A good electricity rate in Texas in 2024 is roughly 11 to 13 cents per kWh for a 1,000 kWh monthly usage level, based on current plan data from the Public Utility Commission of Texas (PUCT) Power to Choose database. If your bill shows a higher effective rate, you are likely overpaying and have options. If it shows a lower rate, read the fine print before celebrating.
This article explains how to measure a good rate, what the statewide average actually looks like, and which situations call for staying put rather than switching.
---
Why the Advertised Rate and Your Effective Rate Are Two Different Things
Retail electricity providers in Texas are required to file Electricity Facts Labels (EFLs) with the PUCT. Every EFL must disclose the average price per kWh at three usage levels: 500 kWh, 1,000 kWh, and 2,000 kWh per month.
The number you see in a provider's advertisement is almost always the 1,000 kWh figure. It looks clean and low. But that number can shift dramatically depending on your actual usage, because most Texas plans include a flat monthly base charge plus a per-kWh energy charge. Some plans also include a bill credit that only applies if you use at least a certain amount of electricity.
For example, a plan might show 11 cents per kWh at 1,000 kWh, but if you use only 700 kWh in a mild spring month, your effective rate could jump to 13 or 14 cents once the base charge is spread across fewer units. The PUCT's Power to Choose tool (powertochoose.org) displays all three usage-level prices for every certified plan, which is the correct starting point for any comparison.
---
What Is the Average Cost per kWh in Texas Right Now?
According to the U.S. Energy Information Administration (EIA), the average retail electricity price for Texas residential customers in late 2023 was approximately 12.5 cents per kWh. That figure covers all customers, including those on older variable-rate plans, those locked into long-term fixed-rate contracts, and those who have never switched from their default provider.
Within the deregulated zones served by ERCOT, which covers roughly 90 percent of the state's electric load, competitive fixed-rate plans from major providers were ranging from about 10.5 to 15 cents per kWh at 1,000 kWh in early 2024, depending on contract length, provider, and service territory.
Some context on what drives that spread:
- Contract length. Six-month plans sometimes undercut 12-month plans at signup, but they expose the customer to repricing risk at renewal.
- Renewable content. Plans sourced from 100 percent renewable energy certificates often cost 0.5 to 1.5 cents per kWh more than standard plans from the same provider.
- Provider type. Large incumbent providers such as Reliant, TXU Energy, and Green Mountain Energy tend to price toward the middle of the market. Smaller or newer entrants sometimes offer lower introductory rates.
- Timing. Wholesale electricity prices on ERCOT vary by season. Rates available in October or November tend to be lower than those available in June or July, when summer demand peaks.
---
How to Calculate Your Own Effective Rate
Your current electricity bill already contains everything needed to calculate your effective rate. The math is straightforward.
- Find your total bill amount, excluding taxes and delivery fees that are set by the utility (Oncor, CenterPoint, AEP, etc.) and are the same regardless of which retail provider you choose.
- Find your total kWh consumed for the billing period.
- Divide the total controllable charges (the portion that varies by provider) by total kWh.
For a cleaner comparison, use only the charges that appear on the retail provider's side of the bill. Transmission and distribution charges from your wires company are not something any retail provider can change.
If that number is above 13 cents per kWh at typical Texas household usage (around 1,100 to 1,200 kWh per month, per EIA data), the open market likely has better options available to you right now.
---
What Counts as a Bad Rate, and What Counts as a Good One?
A practical framework for Texas households in 2024:
Strong rate: Below 11 cents per kWh at your typical usage level. Plans in this range do exist, usually on 12-month fixed contracts with providers carrying solid PUCT complaint histories. Check the provider's complaint ratio on the PUCT website before signing.
Competitive rate: 11 to 13 cents per kWh. This is the mainstream range for fixed-rate residential plans. A household locking in anywhere in this band is close to the market average and is not being significantly disadvantaged.
Elevated rate: 13 to 15 cents per kWh. This is worth reviewing. You may be on an older plan, a variable-rate plan that has drifted up, or a default plan from a provider of last resort (POLR). Switching is worth investigating, though early termination fees on existing contracts should be factored in first.
Poor rate: Above 15 cents per kWh. At this level, the household is almost certainly paying materially more than the market average. The only situations that might justify staying are contracts with high early termination fees that would cancel out the savings from switching, or plans that include valuable bundled services the customer has priced out separately.
---
When NOT to Switch
Switching providers in Texas is straightforward, but it is not always the right move. Here are the situations where staying put is the more financially sound decision.
Your early termination fee exceeds your projected savings. If your current contract charges a $150 early termination fee and switching would save you $10 per month, you need 15 months of savings to break even. Do the math before contacting a new provider.
You are within 60 days of your contract renewal. Most Texas fixed-rate contracts allow cancellation within a window before the end date. Waiting for that window opens the option to switch without paying a fee.
Rates in the market are temporarily high. ERCOT spot prices spike during heat events. Providers often raise their retail offerings during high-demand periods. A rate that looks normal in July may look expensive by October. Unless there is an urgent reason to switch, households on expiring contracts may benefit from waiting for calmer market conditions.
Your current plan includes features that offset a slightly higher rate. Some plans include bill credits for low usage, free nights or weekends, or prepaid structures with no deposit. These features have real dollar value that a flat cents-per-kWh comparison will not capture on its own.
---
How to Find the Best Available Rate for Your Household
The PUCT's Power to Choose tool at powertochoose.org is the only state-certified comparison platform and is the correct first stop. It lists every plan available in your zip code from every certified provider, with the three standardized price points per plan.
When using the tool:
- Enter your zip code and sort by price at the usage level closest to your own typical monthly consumption.
- Read the EFL for any plan that looks attractive. The EFL is a one-page document that discloses all charges, contract length, and cancellation terms.
- Check the provider's PUCT complaint ratio, which is available in the PUCT's provider directory. A lower ratio relative to the provider's market share indicates fewer billing or service complaints per customer.
- Note the plan's renewable energy percentage if that matters to your household.
A household that completes this process systematically, rather than clicking on the first advertised rate, will almost always find a plan in the 11 to 13 cent range or better, and will have the documentation to hold the provider accountable if the bill does not match the EFL.
---
The Bottom Line
A good electricity rate in Texas is one that falls at or below the statewide residential average of roughly 12.5 cents per kWh (EIA, 2023), confirmed at the usage level closest to your own household consumption, from a provider with a clean PUCT complaint record, on a fixed-rate contract that protects against seasonal price swings. Any rate above 13 cents per kWh deserves a comparison check on Power to Choose. Any rate above 15 cents per kWh is almost certainly costing the household real money that the open market could recover.