You see an electricity plan advertised at one price. Then the bill comes, and the number is different.
That advertised price is really a bundle of several charges, and only some of them come from the company you picked. Once you can see the pieces, comparing plans gets a lot easier.
Why Texans get to pick their electric company
In most of Texas, you choose the company that sells you electricity. That started on January 1, 2002, after a state law passed in 1999. Lubbock joined in 2024.
Not everyone can shop, though. Some cities and electric co-ops run their own power. You can check your address on our areas served page.
Who does what
Three different organizations are involved in getting power to your house, and they're easy to mix up.
Your electricity provider is the company you buy from. It sells you a plan, sets your price, and sends your bill. The official name is "retail electric provider," or REP.
The company that owns the power lines is a separate business. It owns the poles, the wires, and the meter on your house, and it's the one fixing things when the power goes out. You don't pick this company. Your address decides it. The official name is "TDU" (transmission and distribution utility). In Texas, the big ones are:
- Oncor
- CenterPoint
- AEP Texas
- TNMP
- Lubbock Power & Light
ERCOT keeps power flowing across most of Texas. It also handles the paperwork when you switch providers.
The part a lot of people miss: switching providers doesn't change who delivers your power. You're on the same lines either way. State rules don't even let a provider claim you'll get better delivery by choosing them.
What's inside your price
Your rate is built from five pieces. The first two come from your provider, the next two come from the company that owns the power lines, and the last one is taxes and state fees.
Piece 1: The cost of the power itself
This is the "energy charge," a price for each kilowatt-hour you use.
A kilowatt-hour (kWh) is a unit of electricity. Running a 1,000-watt microwave for one hour uses about 1 kWh. Use more, pay more. This is the part providers compete on most.
Piece 2: A flat monthly fee from your provider
Some plans add a "base charge," which is the same every month no matter how much power you use. Not every plan has one. Some fold everything into one price.
Piece 3: The delivery fee from the company that owns the power lines
Your provider pays the power line company to deliver your electricity, then passes that cost on to you.
Your provider doesn't set this fee. The state approves it, and everyone in your area pays the same delivery rates no matter which provider they pick.
For homes, the delivery fee is a small flat monthly fee, a small flat monthly meter fee, and a few cents for each kWh you use. These are the state's numbers for homes as of October 1, 2026:
| Power line company | Flat monthly fee | Meter fee | Per kWh |
|---|---|---|---|
| AEP Texas Central | $1.27 | $1.97 | 5.7¢ |
| AEP Texas North | $1.27 | $1.97 | 5.6¢ |
| CenterPoint | $2.11 | $2.79 | about 6.5¢ |
| Oncor | $1.48 | $2.58 | about 6.0¢ |
| TNMP | $1.70 | $5.86 | about 7.8¢ |
These fees change a few times a year. Oncor, for example, had an update take effect October 4, 2026, so today's numbers may be a little different. Lubbock isn't on the state's list.
Piece 4: Small add-on fees from the power line company
That per-kWh delivery number is actually a stack of smaller fees. Each one pays for something specific:
- Building and keeping up the big long-distance power lines
- Upgrading the local lines in your neighborhood
- Energy-saving programs
- Safely closing old nuclear plants someday
You'll rarely see these listed one by one, since most bills roll them into a single "delivery charges" line. If you're curious, ask your provider for the full list. They have to give it to you.
Piece 5: Taxes and state fees
These show up at the end of the bill. You might see:
- Gross receipts tax reimbursement. This covers a state tax on providers that serve homes inside city limits (in towns with more than 1,000 people). If you live outside city limits, you may not see it.
- PUC assessment. A small fee that helps pay for the state agency that oversees electricity.
- Sales tax. This can depend on where you live.
The fact sheet every plan comes with
Every plan has a one-page fact sheet called the Electricity Facts Label, or EFL. The state compares it to the nutrition label on a cereal box.
It shows a price per kWh at three usage levels: 500, 1,000, and 2,000 kWh a month. That price includes the power, your provider's flat fee, the delivery fee, and any regular credits. It leaves out sales tax and the gross receipts tax, so your actual bill will run a little higher.
Why the price changes at 500, 1,000, and 2,000 kWh
Flat fees get spread over however much power you use. Use less, and each kWh carries more of those fees.
Picture a $10 pizza delivery fee. Split between 2 people, it's $5 each. Split among 10, it's $1 each.
