Texas Electricity Rates (2025)

Types of Electricity Plans in Texas

Texas electricity companies offer more than 1,500 energy plans across the state, but most fall into six broad categories:

• Fixed-rate plans
• Variable-rate plans
• Green energy plans
• Bill credit plans
• Time-of-use plans
• No deposit or prepaid plans

Fixed-Rate Vs. Variable-Rate Plans

Just as it sounds, a fixed-rate plan allows you to secure a rate that will stay the same throughout your contract. Note that “fixed rate” does not mean your electric bill will be the same every month. Instead, it means the rate you pay per kWh of electricity won’t change. Your bills will increase and decrease in an amount commensurate with how you use electricity.

A variable rate means — you guessed it — the price you pay varies based on the whims of the deregulated energy market, including supply and demand. While variable-rate plans offer the flexibility to switch at any time without penalties, they also carry the risk of sudden price hikes — these usually happen in summer or winter, precisely when homes tend to use more electricity.

We saw the biggest risk of variable rates in the form of indexed-rate plans rapidly changing rates during Texas’s winter storm Uri in February 2021, when millions were in the dark due to a massive power outage.

Unlike regular variable rates, which change on a monthly basis, indexed-rate plans can change every few minutes based on the value of whatever market index to which the plan is tied. Texans who kept their lights on paid the price, with at least one customer facing an electric bill over $16,700. Three Texas power companies were reportedly overcharged $16 billion dollars by the electric grid operator.

Green Energy Plans in Texas

Green energy plans provide electricity generated from renewable sources — mainly wind and solar energy in Texas 4. Some retail electric providers (REPs) may also carry certifications like Green-e to verify that their electricity is produced, transmitted and distributed responsibly. In contrast, traditional plans typically contain less than 33% renewable energy in Texas 5.

Note that green energy plans can have either fixed or variable rates, although most are fixed. For predictable monthly bills, we recommend looking for fixed-rate options. Some green energy plans also include discounted electric vehicle (EV) charging schedules and solar buyback rates, ideal for homeowners using EVs or solar panels.

Bill Credit Plans in Texas

These plans offer a monthly bill credit if your electricity usage falls within a specified consumption range, typically above 1,000 or 2,000 kWh per month. If your usage is consistently within the eligible range, you can achieve effective rates as low as 10 to 13 cents per kWh.

However, if your usage falls outside the eligible range even once, you won’t receive the bill credit, and your rate can spike above 20 cents per kWh. We don’t usually recommend bill credit plans due to their unpredictable pricing.
Theoretically, these plans can help you save if your monthly consumption is stable and consistently within the eligible range. Unfortunately, this is not the case for most homes in Texas, where energy usage tends to vary drastically depending on the season.

Time-of-Use Plans in Texas

A time-of-use (TOU) plan promises discounted energy rates — or even free electricity — depending on the time of day. Specifically, these plans offer rate savings during off-peak hours, or times of low demand.
On the other hand, TOU plans charge excessively high energy charges during peak demand periods, with rates that often exceed 26 cents per kWh.

You can save on power bills with a TOU plan if you can shift your energy usage towards the off-peak hours, but this comes with major lifestyle changes that are impractical for most homeowners. Generally, our energy experts don’t recommend TOU plans due to the changing and excessively high rates they may levy.

No-Deposit or Prepaid Plans

A traditional electricity plan has a monthly billing cycle and may require a security deposit based on your credit record. A prepaid energy plan eliminates the monthly power bill, removing the need for a deposit or credit check:
You can prepay for electricity anytime, as long as you keep a positive balance.

The light company subtracts your daily usage from your account balance.
Since prepaid energy plans bill you ahead of time, they don’t require a security deposit like traditional options. Although you make an initial payment to establish service, it becomes a usable balance on your account. For this reason, prepaid electricity plans are also known as no-deposit plans.

Moving or Switching Providers in Texas

Whether you’re moving or you simply want to switch your current electricity provider, we recommend starting by comparing the electricity plans available in your area.

Our partners at Home Energy Club let you compare plans specifically for your ZIP code. You can filter plans by features, such as contract length and renewable energy content. Once you select a plan, you only need to provide your contact details and service address — Home Energy Club coordinates the process with your new electricity provider.

• Beware of any early termination fees (ETFs) if your contract hasn’t ended.
• Some ETFs are just $15 or $20 per month, while others range from $99 to $395 total.

