What Is the Average Electricity Bill in Texas?

In Texas, the energy market operates under a unique deregulated system, distinguishing it from states where a single utility controls both electricity generation and delivery. This structure means most Texans can choose their electricity provider, fostering competition among retail electric providers (REPs).

The Average Texas Electricity Bill

The average residential electricity bill in Texas for 2025 is around $170.63, reflecting an average rate of approximately 14.68 cents per kilowatt-hour (kWh). This figure is slightly higher than the 2024 average of $165.94 and remains below the national average. Texas households typically consume more electricity than the national average, with monthly usage around 1,094 kWh, compared to the national average of 886 kWh. This higher consumption is often attributed to larger home sizes and the significant demand for air conditioning during the state’s hot summers.

Actual bills can differ considerably based on factors such as home size, the number of occupants, and individual energy habits. For example, a one-bedroom apartment might see an average bill of around $65.78 per month, while a 4,000-square-foot home could have an average bill of $351 per month. Bills are often higher during summer and winter months due to increased heating and cooling demands.

Key Determinants of Electricity Costs

Electricity consumption, measured in kilowatt-hours (kWh), is the primary driver of electricity costs. Larger homes, more occupants, and individual lifestyle choices, such as frequent use of high-energy appliances or maintaining specific indoor temperatures, significantly impact overall kWh consumption.

The type of energy plan selected plays a substantial role in the per-kWh cost. Fixed-rate plans offer a consistent price per kWh for the contract duration, providing predictability. Variable-rate plans fluctuate with the wholesale electricity market, potentially leading to lower costs during low demand but higher costs during peak times. Indexed plans tie the electricity rate to a publicly available index, offering transparency but also exposing consumers to market volatility.

Beyond the energy rate, electricity bills include various charges from both the retail electricity provider (REP) and the Transmission and Distribution Utility (TDU).

Seasonal weather significantly influences electricity bills, particularly in Texas where extreme temperatures are common. Hot summers necessitate extensive air conditioning use, while colder winters increase heating demands. These periods of high demand lead to greater electricity consumption and higher monthly costs.

The energy efficiency of a home also determines electricity costs. Well-insulated homes with efficient windows and modern appliances require less energy to maintain comfortable temperatures. Conversely, older homes with poor insulation or outdated appliances tend to have higher consumption. Investing in energy-efficient upgrades can lead to substantial long-term savings on electricity bills.

Decoding Your Texas Electricity Statement

A Texas electricity statement typically begins with the energy charge, representing the cost of electricity consumed. This is calculated by multiplying the total kilowatt-hours (kWh) used during the billing cycle by your chosen retail electricity provider’s (REP) rate. This charge forms the core of your electricity expense.

A base charge, also known as a customer charge, is a fixed monthly fee levied by the REP, irrespective of the amount of electricity consumed. This charge covers administrative costs and is a standard component on many electricity plans. Some plans may also include minimum usage fees, applied if your consumption falls below a specified kWh threshold.

Transmission and Distribution Utility (TDU) charges, often labeled as delivery charges, are a significant part of the bill. These fees are collected by the utility company that owns and maintains the poles, wires, and other infrastructure responsible for delivering electricity to your home. REPs pass these charges directly to consumers, covering grid maintenance, repairs, and power delivery.

Electricity statements also itemize various taxes and regulatory fees. These can include state and local sales taxes, as well as fees related to the operation and oversight of the deregulated electricity market in Texas. These governmental and administrative charges are mandatory and applied to the total cost of your electricity service.

Many electricity bills provide a usage history or graph, visually representing your past electricity consumption over several months or even a year. This feature allows you to track your energy usage patterns, identify periods of high consumption, and compare current usage to previous periods. Additionally, the statement typically displays an “average price per kWh,” which is calculated by dividing your total bill amount (excluding taxes and fees not based on consumption) by your total kWh consumed. This average price helps in comparing the overall cost of different plans.

Practical Approaches to Reduce Electricity Expenses

Energy conservation habits can immediately reduce electricity consumption and lower monthly bills. Adjusting thermostat settings, unplugging electronics to prevent “phantom load,” utilizing natural light, and switching to energy-efficient lighting like LED bulbs are effective behavioral changes.

Strategically selecting an electricity plan is also important. Texas’s deregulated market offers numerous options, including fixed-rate, variable-rate, and indexed plans. Evaluate your typical electricity usage patterns to choose a plan that aligns with your needs. For example, a fixed-rate plan might suit those seeking stable monthly costs, while a variable-rate plan could appeal to those who manage usage based on market fluctuations. Always review the Electricity Facts Label (EFL) for any plan, which details the rate, contract terms, and potential fees.

Investing in home efficiency improvements can significantly lower long-term electricity expenses. Sealing air leaks around windows and doors with caulk or weatherstripping reduces heating and cooling demands. Improving attic insulation minimizes heat transfer. Upgrading to smart thermostats allows for programmable temperature control and remote management, optimizing energy use. Replacing old appliances with ENERGY STAR® certified models also leads to considerable energy savings.

Actively monitoring electricity usage provides valuable insights into consumption patterns and helps identify areas for reduction. Many retail electricity providers and Transmission and Distribution Utilities offer online tools or mobile applications that allow customers to track their real-time and historical energy consumption data. Utilizing these resources can empower consumers to make timely adjustments to their energy habits, leading to more controlled and potentially lower electricity bills.