Commercial electricity rates in Texas average 5.98 to 8.35 cents per kWh in August 2026, with promotional plans starting near 4.88 cents/kWh. But the number on the ad is rarely the number on the bill. TDU delivery charges reset on June 1, 2026, wholesale prices are still adjusting to summer demand, and small businesses that renew this month usually save more by locking a 12 to 24 month fixed plan now than by drifting into fall on a holdover rate.
This guide is written for Texas small business owners on the Ambit Energy Brand side, not for Ambit VIP consultants. Rates and market conditions cited are as of August 2026. Plan details vary and are subject to EFL and credit approval. Visit ambitenergy.com for current commercial plan availability by zip code.
Commercial electricity rates in Texas average 5.98 to 8.35 cents per kWh in August 2026, depending on the source and how "commercial" is scoped. According to Electric Choice (2026), Texas commercial rates from competitive retail providers average 5.98 cents/kWh, with the lowest advertised plans starting at 4.88 cents/kWh. According to Choose Energy (2026), the average business electricity rate in Texas is 8.3 cents/kWh, and small business rates run about 38% lower than the national business average of roughly 13.3 cents/kWh.
Those numbers do not disagree so much as they measure different pieces of the bill. Electric Choice reports the energy charge advertised by retail electric providers (REPs). Choose Energy is closer to an all-in EIA average that folds in the TDU delivery side. A Texas small business paying 5.28 cents/kWh in energy charges will still see a total per-kWh cost closer to 10 to 13 cents once TDU delivery, base fees, and taxes are on the bill.
Two more data points anchor the range. According to EnergyBot (2026), the average commercial rate in Texas is 6.71 cents/kWh and the cheapest commercial rate is 5.28 cents/kWh. According to Texas Commercial Plans (2026), the median commercial rate across 756 active competitive plans is about 6.8 cents/kWh on mid-length contracts and 11.9 cents/kWh on short-term contracts. Short-term plans are more expensive right now, not cheaper, and that pattern matters at renewal.
Three things are moving at once in August 2026, and each one nudges what a Texas small business will pay on renewal.
First, TDU delivery charges reset on June 1, 2026. According to Elite Energy Consultants (2026), Oncor's new delivery rates took effect June 1, 2026 and moved up roughly 7 to 8%, with some accounts seeing a retroactive catch-up charge. According to Energy Texas (2026), CenterPoint's delivery charge dropped about 16.7% in the same window, TNMP's rose about 12.48%, and Oncor's climbed about 0.63% on a separate tariff line. That is a real bill event: on a 5,000 kWh per month load, a 1 cent/kWh delivery shift changes the annual bill by roughly $600.
Second, wholesale prices are behaving like a normal Texas summer. The ERCOT grid held above 91 gigawatts of demand during the July 2026 heat wave (Energy News Beat, 2026), and analysts continue to expect summer scarcity pricing to fade in the shoulder months. According to Yes Energy (2026), GridSite's Winter 2026 long-term forecast projects lower ERCOT prices and reduced interzonal volatility into 2027. In practical terms, a business signing today is buying a curve that includes today's summer premium and next spring's softer prices.
Third, load and generation are still growing. According to Energy Ogre's Q1 2026 Texas market update, ERCOT is planning around continued demand growth (data centers, oil and gas electrification, general population) and a heavier battery buildout that changes how peak hours get priced. That does not mean a small business should wait it out. It means the shape of contract offers is shifting, and mid-length terms are now often priced under the 3 to 6 month teaser.
The same commercial plan can post a very different total on the bill depending on which TDU delivers power to the building. Delivery charges are set by tariff (approved by the PUCT) and do not change based on the retail provider you pick, so they are effectively fixed for the term of your plan.
Here is the current delivery picture for small commercial service, August 2026:
| TDU service area | Delivery energy charge (cents/kWh) | Fixed monthly charge | Typical all-in small business range |
|---|---|---|---|
| Oncor (Dallas / Fort Worth) | 6.03 | $4.06 | 7.8 to 9.5 cents/kWh |
| CenterPoint (Houston) | 5.15 | $4.90 | 8.0 to 9.8 cents/kWh |
| AEP Texas Central (Corpus, Rio Grande Valley) | 5.83 | $3.24 | 7.8 to 9.5 cents/kWh |
| AEP Texas North (Abilene, San Angelo) | 5.67 | $3.24 | 7.8 to 9.5 cents/kWh |
| TNMP (parts of DFW, Gulf Coast, West Texas) | 6.47 | $7.85 | 8.2 to 10.0 cents/kWh |
Sources: BKV Energy (2026), EnergyBot (2026), Energy Ogre (2026).
Two things to notice. TNMP is currently the highest-cost delivery territory for a Texas small business, both because of the higher fixed monthly charge and the higher per-kWh delivery rate. CenterPoint's tariff fell in the 2026 update, which means Houston-area small businesses can actually see a lower all-in rate this month than they did last summer, even at a slightly higher energy charge. For a line-by-line walkthrough of every TDU charge on the bill, see the TDU Delivery Charges Explained breakdown.
A residential Texas bill has three main pieces: an energy charge (cents/kWh), a TDU delivery charge, and a small base fee. A small commercial bill has the same three, plus a demand charge on many rate schedules. Demand charges are a monthly fee based on the single highest kilowatt (kW) demand reading during the billing cycle, and they can be a bigger driver of the total than the energy charge itself for medium-usage accounts.
