Are commercial rates lower than residential?

Generally yes for energy (commercial buys at wholesale-adjacent rates), but demand charges add up. A small business that uses 1,000 kWh/month often pays a higher all-in rate than a residential 1,000 kWh customer because of demand and base charges that don't exist in residential plans.

Can I get a green commercial rate?

Yes — most major REPs offer 100% renewable commercial plans with REC matching. Premium is usually 0.5-1¢/kWh above conventional. Some Fortune 500 commercial customers buy directly from wind farms via PPAs (power purchase agreements), bypassing REPs entirely.

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Business · Commercial rates

Texas Commercial Electricity Rates — How They're Priced

Commercial rates in Texas are quoted in three flavors: fully bundled per-kWh (small commercial), block-and-index (mid-market), and unbundled (large commercial buys energy, capacity, and ancillary services as separate components).

Updated May 2026 Enri Zhulati 2 min read

Enri Zhulati 2 min read 238 words

Drivers of rate variation

Wholesale ERCOT zonal price (DCEN/HSEN/NCEN/SCEN/WCEN — your zone affects your floor), load profile shape (flat 24/7 load is cheaper than spiky daytime-only), credit risk (your business credit drives the REP's margin), and contract length (longer = lower rate but more wholesale risk).

What to compare across REP quotes

Per-kWh energy rate, demand rate (if applicable), monthly base charge, ancillary services markup, ETF formula, payment terms, contract escalators (some have automatic annual increases), and renewal terms. Always read the actual contract — quote summaries omit material clauses.

Typical rate ranges (2026)

Small commercial (under 10 kW peak): 11-16¢/kWh fully bundled. Mid-market (10-200 kW peak): 7-12¢/kWh energy + $5-$15/kW demand + TDU pass-throughs. Large commercial (200+ kW peak): negotiated, typically 6-10¢/kWh energy with separate capacity and ancillary lines.

The Bottom Line

Talk to a commercial advisor

Frequently asked.

Are commercial rates lower than residential?: Generally yes for energy (commercial buys at wholesale-adjacent rates), but demand charges add up. A small business that uses 1,000 kWh/month often pays a higher all-in rate than a residential 1,000 kWh customer because of demand and base charges that don't exist in residential plans.
Can I get a green commercial rate?: Yes — most major REPs offer 100% renewable commercial plans with REC matching. Premium is usually 0.5-1¢/kWh above conventional. Some Fortune 500 commercial customers buy directly from wind farms via PPAs (power purchase agreements), bypassing REPs entirely.

Editorial Standards

How we research and review.

Independently researched. Every claim is verified against primary sources (PUCT, ERCOT, EFLs).
No paid placement. Rankings are never influenced by advertising or referral compensation.
Reviewed by Enri Zhulati, Consumer Advocate. Plan data is pulled live from the electricrates.org API on every build and cross-checked against the EFL each REP publishes.

Read our full standards

Enri Zhulati

Consumer Advocate

Enri knows the regulations, the fine print, and the tricks some retail electricity providers use. He's spent nearly a decade learning how to spot hidden fees, misleading teaser rates, and contracts that sound good but cost more. He writes the guides that show you what they're hiding — his goal is to help Texans avoid the traps and find plans that actually save money.

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Sources

Public Utility Commission of Texas (PUCT) — Commercial Rate Filings
Electric Reliability Council of Texas (ERCOT) — Wholesale Market Reports
U.S. Energy Information Administration (EIA) — Texas Industrial Electricity Data
ComparePower.com — Real-Time Plan & Rate Database

Sources are cited for informational purposes. Data may have been updated since publication.

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