Cheapest Electricity Plans in Texas: How to Spot Them
· Updated
There is no single cheapest electricity company in Texas — it depends on your ZIP code and how much power you use. What you can know is where the catch is. On the state’s official comparison site, Power to Choose, the plans at the top of the list cost 6 or 7 cents per kWh, but only if you use exactly 1,000 kWh a month. Use 500 and the same plan costs 19 or 20 cents. Simple 12-month fixed plans without that catch were running 11 to 12 cents on October 19, 2026.
How to find the cheapest electricity in 5 steps
- Go to Power to Choose (powertochoose.org). It is run by the Public Utility Commission of Texas (PUCT), it’s free, and it doesn’t recommend any company.
- Enter your ZIP code to see which providers serve your area.
- Check your bills for your monthly kWh — look at several months, since summer usage runs much higher.
- Compare prices at your usage level, not just at 1,000 kWh. Every plan lists its average price at 500, 1,000 and 2,000 kWh.
- Open the plan’s Electricity Facts Label (EFL) before you sign. The PUCT requires one for every plan, with the price, fees, contract terms and cancellation fee.
The 1,000 kWh trap
Many plans include a bill credit that applies only if you use a certain amount. The credit makes the 1,000 kWh price look very low. Here is how the top Houston (CenterPoint) plans looked on Power to Choose on October 19, 2026, in cents per kWh:
| Plan type | 500 kWh | 1,000 kWh | 2,000 kWh |
|---|---|---|---|
| Cheapest “at 1,000 kWh” (bill credit) | 19.2 | 6.2 | 12.2 |
| Cheapest 12-month fixed, no credit | 12.3 | 11.8 | 11.6 |
| Cheapest prepaid | 17.6 | 15.9 | — |
On one of those plans the credit is $125 when usage is at least 1,000 kWh. Fall short and there’s no credit — you pay the full rate. Dallas (Oncor), Corpus Christi (AEP Central) and Abilene (AEP North) showed the same pattern. Providers ranked by price and complaints: best electric company in Houston and in Dallas.
Watch for minimum usage charges too: some plans add a fee if you use less than a set amount, Power to Choose warns, and it may not appear as a separate line on your bill. Check the EFL.
Rule of thumb: if your usage swings a lot month to month, pick a plan whose 500, 1,000 and 2,000 kWh prices are close together.
Fixed, variable or indexed?
Per Power to Choose:
- Fixed rate: your price per kWh doesn’t change during the contract, except for delivery charges or changes required by law. Good for budgeting, but if prices fall you wait out the contract.
- Variable: no contract or cancellation fee, but the rate can change monthly — and spike in cold snaps, disasters or market swings.
- Indexed: the rate follows a formula tied to a public index and can change substantially each month.
- Time of use (free nights, free weekends): cheaper or free hours, a higher price the rest of the time. When it pays off: free nights electricity in Texas.
Contracts of three months or longer may charge an early termination fee. In Houston on October 19, the most common fees were $150 to $175; some reached $300, some charged $15 or $20 per remaining month, and a few charged nothing.
No-deposit electricity
All five legal ways to skip it, including the rule for seniors 65+: no-deposit electricity in Texas.
A provider may require a deposit from new customers — up to one-fifth of your estimated annual bill or the sum of your next two estimated bills, per the PUCT. But:
- It can be lowered or waived based on your payment or credit history — ask.
- It is refundable when you leave in good standing.
- Providers can’t deny service or demand a deposit based on your income level.
- Prepaid plans don’t require a deposit.
How prepaid electricity works
Per the PUCT:
- No deposit, but a starting balance of up to $75, plus possible delivery-utility fees that can push the first payment above $75.
- No monthly bill; balance alerts come by text, email or phone.
- If your balance drops below the disconnection threshold (up to $10), you can be cut off with little notice — one to seven days, or as little as one day after a low-balance alert if you use power faster than expected.
- After you pay off a negative balance and top up, service should return within about two hours.
- Most prepaid plans are variable-rate and usually cost more: the cheapest in Houston was 15.9 cents at 1,000 kWh versus 11.8 for the simple fixed plan. Full details by city: prepaid electricity in Texas.
If you get or may need bill-payment help, check before switching: some assistance agencies don’t help prepaid customers, the PUCT warns. Where to get it: help paying your electric bill in Texas.
How much does electricity cost in Texas?
In July 2026, Texas residential electricity averaged 15.88 cents per kWh versus 18.31 nationally, according to the U.S. Energy Information Administration (EIA). A year earlier, Texas was at 15.36.
At 12 cents and 1,000 kWh, the electricity part of your bill comes to about $120 a month before taxes.
Questions to ask before you sign
Power to Choose suggests asking:
- What will I pay per kWh based on 1,000 kWh of average monthly usage?
- Does that include everything — energy, delivery charges and monthly fees?
- Is it fixed, variable or indexed? If it can change, how will I find out?
- Is there a contract, and how long?
- Is a deposit required, and how much?
- What happens when my contract expires?
- Is there a penalty for canceling early?
Switching providers
- No switching fee (except a special meter read), though breaking a current contract may cost you.
- You don’t have to tell your current provider — ERCOT handles it.
- The switch happens within about seven business days, with no gap in service.
- You have three business days to cancel without penalty after receiving your contract.
- Your provider must notify you at least 30 days before your contract ends. If you do nothing, you roll onto a month-to-month plan that is usually much more expensive. You can switch penalty-free starting 14 days before expiration.
The company you pick only sells you the energy. Your local wires utility — CenterPoint, Oncor, AEP, TNMP and others — still delivers it and handles outages, so reliability doesn’t change.
Where in Texas can’t you choose?
Areas served by city-owned utilities or co-ops have no choice. When checked on Power to Choose, Austin, San Antonio and El Paso had no plans to pick from; Houston, Dallas, Corpus Christi, Abilene and Lubbock did.
Problems with a provider? File a complaint with the PUCT at 1-888-782-8477 (1-888-PUC-TIPS).
Will Venezuelan oil lower electricity bills in Texas?
With the new U.S.-Venezuela oil contracts, many expect energy in Texas to get cheaper. For electricity, the direct effect is small: the Texas grid (ERCOT) makes almost all its power from natural gas (43%), wind and solar (36%), coal and nuclear, per the EIA for January to September 2025; oil is barely used to generate electricity. Venezuelan crude does reach Texas Gulf Coast refineries, and through them gasoline, which hasn’t fallen yet either: will Venezuelan oil lower U.S. gas prices?. What lowers your bill today is picking the right plan.
What this page can’t tell you
- Which plan will be cheapest tomorrow. Prices change daily; these are from October 19, 2026.
- Which plan is right for you. That depends on your ZIP code and usage. This page doesn’t recommend any provider.
To use fewer kWh, see how many watts a 12,000 BTU air conditioner uses.