Demand charges are why load factor matters. According to ComparePower (2026), Texas business electricity costs vary widely by zip code, and a 500 kW operation in Houston and the same operation in Dallas can see very different total costs because demand tariffs differ. A restaurant with two heavy lunch spikes has a lower load factor than a warehouse that runs steady all afternoon, and the restaurant pays more per kWh even if the energy charge is identical.
For most true small businesses (under about 50 kW peak demand and under 100,000 kWh per year), the bill will look residential-adjacent: no separate demand charge, a single energy rate, and delivery. That is why commercial electricity rates advertised around 5 to 6 cents/kWh mostly apply to small commercial accounts. Larger accounts almost always price on a custom quote with demand charges baked in.
There is no single right answer, but there are useful bands. Based on the August 2026 market:
The all-in number that hits the bank account is closer to 10 to 12 cents/kWh once delivery, base fees, and taxes are added in. Anything above 14 cents/kWh on a small business bill is a sign the account either lapsed onto a holdover or is on a variable plan that has caught the summer price spike.
The single most expensive small business mistake I see is running out the current contract and letting the plan roll to a holdover rate. According to Enri Zhulati, a consumer advocate and author at ComparePower (2026), holdover rates commonly run 2 to 3 times the plan rate. A Texas business that misses the renewal window by even 30 days can watch the effective per-kWh cost jump from 6 cents to 15 cents overnight.
The other mistake is renewing too early. Sign a 36 month deal in April, and the June TDU reset can leave money on the table. Sign in the middle of a July heat wave, and the summer risk premium is baked into the offer.
That is why I use a simple Renewal Window Framework for Ambit small business accounts. Five steps:
| Plan type | Energy charge behavior | Best fit right now |
|---|---|---|
| Fixed rate (12 to 36 months) | Locked cents/kWh for the term | Almost every small business under 100,000 kWh per year |
| Variable rate (month to month) | Provider can change the rate each cycle | A business planning to move or close within 6 months |
| Indexed rate (tied to a wholesale index) | Rate rises and falls with ERCOT settlement points | Businesses with the staff to actively hedge; rare for a true small business |
| Time-of-use | Cheaper off-peak, more expensive during ERCOT peaks | Businesses with a majority-nighttime load shape |
For most Texas small businesses in August 2026, fixed rate is the answer. The wholesale market is doing normal summer things, and index exposure is not worth the operational overhead for a business under 100,000 kWh per year. According to David Kinchen, COO of Energy Ogre and author of the firm's Q1 2026 market update, expected wholesale price softening into 2027 makes a 12 to 24 month fixed lock the cleanest place to sit through the coming shoulder season.
Every REP in Texas has to publish an Electricity Facts Label for each commercial plan. Six numbers on that label decide what the plan actually costs:
For a deeper walkthrough with a residential lens, see How to Read Your Texas Electricity Facts Label. The same six numbers apply on commercial plans, in the same order.
Texas's deregulated retail electricity market lets a small business shop any REP that serves its zip code. Find your TDU first (Oncor, CenterPoint, AEP, TNMP), because every quote you receive will use that TDU's tariff on the delivery side.
Red flags to watch: a "3 month teaser" rate that resets to a higher variable rate, bill credits that only trigger inside narrow usage bands (for example 999 to 1,001 kWh), and any offer without a printed EFL. According to Tommy Richardson, a certified Energy Management Professional at EnergyBot (2026), the most common overpayment pattern in small commercial is a business that never reviews the EFL and never negotiates renewal terms, leaving 10 to 25% on the table every year. For a residential-side view of the same shopping mechanics, see Cheapest Electricity Rates in Texas Right Now.
Ambit Energy has served Texas households and small businesses since 2006. VIP Energy Service is the local Ambit consultant organization that walks small business owners through the renewal decision the way I have walked through it above: pulling real usage, benchmarking against current market rates, matching the term to the ERCOT outlook, and locking BEFORE the holdover hits.
If you want a plain-English quote against your own usage, request a small business quote and share your service address and last 12 months of usage. I will price the all-in rate at your load, not a generic template. Plan details vary and are subject to EFL and credit approval; energy facts label available for every plan.
The cheapest advertised commercial rates in August 2026 start near 4.88 cents/kWh (Electric Choice, 2026). But cheapest advertised is rarely cheapest at your usage: a 5.29 cents/kWh plan with a $50 monthly base charge will beat a 4.88 cents/kWh plan with a $10 base charge only above about 3,500 kWh per month. Always compare the average price at your monthly usage.
An energy charge between 5.9 and 6.8 cents/kWh on a 12 to 24 month fixed term is the middle of the market for a Texas small business in August 2026. All-in, with TDU delivery, base fees, and taxes, 10 to 12 cents/kWh is a fair total.
The energy charge on commercial plans is usually lower than residential per kWh, because commercial buyers use more electricity and providers compete for the load. The all-in cost is closer, once demand charges (on larger accounts) and base fees are added.
Wholesale prices are expected to soften into 2027 (Yes Energy, 2026), but TDU delivery charges reset every June and generally trend up as the grid expands. The practical read for a small business: fixed rates in August 2026 are unlikely to be dramatically cheaper by October or November, and holding a lapsed contract on a holdover rate is more expensive than either.
The switch itself is usually processed on the next meter read after the request, so most switches complete within 15 to 30 days. There is no power interruption; the same wires deliver electricity under the new plan. For a deeper look at how the state grid keeps supplying power through summer peaks, see the Utility Dive coverage of ERCOT and the ERCOT market summary.
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