How Much Does Electricity Cost In Texas?

by | Jun 30, 2023 | Industry News

What Impacts Electricity Cost in Texas?

Why does Texas electricity cost the way it does? Find out why some utility rates are higher than others.
New to Texas and can’t make heads or tails of your power bill? Let us show you all about electricity cost to help you save more.

Your power bill may be a mystery to you. But it isn’t very complicated once you break it down. Texas electricity bills are made up of two parts – retail charges and utility charges. The company you choose for your power plan keeps the retail charges. After that, they pass the other charges along to your local transmission and distribution utility (TDU). Now, let’s dig deeper into these two charges. 

Utility Charges

TDUs incur costs for keeping up their local part of the Texas power grid that delivers power to customers. These costs differ among TDUs. This happens because of the different sizes and layout of their service territories. They also face different population densities and conditions of their infrastructure. As a result, utility rates aren’t the same across Texas. 

Here are a few examples to show why electric rates are not the same throughout Texas. Among other areas, Oncor serves the Dallas area. This utility currently charges $3.42 per month plus 3.5899 cents per kWh. On the other hand, Centerpoint in Houston charges $4.39 per month and 3.5620 cents per kWh. The Public Utility Commission regulates these charges so that Texans pay fair utility charges. The five TDUs covering most of Texas can change their rates twice a year. Locations outside their service areas receive power through city-owned utilities or electric co-operatives. 

Retail Charges and Electricity Cost

Retail electric providers buy wholesale power and sell it to homes and businesses. They offer contracts with various terms and provisions. People choose from among these plans based on the usage patterns they predict for themselves. Much like utility charges, most retail plans have base charges and prices per kWh. 

Sometimes plans have provisions including bill credits, tiered rates, and free time periods like nights and weekends. These other plans are the exception rather than the rule. Barring these special features, the utility charges plus the retail charges equal your monthly power bill. 

Shop Retail Electric Plans 

You have no say in utility charges. However, most Texans have the power to choose their retail electric providers. So you should always shop when your power contract runs out. This helps you to be sure you have the plan that best aligns with your usage pattern. 

And the best place to shop power plans is Here you’ll find all the terms and conditions for each plan. With that data and other resources at TER, you’ll be ready to make a good choice.

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