Last Updated on August 16, 2023 by Mary Pressler
Tracking Electricity Rates in Texas
Electricity prices in Texas are generally below the US average, but you can end up paying higher rates depending on the season and your type of energy plan. In most regions of Texas, you can choose your retail electric provider (REP): a good choice can greatly lower your monthly power bills, but a bad choice can cost hundreds of extra dollars over time.
In this article, we will analyze electric rates in Texas during recent years, comparing figures from the US Energy Information Administration (EIA) and Federal Reserve Economic Data (FRED).
US EIA: Texas Electricity Prices in 2010 – 2023
The EIA is constantly gathering energy data from across the US. The following table compares average kilowatt-hour (kWh) prices in Texas and nationwide as of May 2023:
| Market Segment | Texas kWh Price | US Average kWh Price |
| Residential | 14.49 cents/kWh | 16.14 cents/kWh |
| Commercial | 8.68 cents/kWh | 12.31 cents/kWh |
| Industrial | 6.11 cents/kWh | 7.75 cents/kWh |
| Transportation | 7.09 cents/kWh | 12.34 cents/kWh |
| Average Across all Sectors | 9.78 cents/kWh | 12.32 cents/kWh |
The following tables show the average kWh price paid by residential consumers in Texas, between 2000 and 2022. The values shown are the average prices across all 12 months in the corresponding year.
Texas Electricity Prices in 2000 – 2011
| Year | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Electricity Price (Cents/kWh) | 7.90 | 8.70 | 8.10 | 9.19 | 9.60 | 10.84 | 12.70 | 12.41 | 12.83 | 12.66 | 11.58 | 11.27 |
Texas Electricity Prices in 2012 – 2022
| Year | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
| Electricity Price (Cents/kWh) | 11.04 | 11.37 | 11.82 | 11.64 | 11.02 | 11.18 | 11.39 | 11.96 | 11.96 | 12.06 | 13.55 |
Here is the same data in chart format, covering the period between 2000 and 2022:
As you can see in the tables and chart, the average kWh price for residential users in Texas increased sharply between 2000 and 2006. Electricity prices then decreased slightly after 2008, remaining stable between 2010 and 2021. There was another price hike in 2022, a year that was characterized by high inflation across all economic sectors.
Texas Electricity Price Forecast for 2024
Will Electric Rates in Texas Continue to Rise?
The US EIA publishes a Short-Term Energy Outlook every month, which is broken down by region. Texas is part of the West South Central region along with Oklahoma, Arkansas and Louisiana.
- Residential electric rates in the region are expected to increase slightly, from an average value of 13.85 cents/kwh in 2023 to 13.97 cents/kWh in 2024.
- This represents a price increase of less than 1%.
For comparison, regional electric rates increased from 11.78 to 13.21 cents/kWh between 2021 and 2022, which represents a price hike of over 12%. This can be attributed to two main factors:
- US inflation reached a 40-year high in 2022.
- Texas generates around 50% of its electricity with natural gas, which increased in price due to global geopolitical tensions.
The following table compares electricity prices in the West South Central region and the US in general. The table shows average prices for recent years and the 2024 forecast:
| Region | 2021 | 2022 | 2023 | 2024 |
| West South Central | 11.78 cents | 13.21 cents | 13.85 cents | 13.97 cents |
| US Average | 13.66 cents | 15.12 cents | 15.76 cents | 15.67 cents |
Although there was a sharp increase in electric rates between 2021 and 2022, electricity prices in the West South Central region have remained around 11-14% below the US average. For comparison, the New England Region has an average price of 28.82 cents/kWh as of 2023.
Note that electricity prices also vary depending on the season, since supply and demand are constantly changing. In Texas, electricity prices tend to peak during the hottest summer months, and also during extreme cold weather. Lower prices can generally be found during spring and fall, since the population is not using air conditioning or space heating systems at full capacity.
Texas Electricity Prices by TDU Service Area
The Public Utility Commission of Texas (PUCT) publishes the Quarterly Retail Electric Service Bill Comparison, for each of the five utility service areas:
- Oncor
- CenterPoint
- AEP Texas Central
- AEP Texas North
- TNMP
In Texas you can choose your retail electricity provider (REP), but your transmission and distribution utility (TDU) depends on your location. The local TDU manages the grid, which is used to deliver the energy sold by all retailers. Your kWh price depends on the electricity plan chosen, but there is a common TDU fee that is added to all plans.
The PUCT publishes average power bills for multiple electricity plans in each TDU service area, considering three consumption levels: 500, 1000 and 2000 kWh. The following table shows the typical power bills reported between Q1 2021 and Q1 2023 for residential users with a consumption of 1,000 kWh/month:
| TDU | Oncor | CenterPoint | TNMP | AEP Central | AEP North |
| March 2021 | $89.30 – $127.70 | $90.83 – $138.94 | $103.20 – $131.94 | $95.68 – $126.95 | $78.60 – $116.95 |
| June 2021 | $99.15 – $137.70 | $103.02 – $138.69 | $112.49 – $139.90 | $108.49 – $141.41 | $104.00 – $134.99 |
| Sept. 2021 | $99.15 – $153.71 | $123.12 – $167.87 | $129.48 – $169.94 | $119.48 – $159.83 | $105.49 – $159.46 |
| Dec. 2021 | $113.46 – $157.71 | $123.49 – $174.84 | $133.45 – $175.90 | $123.44 – $164.90 | $109.48 – $164.93 |
| March 2022 | $121.48 – $199.68 | $127.46 – $193.28 | $139.47 – $174.37 | $129.48 – $194.91 | $117.49 – $164.89 |
| June 2022 | $199.48 – $263.68 | $209.49 – $274.17 | $215.47 – $285.90 | $209.48 – $264.94 | $189.49 – $264.94 |
| Sept. 2022 | No data available | No data available | No data available | No data available | No data available |
| Dec. 2022 | $144.21 – $179.71 | $153.69 – $212.43 | $161.42 – $215.39 | $148.98 – $209.46 | $148.98 – $189.47 |
| March 2023 | $108.71 – $168.08 | $118.19 – $212.43 | $133.92 – $174.89 | $113.60 – $173.82 | $118.39 – $169.83 |
As you can see in the table, there was a major kWh price increase between 2021 and 2022, but prices have been relatively stable in 2023.
What Is the ERCOT Performance Credit Mechanism? Does It Affect Electricity Prices?
In January 2023, the PUCT introduced the Performance Credit Mechanism (PCM), which changes how power generators are paid for electricity.
- Texas currently has an energy-only market, which means generators are only paid for the kilowatt-hours provided to the grid.
- With the PCM, generators would also be compensated for having capacity available at times of high demand – such as hot winter days with a high air conditioning load.
The PCM has the goal of making the ERCOT grid more reliable, by providing an incentive to build more dispatchable power plants. However, there are also concerns on how the new performance credit will impact electricity prices.
Natural gas and hydroelectric power plants are considered dispatchable, since you can ramp up production at any time. Wind and solar farms are considered non-dispatchable, since there is no way to control wind conditions and sunlight.
According to an article by Power Grid International, implementing the PCM could take around two years, and consumers can expect a price impact of around 2% when it happens. Assuming the PCM is implemented by 2025, a $100 monthly power bill would increase by roughly $2.
View Current Electric Rates Near You
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