The headline number

Q1 2026 was really two markets in one quarter. Winter Storm Fern brought extreme cold in late January; ERCOT met demand without calling for conservation, without an Energy Emergency Alert and with no systemwide outages, and prices came back down as the cold broke. We are not publishing a quarterly average settlement price here. The authoritative wholesale-price assessment for ERCOT comes from the Independent Market Monitor, Potomac Economics, and we’ll update when those Q1 figures are filed.

What is on the record is the forward market, which is the input side of the retail rates you see on marketing pages. By February 6, ERCOT Cal 2026 prices had fallen about 14% below pre-storm levels as the grid’s performance eased winter-reliability concerns, and January 2027 on-peak forwards were about 9% below pre-storm levels.

What that’s worth on a residential bill is smaller than a forward-curve headline suggests. Wholesale energy is one slice of what you pay: TDU delivery charges, REP margin and hedges already in place don’t move when the forward curve does. A softer market shows up as a better offer when you shop, not as an automatic cut to the plan you’re already on.

What changed in the market

Three forces converged this quarter.

  • A mild February kept demand below forecast, after Winter Storm Fern spiked January demand.
  • Natural-gas prices collapsed after the storm. The Henry Hub prompt-month contract peaked at $7.46/MMBtu on January 28 during Fern, settled at $3.01/MMBtu on February 18 (down about 60% from that high) and reached a six-month low of $2.82/MMBtu on April 2.
  • New capacity kept arriving. ERCOT's battery fleet crossed 15 GW in Q1, with about 1.1 GW of new storage reaching commercial operation during the quarter, according to Modo Energy, capacity that shaves the peaks just as demand dropped.

Retail electricity providers (REPs) typically hedge 6 to 12 months forward, so the full savings will reach customers through summer.

What it means for your bill

Here’s how to think about it at two common usage levels:

Your bill has two halves: the energy charge, which a softer wholesale market can shrink, and the TDU delivery charge, which doesn’t move with ERCOT prices at all. At 500 kWh the fixed monthly charges dominate, so a wholesale move barely registers. At 2,000 kWh the per-kWh energy rate does most of the work, so the same move is worth more in real dollars. That’s the reason to price offers at your own usage instead of at a headline rate.

All-electric homes (heat pump plus electric water heating) have the most to gain from shopping, because more of their bill is energy and less of it is fixed delivery charges, but the size of the saving depends on the offers live in your ZIP the day you shop.

What to do right now

  1. Pull your last 12 months of kWh usage from your current provider’s portal.
  2. Enter your ZIP and average usage on our comparison tool.
  3. Sort by total monthly cost, not advertised rate.
  4. Filter for 12 to 24 month terms to lock in today’s low wholesale prices.

The cheapest plan at 500 kWh is almost never the cheapest at 2,000 kWh. Shop the full-year cost, not the teaser.