High electricity rates in Texas

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Texas electricity rates are increasing this summer. A heatwave, rising natural gas prices, and record-breaking energy demand mean high electricity prices for Texas residents and business owners.

The seasonal struggle resurfaced earlier this summer with an announcement from the Electric Reliability Council of Texas (ERCOT), which runs the Texas power grid. In its Seasonal Assessment of Resource Adequacy (SARA), released in May, ERCOT predicted this summer would see record high energy demand. The SARA report predicted there would still be enough power generation to meet the record summer demand. 

However, ERCOT has released multiple requests for Texans to conserve electricity since May, including two appeals within three days of one another. ERCOT pointed to record high demand, decreased generation from wind and solar sources, and forced thermal outages as reasons for the conservation appeals. 

The result: energy rates have increased as the cost of wholesale electricity gets passed along to customers.

Historical trends of Texas electricity rates

Residential electricity rates in Texas have increased about 14% in the last five years. Here’s a breakdown of the average electricity rates in Texas since 2018.

According to the most recent data from the Energy Information Administration (EIA), the average Texas electricity rate in August  2022 was 13.15cents per kWh. While the increased summer temperatures may be tapering off, the average residential rate may remain higher than normal for the time being.

Electricity rates in Texas usually increase in the summer months as energy demand goes up due to the increased use of air conditioning. ERCOT defines the summer season as the months from May to September, so the average rate in May could be an indication of how much energy prices will increase this year in correlation with the record-breaking energy demand in Texas.

What to do about high Texas electricity rates

Despite the heatwave and increase in summer energy prices, there are ways that residents can cut their energy consumption and keep electricity bills in check. 

• Keep the sun out. Use curtains, shades, or blinds to block direct sunlight whenever possible. This can keep rooms cooler during the hottest parts of the day and reduce dependence on air conditioning.
• Adjust the thermostat. Set your thermostat at a higher temperature than you normally might. If you have a programmable thermostat, make sure to raise the temperature when you are at work or away from home so you aren’t paying to cool an empty house. In its conservation requests, ERCOT has suggested Texans set their thermostat to 78 degrees. While that is too warm for many residents, raising the thermostat even a few degrees can help lower your energy consumption.
• Rely more on fans. Ceiling fans help more than most folks realize; homeowners can raise the thermostat temperature by about 4 degrees without a noticeable difference by relying more on fans.
• Change your HVAC filters. We recommend HVAC maintenance at least twice a year. Keeping your HVAC well-maintained helps it run efficiently and helps you avoid paying more for an inefficient system.
• Save energy in different rooms. There are easy ways to conserve electricity in every room of your home. In the kitchen, you can run the dishwasher overnight to avoid peak usage times for electricity. While doing laundry, use cold water to wash clothing.
• Avoid energy vampires. Even when they’re turned off, some electronics use electricity. An example is phone and tablet chargers, which continue to consume electricity even if they aren’t actually charging anything. Unplug them when possible.
• Understand where you use electricity. Knowing which devices and appliances in your home account for the most energy consumption can help you know where to cut back. You can use the SaveOnEnergy usage calculator to estimate which appliances use the most power in your home.
• Go solar. SaveOnEnergy can also help you explore solar energy options in your area. We partner with top-tier solar companies to offer customized residential solar systems. If you invest in solar panels for your home, you may be able to lower your energy costs. Most consumers who purchase solar panels choose to remain connected to the grid, although those who opt for an off-grid solar system could achieve even greater energy savings. For consumers who live in apartments or rentals, community solar could be a good option. Visit our solar energy page to learn more.

Shopping for energy plans during a Texas summer

The tips listed above can help you cut your electricity usage, but there is still the matter of your electricity rate. If you need to shop for an energy plan right now, odds are you will be faced with paying a higher rate. Electricity rates in Texas are usually most expensive in the summer months.

If you are shopping for an energy plan in the summer, consider choosing a fixed-rate plan with a shorter contract. Fixed-rate plans let you lock in the price you pay for every kilowatt-hour of electricity you use. This means that even if rates continue to go up, you will be protected from price hikes. And by choosing a shorter contract, you will have more flexibility to search for a cheaper rate when prices come back down.

Variable-rate plans are also offered in Texas, but we do not recommend them during the volatile summer months. With these types of plans, the rate you pay is not secured and is determined by the market cost of electricity. So, while a variable-rate plan might offer a lower starting rate, that price could skyrocket if energy demand surges and drives the wholesale cost of electricity up.

If you are currently enrolled in an energy plan, we recommend that you stay put until energy demand comes back down. That will probably occur once the weather cools off in the fall and winter. Texas electricity prices are usually cheapest in the winter and spring. 

Whether you need an energy plan right now or want to wait and shop when rates are cheaper, the SaveOnEnergy marketplace is here to help. Enter your ZIP code above to explore current rates in your area.