With shopping for Texas electricity plans in 2026, it is nearly like being in a store with 1,800 different price tags and no clear way to know what you will actually pay. On any given week, state-run shopping site Power to Choose lists almost that many active plans, and the headline cents per kWh figure at the top of each listing is nearly never what your end-of-the-month bill will look like.
The good thing is that once you know what the rate actually hides, comparing Texas electricity plans becomes easier. This guide covers the five plan types Texans shop for, the Real-Rate Framework we apply to estimate plan prices based on actual billed rates, and the seven questions any household must answer before enrolling. Rates cited in this guide reflect market conditions as of July 2026. Plan details and rates subject to change; energy facts label available on each provider site.
Every listing on Power to Choose fits into one of five categories. For your household, it is much more important to select the proper category than to select the cheapest option within the incorrect category.
1. Fixed-rate plans. The energy charge will remain constant for the entire term of the contract, which is typically 12, 24, or 36 months. This option is predictable and budget-friendly, and is the default recommendation for most Texas households according to consumer education sites.
2. Variable-rate plans. These plans allow providers to change rates at will from month to month. These plans often start off at a cheap rate, but then the rate tends to increase after some time. This is why they are advertised as month-to-month plans after a fixed-rate contract ends.
3. Indexed plans. These plans tie your rate to a published index which usually tracks day-ahead wholesale prices in the ERCOT market. According to Utility Dive market summaries, load-weighted wholesale prices averaged about $47 per MWh across 2025. While that sounds cheap, be prepared for a cold snap in February when prices jump to the market cap.
4. Plans with Free Nights or Free Weekends (time-of-use). For these plans, energy charges are zero for defined time windows (typically from 8 p.m. to 6 a.m., or all weekend). Outside this window, the price rises above the market average. Consumer explainers note that these plans can only be economically beneficial if customers move their laundry, dishwasher runs, and EV charging to the free periods. Our breakdown of free nights vs free weekends walks through the math.
5. Prepaid plans. There is no deposit, no credit check, and no long-term contract. Instead, these plans offer a higher per-kWh rate and little to no protection if the provider hikes their rates or if you get close to being out of funds.
When Power to Choose first launched, it aimed to make the Texas retail electricity market more transparent. Unfortunately, the way the site has presented plans has taught a whole generation of consumers to look at the wrong number.
The rate shown at the top of every listing is called the "advertised rate at 1,000 kWh," which means it is the total bill at exactly 1,000 kWh of monthly usage divided by 1,000. There are three things it distorts, and two things it does not include:
Although Power to Choose uses its own TruBill estimator to smooth some of this out, it still assumes a stylized usage curve. Your bill is a reflection of your household, not a curve on a state website.
Every Texas electricity bill consists of five layers. Add them up in this order, and you get the number that will actually appear on your statement.
Layer 1: The energy supply rate. This is the cents per kWh that the retail electric provider (REP) charges for the electricity itself. Depending on the length of the contract and the plan type, this can range from about 8 cents to more than 20 cents.
Layer 2: The TDU delivery charges. The transmission and distribution utility (Oncor, CenterPoint, AEP Texas, TNMP) delivers to all homes in their service areas regardless of which REP you purchase electricity from. Delivery charges range from roughly 30 to 40 percent of a typical Texas residential bill in 2025 and 2026, per Just Energy's rate breakdown. The delivery charge per kWh sits in the 3.2 to 4.1 cents range, plus a base monthly charge from $5 to $9. See our recent TDU delivery-charge update for the June 2026 change.
Layer 3: Base monthly charges from the REP. Many plans include a $9.95 or $12.95 monthly base fee that hits the same way whether you use 500 kWh or 3,000 kWh. On a small apartment bill, that base fee alone can add 2 cents to the effective rate.
Layer 4: Conditional bill credits. A plan that appears outstanding at 1,001 kWh and mediocre at 999 kWh will likely have a $75 or $100 monthly credit that only triggers between 1,000 and 2,000 kWh. This is where most Texans get burned.
Layer 5: Time-of-use structure. If a plan has an indexed component, free nights, or free weekends, your bill will depend on when you use electricity, not just how much. A daytime-heavy household on a free-nights plan can pay 3 to 5 cents more per kWh than a fixed-rate shopper next door.
Total every layer at your actual monthly usage to see the real rate. That is the figure to compare with other plans.
The TDU delivery charge is a mystery to most Texans reading their electric bill. These charges are on all bills, regardless of whether you buy from Ambit, TXU, Reliant, or any other REP, because the physical wires belong to the utility, not the provider.
Most Texas TDUs adjust their delivery rates around June each year. With Oncor, for example, delivery charges increased by almost 0.5 cents per kWh between March and June (as of June 2026). Rate changes like this happen on a regular schedule, and every household in the utility's territory sees them roll through their bills. The Public Utility Commission of Texas (PUCT) approves the tariffs for delivery rates, and you can find reports on system reliability and market data at ercot.com. See our coverage of the Oncor rate increase in 2026 for the household impact.
