Why is electricity so cheap in Texas?
Texas pays 15.88¢/kWh for residential electricity, 13.3% below the U.S. average of 18.31¢/kWh and the #22 lowest of 51 jurisdictions. At 900 kWh a month that is about $142.92, against $164.79 at the U.S. average.
Rates are EIA residential averages through July 2026, refreshed Sep 28, 2026. The U.S. average is the EIA U.S.-total residential price; rank and region figures compare the 51 jurisdiction averages.
How Texas compares
| Measure | Texas |
|---|---|
| Residential rate (EIA, July 2026) | 15.88¢/kWh |
| U.S. average (EIA) | 18.31¢/kWh |
| Difference | −13.3% (−2.43¢) |
| Rank among 51 jurisdictions | #30 highest (#22 lowest) |
| South average (17 states) | 16.24¢/kWh |
| Affordability tier | Very Affordable (index 91/100) |
| 12-month change | rose 3.4% (15.36¢/kWh → 15.88¢/kWh) |
| 5-year change | rose 35.4% (11.73¢/kWh → 15.88¢/kWh) |
See every state in one ranked table on electricity cost per kWh by state or the South region.
What the EIA series shows for Texas
- Past 12 months (July 2025 → July 2026)
- The Texas residential rate rose 3.4% (+0.52¢/kWh), from 15.36¢ in July 2025 to 15.88¢ in July 2026.
- Past 5 years (July 2021 → July 2026)
- The rate rose 35.4% (+4.15¢/kWh), from 11.73¢ in July 2021 to 15.88¢ in July 2026.
- Past 10 years (July 2016 → July 2026)
- The rate rose 46.6% (+5.05¢/kWh), from 10.83¢ in July 2016 to 15.88¢ in July 2026.
- Highest and lowest month on record
- In this series the Texas rate peaked at 16.99¢/kWh in April 2026 and bottomed at 7.44¢/kWh in November 2002. The series covers January 2001 to July 2026.
- Steepest 12-month increase
- The largest single-year move in the series ended in January 2006: the rate rose 30.2% (+2.76¢/kWh), from 9.15¢ in January 2005 to 11.91¢ in January 2006. That is when the change happened; the series does not say what caused it.
- Against the rest of the country
- Over the same window the unweighted average across the 51 jurisdictions with data for this period rose 33.7%, so Texas's +35.4% outpaced the nationwide move by 1.6 percentage points. That gap is the part of the movement this dataset cannot attribute to a nationwide trend — it does not identify what else was involved.
- Rank among jurisdictions (July 2021 → July 2026)
- Measured over that identical five-year window, Texas's change is the 17th largest of the 51 jurisdictions whose series covers it — rank 1 is the biggest increase, rank 51 the biggest decrease. The rank places the movement; it does not explain it.
Between January 2001 and July 2026 the rate peaked at 16.99¢/kWh in April 2026 and bottomed at 7.44¢/kWh in November 2002.
Every month is charted on the Texas electricity price history page, with the year-over-year table and the same measured facts.
What sits on top of the rate in Texas
Texas is a deregulated market: Oncor (delivery) bills delivery ($4.06 a month fixed plus 6.12¢/kWh in riders), and a competitive retailer bills the supply separately.
The line items are on hidden electricity fees and taxes for Texas, and plan choice matters in a competitive market: read regulated vs deregulated markets.
Reviewed price drivers for Texas
A rate series shows what changed, not why. The factors below are reviewed context for Texas maintained separately from the price data — they are not causes measured from the movement above, and no share of the change is attributed to any of them.
- Natural gas dominance in generation (Generation Mix, high confidence). Texas generates a large share of its electricity from natural gas. This means retail rates can be sensitive to movements in natural gas prices, particularly during periods of high demand.
- Summer cooling demand and winter storm risk (Weather & Peak Demand, high confidence). Extreme summer heat drives high air conditioning demand, while rare but severe winter events can stress the grid. Both patterns can affect wholesale prices and long-term planning costs.
- Energy-only market structure (ERCOT) (Capacity Markets, high confidence). Texas operates an energy-only wholesale market through ERCOT, without a traditional capacity market. This design can lead to higher price volatility during scarcity events.
The full set is on Texas electricity price drivers; the factors themselves are documented on electricity generation cost drivers.
What the rate means for a Texas bill
| Monthly usage | Texas (15.88¢/kWh) | U.S. average (18.31¢/kWh) |
|---|---|---|
| 650 kWh | $103.22 | $119.01 |
| 900 kWh | $142.92 | $164.79 |
| 1,200 kWh | $190.56 | $219.72 |
| 1,600 kWh | $254.08 | $292.96 |
- Average electric bill in Texas, by home size and city.
- Estimate a Texas bill from your own usage.
- Why is my electric bill so high? When the rate is low but the bill is not.
- Compare electricity plans if your contract rolled to a variable rate.
Frequently asked questions
Why is electricity so cheap in Texas?
Texas pays 15.88¢/kWh for residential electricity, 13.3% below the U.S. average of 18.31¢/kWh and the #22 lowest of 51 jurisdictions. Over the past 12 months the rate rose 3.4% (15.36¢/kWh → 15.88¢/kWh), and over five years it rose 35.4% (11.73¢/kWh → 15.88¢/kWh). Reviewed context for Texas points to natural gas dominance in generation, summer cooling demand and winter storm risk, energy-only market structure (ercot) — documented factors, not measured contributions to the rate.
How does Texas's electricity rate compare with the U.S. average?
15.88¢/kWh in Texas against 18.31¢/kWh for the U.S. average (EIA, July 2026): 13.3% below, the #22 lowest of 51 jurisdictions. The South average across 17 states is 16.24¢/kWh. At 900 kWh a month that is about $142.92, against $164.79 at the U.S. average.
Is electricity in Texas getting more expensive?
Over the past 12 months the rate rose 3.4% (15.36¢/kWh → 15.88¢/kWh), and over five years it rose 35.4% (11.73¢/kWh → 15.88¢/kWh). In EIA data from January 2001 to July 2026, the rate peaked at 16.99¢/kWh in April 2026 and bottomed at 7.44¢/kWh in November 2002. The full monthly series is on the Texas electricity price history page.
How much is a typical electric bill in Texas?
At 900 kWh a month that is about $142.92, against $164.79 at the U.S. average. 650 kWh: about $103.22; 900 kWh: about $142.92; 1,200 kWh: about $190.56; 1,600 kWh: about $254.08. Texas is a deregulated market: Oncor (delivery) bills delivery ($4.06 a month fixed plus 6.12¢/kWh in riders), and a competitive retailer bills the supply separately.