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Texans pay an average of ~13.5 cents/kWh — but your actual rate depends on where you live, which REP you chose, and which TDU delivers your power. In deregulated areas (~85% of the state), rates have climbed steadily despite the promise of competition. Municipal utilities like CPS Energy and Austin Energy often deliver lower rates without the REP shopping game.
~13.5¢
Avg Statewide Rate / kWh
200+
Retail Electric Providers
~85%
Of TX on ERCOT (Deregulated)
$152
Avg Monthly Bill (Statewide)
Texas has two fundamentally different electricity models running side by side. About 85% of the state is on ERCOT's deregulated grid where you choose a Retail Electric Provider (REP). The other 15% — major cities like San Antonio and Austin — use municipal utilities with a single provider and regulated rates.
~85% of Texas
~15% of Texas
The energy generation cost from your chosen Retail Electric Provider. This is the only part you control by shopping on PowerToChoose.org.
Transmission and distribution fee from your TDU (Oncor, CenterPoint, etc.). Fixed by PUCT — identical on every REP plan. This is where costs keep rising.
Monthly TDU base charge ($3-5), ERCOT system fees, renewable energy surcharges, and municipal franchise fees. Small but unavoidable.
Texas deregulation created competition for the supply charge — about 60 cents of every dollar you spend on electricity. The other 40 cents (TDU delivery) is a regulated monopoly with rising rates approved by the PUCT. Municipal utility customers in San Antonio and Austin often pay 20-30% less than deregulated customers in DFW and Houston — despite having no "choice."
Your electricity cost depends primarily on which TDU or municipal utility serves your area. Here is how the major Texas utilities compare in 2026.
| Utility | Territory | Type | Customers | Avg Rate | Avg Bill | Trend |
|---|---|---|---|---|---|---|
| Oncor | DFW Metro | Deregulated | 3.7M | $0.15/kWh | $160/mo | Rising |
| CenterPoint | Houston Metro | Deregulated | 2.7M | $0.16/kWh | $155/mo | Rising |
| AEP Texas | South / West TX | Deregulated | 1.1M | $0.14/kWh | $145/mo | Rising |
| TNMP | Scattered Areas | Deregulated | 0.3M | $0.14/kWh | $140/mo | Rising |
| CPS Energy | San Antonio | Municipal | 0.9M | $0.125/kWh | $150/mo | Stable |
| Austin Energy | Austin Metro | Municipal | 0.5M | $0.12/kWh | $140/mo | Stable |
Statewide averages tell one story, but the deregulated metro areas — DFW (Oncor) and Houston (CenterPoint) — have seen rates climb faster than the state average due to rising TDU delivery charges and ERCOT market costs.
| Year | TX Statewide Avg | Oncor (DFW) | CenterPoint (HOU) | YoY Change (State) |
|---|---|---|---|---|
| 2020 | 11.0¢/kWh | 11.0¢/kWh | 11.5¢/kWh | — |
| 2021 | 11.8¢/kWh | 11.8¢/kWh | 12.4¢/kWh | +7.3% |
| 2022 | 12.8¢/kWh | 13.2¢/kWh | 13.5¢/kWh | +8.5% |
| 2023 | 13.0¢/kWh | 14.1¢/kWh | 14.5¢/kWh | +1.6% |
| 2024 | 13.2¢/kWh | 14.5¢/kWh | 15.2¢/kWh | +1.5% |
| 2025 | 13.4¢/kWh | 14.8¢/kWh | 15.6¢/kWh | +1.5% |
| 2026CURRENT | 13.5¢/kWh | 15.0¢/kWh | 16.0¢/kWh | +0.7% |
At the current trajectory, the statewide average could reach 15-16 cents/kWh by 2030 with deregulated metro areas like DFW pushing 18+ cents/kWh. Over the next decade, the average Texas household could pay $5,000-$8,000 more in cumulative electricity costs compared to locking in today's rate with solar. ERCOT's new Performance Credit Mechanism adds additional upward pressure starting 2026-2027.
The promise of deregulation was lower prices through competition. The reality in 2026: Texans in deregulated areas often pay more than customers in regulated municipal utility territories. Here are the four forces driving rates higher.
Oncor, CenterPoint, and AEP Texas file rate cases with the PUCT every few years. Each approval means higher per-kWh delivery charges that pass through every REP plan identically. Since 2022, delivery charges are up 12-15% across all TDUs.
