate, no bill credits, no usage tiers. It's the easiest to compare and budget.

  3. 3
    Compare at your real usage

    Look at the fact label's price closest to your usual kWh, not just 1,000 kWh.

  4. 4
    Set a reminder before it ends

    When a contract expires, your rate can jump. You can switch with no cancel fee in the last 14 days. Worried about a deposit? See no-deposit electricity.

Why bills climb even on a fair rate: delivery charges rose in 2026, and they pass through on many plans. See why is my electric bill so high? and the average Texas bill.
10 · Quick answers

Texas electricity rate questions, answered

What is the average electricity rate in Texas?

The U.S. Energy Information Administration puts the Texas residential average at 15.88 cents per kWh for July 2026, released September 24, 2026. That's the all-in price, including delivery. Compare it with your total bill divided by the kWh you used.

Is electricity expensive in Texas compared to other states?

Not on average. Texas homes paid 15.88 cents per kWh in July 2026, while EIA expects the U.S. average to be about 18.2 cents for 2026. Texas's reputation comes from weather-driven price spikes and confusing plans, not a high typical price.

What is a good electricity rate in Texas?

Our rule of thumb against the 15.88-cent average: under about 13 cents per kWh all-in is great, 13 to 16 cents is fair, and over 16 cents is high. Compare all-in prices at your real usage, not an energy-only ad.

Why is my rate different from the advertised price?

Two common reasons. Some ads show only the energy charge and leave out delivery, which shows up on your bill. And some plans advertise a low average that depends on a bill credit at one usage level. The fact label at your usage shows the real price.

What's the difference between a fixed and a variable rate?

A fixed rate locks one energy price for the whole term, often 12 months, though pass-through costs like delivery can still change. A variable rate can go up or down every month. For most homes, a plain 12-month fixed plan is easier to budget.

Can I really shop my electricity rate in Texas?

If you live in a shopping area, yes, and about 85% of Texas customers do. You pick the electric company and plan, and your utility still delivers the power. Homes served by city utilities like Austin Energy and CPS Energy, or by most co-ops, can't switch.

What is an Electricity Facts Label?

It's the one-page price sheet every plan in Texas's shopping areas must publish. It shows the average price at 500, 1,000 and 2,000 kWh, plus the contract length and fees. Read the price closest to your own monthly use before you sign.

Why does the same plan show different prices at 500, 1,000 and 2,000 kWh?

Because fixed monthly charges and any bill credits spread differently across more or fewer kWh. A flat monthly fee makes low-use months look pricier per kWh, while a credit can make one usage level look cheaper. That's why you compare at your real usage.

What's the cheapest electricity rate in Texas?

It changes all the time. The lowest plain 12-month plan we've scored, Gexa Eco Choice 12, averaged 12.2 cents per kWh in Houston at 1,000 kWh on a label dated September 17, 2026. Check current fact labels on Power to Choose for live prices.

Does a lower rate always mean a lower bill?

No. A low rate built for high usage, or one with a bill credit you miss, can cost more than a slightly higher plain rate. Your bill is your rate times your usage plus fixed charges, so match the plan to how much you really use.

Up nextLock in a lower rate in five minutesHow to use Power to Choose, the state’s free site, and skip the plans that only look cheap. Read the guide
Sources

Sources and updates

Sources (9)
Changelog · last updated October 5, 2026 · 1 update
  • October 5, 2026: Guide published: the Texas average rate against the U.S., a fair-price test, what’s inside a rate, plan types, real scored plans and a rate grader.

How to cite this page: The Day Company, "What's a fair electricity rate in Texas?", updated October 4, 2026, https://theday.company/tx/electricity-rates.

The Texas average is the U.S. Energy Information Administration’s July 2026 figure; the U.S. figure is EIA’s forecast for all of 2026, so the two cover slightly different periods. Price bands are The Day Company’s rule of thumb, not an official standard. Plan prices are point-in-time examples from fact labels, not recommendations. The Day Company is not affiliated with any electric company named here.