A kilowatt-hour (kWh) is a unit of energy equal to 1,000 watts consumed continuously for one hour. It is the single measurement on which every line item of a Texas electricity bill is based. Know what a kWh is, know how many your household uses each month, and the rest of bill mechanics follows directly.
What a kWh measures
The prefix "kilo" means 1,000. A watt measures the rate at which a device draws electricity. A kilowatt-hour multiplies that rate by time: one kilowatt (1,000 watts) sustained for one hour equals one kWh.
A few concrete examples put the unit to scale. A 100-watt incandescent bulb running for 10 hours consumes 1 kWh. A 3-ton central air conditioner drawing 3,500 watts running for roughly 17 minutes consumes about 1 kWh. An electric clothes dryer on a typical 45-minute cycle consumes roughly 4 to 5 kWh.
Your electricity provider does not charge for watts. It charges for kilowatt-hours, because that is what costs money to generate, transmit, and deliver to the meter.
How kWh appears on your Texas electric bill
A Texas residential electric bill has two main charge categories: delivery charges (owed to the transmission and distribution utility, or TDU, that owns the wires) and energy charges (owed to your retail electricity provider, or REP).
Both categories express costs partly in dollars per kWh and partly in fixed monthly fees. The delivery charge per kWh is set by the TDU and is not negotiable by the customer. The energy charge per kWh is set by the REP and is what changes when a customer switches plans or providers.
The Public Utility Commission of Texas (PUCT) requires every REP to publish an Electricity Facts Label (EFL) for each plan. The EFL discloses the average price per kWh at three usage levels: 500 kWh, 1,000 kWh, and 2,000 kWh per month. The figure at 1,000 kWh is the benchmark most commonly cited in marketing materials, but customers whose usage falls well above or below that level may pay a meaningfully different effective rate.
For example, a plan with a 9.5 cent per kWh energy charge and a $9.95 monthly customer charge produces an effective rate of roughly 11.5 cents per kWh at 500 kWh, because the fixed fee is spread across fewer units. At 2,000 kWh the same math yields an effective rate closer to 10 cents. Reading the EFL at the usage tier that matches your actual habits is more informative than the headline rate alone.
What does a kWh cost in Texas?
According to the U.S. Energy Information Administration (EIA), the average Texas residential retail electricity price was approximately 14.5 cents per kWh in 2024 (EIA Electric Power Monthly). That average blends fixed-rate plans, variable-rate plans, and indexed plans across every REP in the ERCOT service territory.
Actual plan prices on the Power to Choose marketplace, administered by PUCT, ranged from roughly 11 cents to 18 cents per kWh at 1,000 kWh usage in mid-2025, depending on contract length, provider, and TDU service area. Customers served by Oncor (Dallas-Fort Worth area) generally see lower delivery charges than customers served by AEP Texas (West Texas), which affects the blended effective rate even when the REP's energy charge is identical.
Variable-rate plans carry no locked energy charge. During ERCOT grid stress events, variable rates have exceeded 20 cents per kWh in summer months. Fixed-rate plans lock the energy component for the contract term, typically 12 to 24 months, and protect against those peaks.
What uses the most kWh in a Texas home
The EIA estimated that the average Texas residential customer used about 1,176 kWh per month in 2023, one of the highest averages in the country, driven largely by air conditioning demand (EIA, 2023 Residential Energy Consumption Survey preliminary data).
The largest contributors to a typical Texas household's monthly kWh total:
Central air conditioning. A 3-ton central AC unit draws roughly 3,500 watts. Four hours of daily runtime generates about 14 kWh per day, or 420 kWh over a 30-day month. During Texas summers, eight or more hours of daily runtime is common, pushing AC contribution above 840 kWh per month.
Electric water heating. A standard 4,500-watt electric storage water heater running about two hours per day uses roughly 270 kWh per month. Heat-pump water heaters can cut that figure by 60 to 70 percent at equivalent hot-water output.
Refrigeration. A modern Energy Star refrigerator uses 400 to 600 kWh per year, or 33 to 50 kWh per month. A unit from 2005 or earlier may use twice as much for the same interior volume.
Lighting. A home fully converted to LED bulbs typically uses 50 to 100 kWh per month on lighting. The same square footage with incandescent bulbs can use 300 to 500 kWh.
Laundry and dishwasher. An electric dryer uses about 5 kWh per cycle. A dishwasher with a heated dry setting uses about 1 to 1.5 kWh per load.
Targeting the HVAC system or water heater for efficiency improvements generally produces larger bill reductions than switching to LED lighting, though LED conversion carries a lower upfront cost and faster payback.
Why the effective price per kWh varies by plan
Three plan structures produce different effective prices even when stated rates appear similar:
Flat-rate plans charge one energy rate at any usage level. They are the most common plan type in the Texas retail market and the simplest to budget.
Tiered or bill-credit plans apply a credit once monthly usage crosses a specific threshold, typically 1,000 kWh or 2,000 kWh. This creates a step change in the effective price curve. A customer using 900 kWh who has not reached the credit threshold may pay a higher effective rate than a customer using 1,100 kWh who qualifies for the credit.
Time-of-use (TOU) plans price kWh differently depending on the hour. Peak hours, typically 3 p.m. to 8 p.m. on weekdays, carry a premium rate. Off-peak hours, including overnight, carry a discounted rate. ERCOT's real-time pricing infrastructure supports TOU plans, and several REPs currently offer them. Households that can shift dishwasher cycles, laundry, and electric vehicle charging to overnight hours can reduce the effective price they pay per kWh under this structure.
When comparing plans, calculate the effective price at your actual usage rather than relying on the 1,000 kWh EFL figure. Divide the total estimated monthly bill (energy charge times your actual kWh, plus all fixed fees, minus any applicable credits) by your actual monthly kWh to produce a true comparison number.
How to find your kWh usage history
Texas utilities are required to provide customers with at least 24 months of usage history. The most reliable source is SmartMeterTexas.com, a PUCT-mandated portal that aggregates interval meter data from every TDU in the ERCOT service territory. Customers can download daily or 15-minute interval usage data at no charge, with no special enrollment beyond an account verification step.
Reviewing 12 months of kWh history before shopping for a new plan is the most practical step a customer can take to select a plan matched to actual usage. A customer who averages 1,800 kWh per month in summer but only 700 kWh in winter should compare plans at both levels, not only at the 1,000 kWh midpoint shown on the EFL.
When kWh knowledge changes the switching decision
Understanding kWh usage points toward switching in some situations and against it in others.
A customer currently on a fixed-rate plan at 12 cents per kWh with 10 months left on a 12-month contract should weigh the early termination fee against potential savings. Most Texas ETFs run between $100 and $250, per PUCT-regulated contract terms. A savings of 1 cent per kWh at 1,200 monthly kWh yields $12 per month. At that pace, the payback period on a $150 ETF stretches to more than 12 months, which may exceed the time left on the current contract.
A customer on a month-to-month variable plan paying 15 cents per kWh or more carries no ETF exposure. Comparing fixed-rate options is warranted, since 12-month fixed plans in that rate range are available on the current market.
The kWh is the fundamental unit on a Texas electricity bill. Every dollar figure on that bill traces back to how many kilowatt-hours were consumed and at what rate each one was priced. Reading the EFL at your actual usage level, checking your history on SmartMeterTexas.com, and calculating the effective rate at realistic usage produces a more accurate comparison than the headline figure alone.