There are two key points to keep in mind when shopping. First, when you are comparing two plans on the same Power to Choose listing, you are making a fair apples-to-apples comparison, because they all include the same TDU line. Second, once you have chosen a plan, TDU adjustments will still be applied to your bill, even if your supply rate is locked. If your neighbor's bill increased in June, the plan you signed is not the reason: TDU delivery is most often the culprit.
The pitfall we see most frequently on the Ambit team is what we call the 1,000 kWh trap. One common plan structure in the market advertises a rate of 9.8 cents per kWh at 1,000 kWh because a $75 bill credit is applied at that usage. If you sit at 999 kWh, though, the credit disappears and the effective rate spikes over 17 cents. Then at 2,000 kWh, the same credit reduces the effective savings per kWh to 3.75 cents, and the rate drifts back up.
Texas Electricity Ratings' TruBill breakdowns show this exact behavior across many currently marketed plans. Their published rate tables illustrate a plan whose effective rate is 16.9 cents at 250 kWh, drops to 11.9 cents at 1,000 kWh, and climbs back to 13.4 cents at 3,000 kWh. That is not a rate; that is a rate curve. Our EFL walkthrough for free nights plans shows the same effect in a different plan family.
A practical rule is this. Pull the highest bill from last summer (usually July or August) and the mildest bill from last winter (usually November or March). Those two numbers bracket your household. If a plan looks great at 1,000 kWh but ugly at 2,000 kWh, and you consistently reach 2,000 kWh in August, that plan is not for you.
Once you understand the Real-Rate Framework, matching a plan type to your household is straightforward.
The cheapest plan and the plan that is "right for you" are almost never the same plan.
ERCOT's demand outlook for 2026 is an outlier. The Energy Information Administration's 2026 electricity outlook projects a large ERCOT load increase this year, driven mainly by data center connections and continued population growth across the DFW, Houston, and San Antonio metros. On June 18, 2026, the Public Utility Commission of Texas approved ERCOT's Batch Zero process for managing large-user connection requests, a framework covered by Reuters and the Texas Energy Report.
For households, the practical implication is that demand rising into a supply base that has not grown as fast means wholesale price volatility will keep increasing. Variable and indexed plans that looked appealing in 2023 and 2024 are riskier bets going into the summer of 2026 and beyond. Fixed rates carry a premium over the current market, but that premium is what you pay for insulation from a July peak-price event.
Consumer advocates including Alison Silverstein, a longtime Texas grid analyst who has served as a senior advisor to federal energy regulators, have consistently argued that residential shoppers underestimate market volatility. Beth Garza, who ran the ERCOT Independent Market Monitor at Potomac Economics, has published similar warnings about the way retail rate structures obscure wholesale risk.
Before you click enroll on any Texas electricity plan, run through this checklist.
If a plan cannot answer question 1 cleanly from its Electricity Facts Label (EFL), that is the answer.
Are fixed-rate plans always cheaper than variable-rate plans in Texas?
No. Variable plans can be cheaper when wholesale prices are low, but they expose you to spikes when the ERCOT market tightens. Fixed rates are cheaper over a full 12-month cycle for most Texas households because they smooth out summer peaks.
What percentage of my Texas electricity bill is TDU delivery charges?
Delivery charges from Oncor, CenterPoint, AEP Texas, or TNMP make up roughly 30 to 40 percent of a typical residential bill, per Just Energy's 2025 rate breakdown. The percentage is higher for low-usage households and lower for high-usage households.
Why does the same plan cost different amounts on Power to Choose than on the provider's own site?
Power to Choose shows the effective rate at 500, 1,000, and 2,000 kWh with TDU charges and bill credits included. Provider sites often show the base energy rate before delivery charges and credits, which is why the numbers look different. Always compare the total estimated bill, not the headline rate.
Is Power to Choose the only place to compare Texas electricity plans?
No. Power to Choose is the official state site, but private aggregators like ChooseTexasPower and Texas Electricity Ratings publish more detailed tools including bill credit modeling and Safe-Rate scoring. Using two sources is the safest way to catch a plan that looks great on one site and terrible on another.
Comparing Texas electricity plans in 2026 comes down to one thing: knowing the layers underneath the headline rate. Once you can price out a plan against your own usage (not the 1,000 kWh average) you can shop with confidence and stop paying for structure that does not fit your household.
Ambit Energy has been serving Texas families since 2006, and our consultants can walk you through the Real-Rate Framework against your specific bill. If you want a plan sized to your home and not to a spreadsheet on a state website, request a personalized quote and we will run the math with you. Visit ambitenergy.com for full plan disclosures.
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