You won’t owe an ETF if you’re moving.
Most electricity providers offer same-day service, but this can limit your options. You can usually find better deals if you shop for electricity plans in advance.

If you’re moving to Texas from out of state, you’ll be well served to set up your electricity service before your move-in date. Because deregulated energy can feel overwhelming, we suggest starting your search at least 30 days before your move.

Understanding Deregulated Energy in Texas

A deregulated energy market simply means that the companies that market and sell electricity plans compete with one another for your business. The power transmission and distribution companies are still regulated, but the retail electricity providers (REPs) are not. Texas deregulated its electricity market in 1999, giving most Texas homeowners the opportunity to shop around for a plan that works for them.

What’s the Difference Between Utility Companies and Electricity Provider Companies in Texas?

Electricity providers (REPs) purchase electricity on the wholesale market and sell it to customers at varying rates. While you can choose your light company, you don’t have a choice of utility company, called a transmission and distribution utility (TDU) in Texas. Instead, your utility will automatically be assigned to you based on where you live.
Unlike electric companies, which handle electricity sales to homes and businesses, utilities handle transmission and distribution.

In other words, utilities are responsible for delivering electricity to your home, regardless of your light company. Utilities are also responsible for electricity service reliability, restoring power outages and providing maintenance to the grid.
Your choice of light company will not affect the frequency of power outages that you may experience, since electric companies have no direct control over the grid. You must contact the local utility company to report power outages and other grid-related issues.

There are six TDUs in Texas, including:

• AEP Texas Central
• AEP Texas North
• CenterPoint
• Oncor
• Lubbock Power and Light (LP&L)
• Texas New Mexico Power (TNMP)

Oncor is the largest TDU by far, serving over 13 million customers in the Dallas-Fort Worth and surrounding areas. CenterPoint is the second largest, with around 2.9 million customers in the Greater Houston area. AEP Texas has around 1.1 million customers across its two business divisions, while TNMP has around 260,000 customers, and LP&L has around 108,000 customers.

Keep in mind that your utility will impact your Texas electricity rate, but not as much as your light company. Each utility has its own costs for delivering electricity, meter readings, wiring and more. You’ll pay these charges no matter which Texas energy plan or provider you choose, and they’ll be baked into the monthly bill from your energy company. All utility rates are regulated by the Public Utility Commission of Texas (PUCT).

Shopping for Energy Plans in Texas

When comparing electricity plans in Texas, here are some of the most important factors to keep in mind:

• Your energy usage: Electricity providers show their rates at three standard usage levels — 500 kWh, 1,000 kWh and 2,000 kWh. When comparing electricity plans, make sure you check the pricing tier that is closest to your monthly consumption.
• Contract length: Most Texas energy plans have contract terms of 12, 24 or 36 months. However, you can also find contracts as short as 3 to 6 months or as long as 60 months. Some providers offer small discounts if you choose their longer plan options.
• Customer reviews: Comparing electricity companies is just as important as comparing their rates. You can check their customer reviews on sites like Google, Trustpilot, Yelp or the Better Business Bureau (BBB). You can also check provider ratings from our partner Home Energy Club and the Public Utility Commission of Texas (PUCT).
• Renewable energy content: Most electricity plans in Texas contain less than 30% renewable energy, but you can find 100% green energy options. Some providers like Reliant, 4Change Energy and Veteran Energy let you upgrade any plan to 100% green energy for a small monthly fee. Other providers like Green Mountain Energy and Gexa Energy are exclusively dedicated to 100% renewable plans.
• Electricity facts label (EFL): The EFL of an electricity plan is like the nutrition label for food and beverages. This document contains a detailed breakdown of all charges, including base charges, energy charges and utility delivery fees. It also explains key details like the contract length, cancellation fee and green energy content. Reviewing the EFLs allows you to easily rule out plans with confusing rates and hidden fees.

EcoWatch Methodology for Rating Energy Providers in Texas

At Ecowatch, we take a sustainable approach to our best lists. We selected the best energy providers in Texas by examining a variety of different components of the energy providers’ business. We considered their renewable options or green plans as the most weighted component of our scoring.

We looked at the number of plan types available, the years of experience and what terms and contracts looked like at each company. Lastly, we reviewed the provider’s track record for delivering the service and customer service. We examined BBB ratings, looked into B Corp certifications and determined if it offered competitive and fair pricing.

These factors helped us decide which companies to recommend and which superlative to award.