Commercial Electricity Rates in Texas: What Businesses Actually Pay

Here's a scenario we see constantly on the desk (a realistic example, not a live quote): a Houston-area warehouse running the roughly 42,000 kWh/month typical of a Greater Houston commercial account lands a supply contract at 9.8¢/kWh. That's about $4,116/month in energy charges before delivery fees. Move that same load to a competitively bid 6.9¢/kWh contract and energy charges drop to about $2,898/month. The difference, $1,218/month, or roughly $14,600 a year, is money most business owners never go after, because they never actually shopped the contract in the first place.

The Texas average commercial electricity rate is 8.66¢/kWh all-in (supply, delivery, and fees combined), per EIA data through June 2026. That's roughly 39% below the 14.19¢/kWh national commercial average (EIA, 06/2026). Texas businesses get that advantage because ERCOT runs a deregulated retail market, which means you can shop your energy supply instead of paying whatever a regulated utility sets. But here's where almost every business owner gets tripped up: that 8.66¢ figure is a blended, all-in average across every commercial account in the state, corner stores and hospitals alike. When a supplier or broker quotes you a rate, they're almost always quoting supply-only. Delivery charges from your TDU (Oncor, CenterPoint, AEP Texas, or TNMP, depending on where you're located) get added on top, along with pass-through fees that show up as separate line items. A quoted 7¢ supply rate is not directly comparable to an 8.66¢ all-in average, and treating the two as apples-to-apples is the single most common mistake we see when a business shops its own renewal.

• Load factor: how consistently your business draws power. A 24/7 operation like a healthcare clinic or hotel usually gets priced more favorably than a restaurant with a sharp dinner-rush spike and long idle stretches, because suppliers price for peak exposure, not just total kWh.
• Account size: businesses under roughly 50,000 kWh/month are typically limited to fixed-rate contracts. Above that threshold, index and block-and-index pricing structures open up, common in the Dallas-Fort Worth commercial market, and can beat fixed rates when wholesale prices are favorable.
• Contract term: a 12-month contract signed during a high-price stretch locks in high prices for a full year. A 24- to 36-month term signed during a favorable market protects you through multiple summer peak seasons.
• Demand profile: your highest 15-minute kW interval of the month drives a separate demand charge on top of your energy charge. Businesses with sharp equipment spikes pay more here than businesses with flat, steady loads.
• TDU territory: Oncor, CenterPoint, AEP Texas Central/North, and TNMP each set their own delivery rates and fees. You can't shop the TDU, and reliability doesn't change based on which supplier you pick. Only the delivery charge stacked on top of your supply rate changes.

Demand charges are the line item most business owners never ask about, and they should. Your commercial meter records usage in 15-minute intervals, and your bill is calculated off the single highest interval of the month, measured in kW. Run every piece of equipment at once during a lunch rush or a shift change, and that one spike sets your demand charge for the entire billing cycle, even though it barely registered on your total kWh usage. For energy-intensive accounts on CenterPoint's grid around Houston, demand charges can run 30% to 40% of the total monthly bill. A restaurant running 30,000 kWh/month, for instance, could easily see $400 to $600 a month in demand charges layered on top of energy costs, depending on how the kitchen staggers equipment. For larger accounts on interval data recorder (IDR) meters, ERCOT's 4CP methodology, measured across four peak intervals each summer between June and September, sets how much of next year's transmission cost gets allocated to your account. Businesses that can shift load away from those systemwide peak windows meaningfully reduce next year's demand-related charges.

Shop early. Our renewal-timing guide makes the full case for opening the process 12 to 18 months before your contract ends, when suppliers can build forward-priced quotes and you still have leverage; treat 60 to 90 days out as the bare minimum. Businesses that let a contract lapse get rolled onto a month-to-month or default variable rate from their existing supplier, and those rates are almost always priced above what a re-signed or freshly bid contract would cost. Term length matters just as much as timing. In the Dallas-Fort Worth market, where Oncor's competitive footprint gives businesses access to terms from 6 to 36 months and index pricing on larger accounts, we generally recommend a fixed-rate contract of 12 to 24 months for most businesses under 50,000 kWh/month. That's long enough to ride out a full Texas summer without renewal exposure, but short enough that you're not stuck locked in if wholesale prices fall over the following year.