Electricity Rates in Texas (2026)
National average: 16.72¢/kWh · Source: EIA, January 2026
Texas Has a Deregulated Electricity Market (and That Changes Everything)
Texas is one of the few states where most residents can choose their electricity provider. The Electric Reliability Council of Texas (ERCOT) operates the state's independent power grid, and retail electric providers (REPs) compete for your business. This means the 14.98 cent average shown here is just that, an average. Your actual rate depends entirely on which provider and plan you chose. Fixed-rate plans can lock in rates as low as 10-12 cents/kWh, while variable-rate plans can spike above 20 cents during peak summer demand. Shopping your electricity plan annually is one of the most impactful things a Texas resident can do to control costs.
Air Conditioning Dominates Texas Electricity Bills
Texas summers are long and hot. In cities like Houston, Dallas, and San Antonio, air conditioning can account for 50-60% of a household's annual electricity usage. The average Texas home uses about 1,100 kWh per month, which is roughly 25% more than the national average. Most of that difference is AC. A central air conditioner running 10-12 hours a day in July and August at Texas rates costs $50-$70 per month in electricity alone. This is why choosing an efficient HVAC system and maintaining it properly has a larger financial impact in Texas than in most other states.
Wind Power Is Reshaping the Texas Grid
Texas is the largest wind power producer in the United States by a wide margin, generating more wind electricity than the next three states combined. Wind now provides roughly 25-30% of ERCOT's total generation, and it has been a key factor in keeping wholesale electricity prices competitive. The growth of solar is accelerating too. For consumers, this means off-peak electricity (nights and weekends when wind output is highest) is increasingly cheap, making time-of-use plans attractive if you can shift heavy usage to those hours.
Calculate Any Appliance Cost in Texas
Most Expensive Appliances to Run in Texas
Monthly costs at 14.98¢/kWh using typical wattage and hours:
| Appliance | Watts | Hrs/Day | Monthly Cost |
|---|---|---|---|
| Tankless Water Heater | 27000W | 1h | $121.34 |
| Electric Furnace | 10000W | 8h | $359.52 |
| Electric Car Charger (Level 2) | 7200W | 4h | $129.43 |
| Hot Tub | 6000W | 4h | $107.86 |
| Clothes Dryer | 5000W | 1h | $22.47 |
| Electric Water Heater | 4500W | 3h | $60.67 |
| Garage Workshop Heater | 4000W | 4h | $71.9 |
| Central Air Conditioner | 3500W | 8h | $125.83 |
| Electric Oven | 2500W | 1h | $11.23 |
| Dishwasher | 1800W | 1h | $8.09 |
| Hair Dryer | 1800W | 0.15h | $1.21 |
| Electric Pressure Washer | 1800W | 0.5h | $4.04 |
| Space Heater | 1500W | 8h | $53.93 |
| Electric Baseboard Heater | 1500W | 8h | $53.93 |
| Infrared Heater | 1500W | 6h | $40.45 |
Tips for Reducing Your Electricity Bill in Texas
- Shop your electricity plan every year at powertochoose.org. Texans who switch plans save an average of $100-$300 per year compared to those who stay on default or expired plans.
- Lock in a fixed-rate plan before summer. Variable rates can double during July and August heat waves.
- Set your AC thermostat to 78 degrees when home. Every degree below 78 increases cooling costs by 6-8% in the Texas heat.
- If your plan offers free nights or weekends, shift laundry, dishwashing, and EV charging to those hours. These plans are only worth it if you actually shift usage.
- Consider a smart thermostat. Pre-cooling your home before peak afternoon hours (2-7 PM) and letting the temperature drift slightly during peak time can save $15-$30 per month in summer.
Frequently Asked Questions About Texas Electricity
The average Texas electricity bill is roughly $150-$170 per month, driven by high air conditioning usage in summer. Monthly bills vary dramatically by season: $80-$100 in winter and spring, then $200-$300+ in July and August for homes with central AC. Your specific bill depends heavily on your plan rate, home size, insulation quality, and thermostat habits.
For most households, a fixed-rate plan is the safer choice. It locks in a predictable per-kWh rate for 12-24 months, protecting you from summer price spikes. Variable-rate plans can be cheaper during mild months but can spike dramatically when demand surges. The exception: if you are on a month-to-month variable plan and pay close attention to market prices, you can switch before summer hits. But most people are better off locking in a competitive fixed rate and not worrying about it.
Air conditioning. When outdoor temperatures reach 100+ degrees for weeks at a time, a central AC unit runs nearly continuously. A 3,500W central AC running 12 hours a day at 14.98 cents/kWh costs about $19 per day, or $570 per month, just for cooling. Add in the refrigerator, ceiling fans, pool pump, and everything else, and summer bills of $250-$400 are common for Texas homes. The single most effective way to reduce your summer bill is to raise the thermostat setting and improve your home's insulation.
The Texas grid (ERCOT) has faced reliability challenges during extreme weather events, most notably the February 2021 winter storm. Since then, significant investments have been made in winterization, new generation capacity, and battery storage. The grid operates independently from the rest of the U.S., which means Texas cannot easily import power from neighboring states during emergencies. For consumers, this means having a backup plan (portable generator, battery power station) is more important in Texas than in states connected to the larger national grids.
Compare Neighboring Rates
See how Texas compares to other states in the South Central region:
Electricity rate data sourced from the U.S. Energy Information Administration (EIA), average residential retail price, last updated January 2026. Your actual rate depends on your utility, plan, and usage tier. See our full disclaimer.