A real example: spring bill vs. July bill
Say you live in the Oncor area. Using the state's numbers as of October 1, 2026, this is only the delivery part of your bill:
| Your month | Your usage | Delivery part only | Works out to |
|---|---|---|---|
| Mild spring month | 1,000 kWh | $64.36 | about 6.4¢ per kWh |
| Hot July with the AC running | 2,000 kWh | $124.65 | about 6.2¢ per kWh |
| Small apartment month | 500 kWh | $34.21 | about 6.8¢ per kWh |
Your July delivery cost nearly doubles because you used twice the power. The price per kWh actually dips a bit, since the flat fees are spread thinner.
Your provider's charges get added on top of that. If a plan has a big flat fee, the gap between 500 and 2,000 kWh gets even wider.
So don't go by the 1,000 kWh price in the ad unless you really use about that much. Pull up a spring bill and a summer bill, see what you actually use, and look at the EFL price closest to each.
Two more documents to skim
Every plan also comes with a Terms of Service, which is your actual contract. It lists fees and what happens when your plan ends. You'll also get Your Rights as a Customer, a short summary of the protections the state guarantees you.
You get all three documents when you sign up, and you can ask for them again anytime for free.
Kinds of plans
Fixed rate. Your price per kWh stays the same for the whole contract. Contracts last at least three months. The price can only change for things outside the provider's control, like a change in delivery fees or a new law.
Variable rate. Your price can change from month to month. For homes, these plans are month-to-month only. On the plus side, there's no fee to cancel.
Indexed rate. These follow the ups and downs of the power market. Texas hasn't allowed them for homes or small businesses since 2022.
Bill credit plans
A bill credit plan takes money off your bill if you use a certain amount of power, for example a credit that kicks in at 1,000 kWh.
These plans can look like a great deal on the EFL, because the price at 1,000 kWh includes the credit. But miss the target by even a little and you lose the whole credit. A mild spring month could do it. So could a week at Grandma's.
Some plans flip it around and charge a "minimum usage fee" if you use too little.
Look at your last 12 bills before you sign. If your usage swings a lot between seasons, a simpler plan may be easier to live with. Our bill credits page has more.
Free nights or free weekends
These plans charge $0 for the power itself during certain hours. The daytime price is usually higher to make up for it, and delivery fees may still apply during the "free" hours, so check the EFL.
They work best for households that can run the dishwasher, laundry, or car charger at night or on weekends. See our free nights and weekends plans.
Contract length and cancellation fees
A longer contract locks in your price for more months, but most fixed plans charge a fee if you leave early. That's the early termination fee, and it's listed on the EFL.
A few rules work in your favor:
- If you're moving, you usually won't owe that fee. Give your provider your new address (and proof you moved, if they ask).
- There's no cancellation fee in the last 14 days of your contract.
- Your provider has to send you notices before your plan ends, and your bill shows the end date.
- After you switch, you get three business days to cancel for free. This doesn't apply if you're moving into a new home.
If you do nothing when the contract ends, you'll roll onto whatever renewal plan your contract lists, which is often more expensive. A phone reminder set for a month before the end date is worth the ten seconds it takes.
Deposits (and how to skip them)
A provider may ask for a deposit if your credit isn't strong. The state limits how much. For a home, it's no more than the bigger of:
- one-fifth of what they expect you'll pay in a year, or
- what they expect your next two bills will be.
If they hold your deposit more than 30 days, it earns interest.
Some people can skip the deposit, including customers 65 or older who are current on their electric bills and certified victims of family violence. You can also ask someone to sign a letter guaranteeing your bill. Or skip the question entirely with one of our no-deposit plans.
Green energy plans
Every EFL shows how much of the plan's power comes from renewable sources like wind and solar, along with the Texas average for comparison. Browse our green energy plans.
Why prices go up and down
Plan prices can change often, sometimes daily. The main reasons:
- Natural gas. A lot of Texas power is made with natural gas. When gas costs more, power usually does too.
- Summer heat. When everyone runs the AC, demand shoots up and more expensive power plants turn on to keep up.
- Weather surprises. Freezes, heat waves, or calm, cloudy days (less wind and solar) can tighten supply.
- Delivery fee updates. The power line companies' fees change a few times a year.
A fixed-rate plan protects the power part of your price from those swings while your contract lasts.
Shopping for a business?
Business electricity works a little differently. Bigger accounts often pay a "demand charge," a fee based on your highest burst of power use in a month, not only your total. You're paying for the size of the pipe as well as the water. One busy moment, like a lot of equipment starting at once, can raise the bill for the whole month.