After the February 2021 freeze killed 246 people and caused $195 billion in damage, ERCOT and the Legislature mandated weatherization of power plants, gas wells, and transmission infrastructure. These billions in upgrades are now being passed to ratepayers.
ERCOT is transitioning from an energy-only market to a capacity market that pays generators to be available. The PUCT's Performance Credit Mechanism (PCM) could add $1-3 billion per year to wholesale costs starting 2026-2027.
Natural gas prices remain volatile. Meanwhile, Texas needs massive transmission buildout to connect West TX wind/solar to population centers. CREZ-2 (Competitive Renewable Energy Zone) transmission projects will add billions in ratepayer costs.
February 2021 exposed fundamental vulnerabilities in the Texas grid. The state legislature and PUCT mandated billions in weatherization upgrades — new gas plant insulation, winterized wind turbines, upgraded substations, and backup fuel supplies. These costs are spread across ratepayers over 20+ years. Every kWh you buy from the grid now carries a fraction of Uri's recovery cost. Solar panels on your roof are the only way to avoid paying for the grid's past failures.
PowerToChoose.org lists hundreds of REP plans. You spend hours comparing rates, switch providers, save a few dollars per month — and then your TDU files another rate case. Here is why switching REPs gives diminishing returns.
The math on REP switching: If you find a REP plan that saves you 2 cents/kWh on supply, that is about $20/month savings on typical TX usage (~1,000 kWh). But when your TDU raises delivery charges by 5% next year, you lose $4-5/month of those savings immediately. When your fixed-rate contract expires in 12-24 months, your new supply rate will be higher too. You are running on a treadmill that goes faster every year.
Three options compared honestly. Only one eliminates both supply AND delivery charges.
Lock in a fixed supply rate for 12-36 months through PowerToChoose.org. Protects against supply volatility but NOT delivery charge increases.
Only controls ~60% of your bill (the supply charge). TDU delivery charges — the other 40% — pass through every REP plan identically and keep rising. When your fixed term expires, your new rate will likely be higher. A temporary band-aid.
Smart thermostats, LED lighting, better insulation, high-SEER AC. Can cut usage 10-15% — but rates keep climbing against you.
Useful but limited. A 10% usage reduction saves about $15/month on a $150 bill. But when rates rise 3-5% annually, you lose those savings within 2-3 years. Efficiency + solar is the winning combo.
$0 down, fixed monthly payment that is lower than your current bill. Eliminates both supply AND delivery charges. Own the panels by year 5.
The only option that eliminates your entire electric bill — supply, delivery, and fees. Your Propel payment is fixed for 25 years while TDU delivery charges and REP supply rates climb around you. Available in TX with Silfab 440W American-made panels.
Learn About PropelSolar savings vary by your local utility rate. Higher rates mean faster payback. Here is what Propel solar looks like in each major Texas metro based on a system sized to your usage.
| Metro | Utility | Avg Electric Bill | Propel Payment | Monthly Savings |
|---|---|---|---|---|
| San Antonio | CPS Energy | $150/mo | $135/mo | $15/mo |
| Austin | Austin Energy | $140/mo | $126/mo | $14/mo |
| Dallas | Oncor | $160/mo | $144/mo | $16/mo |
| Houston | CenterPoint | $155/mo | $140/mo | $15/mo |
| Fort Worth | Oncor | $155/mo | $140/mo | $15/mo |
A third-party financing company owns the system initially and captures the 30% Section 48 commercial ITC — which homeowners can no longer claim since the residential 25D credit expired December 31, 2025. This ITC savings is passed through to you as a lower monthly payment. You take ownership around year 5. $0 down, fixed payment, American-made Silfab 440W panels.
Texas ranks in the top 5 states for solar irradiance. A typical 10 kW system produces 13,500-15,000 kWh per year — easily offsetting the average TX household usage of ~12,000 kWh/year. More sun = faster payback = lower effective cost per kWh over the system's 25-year lifespan.
TX rates have climbed 23% since 2020 and ERCOT's new capacity market will push them higher. Whether you are in Oncor, CenterPoint, or a municipal utility territory, Propel solar locks in a fixed monthly payment that is lower than your current bill. $0 down. Own the panels by year 5. No more REP shopping.