Business fact sheets also use bigger usage levels (1,500, 2,500, and 3,500 kWh). Start on our business electricity page.
How to compare plans
- Grab your last 12 bills and note your kWh in a spring month and a summer month.
- On each EFL, look at the price closest to your usage.
- Read the fine print for flat fees, bill credits, minimum usage fees, and the cancellation fee.
- Pick a contract length that fits. If you might move, keep that in mind.
- Compare in more than one place. Texas runs a site called Power to Choose, but the state notes that providers post those offers themselves and the state doesn't check them. Read our Power to Choose guide, then compare electricity rates side by side.
Quick answers
Who is the company that owns the power lines, and can I pick a different one?
It's the company that owns the poles, wires, and meter, and fixes outages. You can't pick it. It depends on your address. You only choose the company you buy power from.
Why does the price at 500 kWh look higher than at 2,000 kWh?
Flat monthly fees get spread over fewer kWh when you use less. So each kWh costs a bit more.
Does the fact sheet price include taxes?
No. It leaves out sales tax and the gross receipts tax. Your bill will be a little higher.
Will I pay a cancellation fee if I move?
Usually not. Give your provider your new address, and proof if they ask.
Why is my July bill so much bigger than my April bill?
You're using more power to run the AC. Even the delivery part of your bill goes up when you use more.
Can I get a plan that follows market prices?
Not for a home. Texas doesn't allow indexed or wholesale-priced plans for homes or small businesses.
Compare plans in your area
Enter your ZIP code on WattKarma to compare Texas electricity plans where you live. Our FAQ covers the common questions.
Prices and delivery fees change often. Always read a plan's Electricity Facts Label, Terms of Service, and Your Rights as a Customer before you sign up. WattKarma is run by Symbio Energy Partners, a broker registered with the Public Utility Commission of Texas (PUCT Broker Reg. No. BR220202).
Sources
All sources were checked on October 16, 2026.
- Public Utility Commission of Texas (PUCT), "50 Years Serving Texans" (state law passed in 1999; choice began Jan. 1, 2002): https://puc.texas.gov/agency/about/anniversary/
- PUCT news release on Lubbock customers choosing a provider in 2024, and on Power to Choose offers being posted by providers and not checked by the PUCT: https://ftp.puc.texas.gov/public/puct-info/agency/resources/pubs/news/2024/PUCT_Power_to_Choose_Tool_Can_Help_Lubbock_Consumers_Select_A_New_Electricity_Provider.pdf
- PUCT, home delivery charges and average delivery bills at 500, 1,000, and 2,000 kWh, as of Oct. 1, 2026: https://www.puc.texas.gov/industry/electric/rates/TDR.aspx
- Oncor's monthly rate report to the PUCT (rates as of Oct. 1, 2026; update effective Oct. 4, 2026): https://interchange.puc.texas.gov/Documents/58511_62_1683254.PDF
- Oncor, Tariff for Retail Delivery Service (list of add-on delivery fees): https://www.oncor.com/content/dam/oncorwww/documents/about-us/regulatory/tariff-and-rate-schedules/Tariff%20for%20Retail%20Delivery%20Service.pdf
- PUCT Rule 25.475 (fact sheet rules, usage levels, plan types, cancellation fees, renewal notices, renewable percentage, no claims of better delivery): https://ftp.puc.texas.gov/public/puct-info/agency/rulesnlaws/subrules/electric/25.475/25.475.pdf
- PUCT Rule 25.479 (official names for bill charges, taxes, and fees; itemized list on request): https://ftp.puc.texas.gov/public/puct-info/agency/rulesnlaws/subrules/electric/25.479/25.479.pdf
- PUCT Rule 25.478 (deposits): https://ftp.puc.texas.gov/public/puct-info/agency/rulesnlaws/subrules/electric/25.478/25.478.pdf
- PUCT Rule 25.474 (three business days to cancel after switching): https://ftp.puc.texas.gov/public/puct-info/agency/rulesnlaws/subrules/electric/25.474/25.474.pdf
- PUCT, "Understanding your bill": https://www.puc.texas.gov/consumer-help/electricity/understanding-bill/
- PUCT, Electricity Facts Labels (the "nutrition label" comparison): https://www.puc.texas.gov/industry/electric/rates/facts/Default.aspx
- PUCT fact sheet on electric bill charges (minimum usage fee): https://ftp.puc.texas.gov/public/puct-info/consumer/facts/factsheets/elecfacts/ChargesElectBill.pdf