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Updated: May 4, 2023
Texas Electricity Prices
The U.S. Energy Information Administration (EIA) reports declining electricity demand during spring months. Coal-fired power plants are expected to generate significantly less electricity this spring, while nuclear generation remains stable.
The growth in renewable energy, particularly solar, is noteworthy and expected to continue contributing to lower wholesale power prices in 2023.
What is a good price per kWh in Texas?
The lowest fixed-rate electricity plan today starts at 8.80¢/kWh.
That’s significantly lower than the average Texas residential electricity rate, which stands at 14.46 ¢/kWh.
Texas Electricity Prices (Updated Daily)
Find the most affordable electricity rates today for different residential energy usage patterns.
Will Texas electricity prices go down in 2023?
According to industry reports and predictions, wholesale power prices are expected to decline this year due to the drop in natural gas prices and the expansion of cheap renewable electricity.
While Texas is predicted to have the largest drop in energy prices, it is important to note that savings may not be passed onto consumers until later due to the lag between wholesale and retail pricing.
EIA Short-Term Energy Outlook
In its latest Short-term Energy Outlook report for April 2023, the U.S. Energy Information Administration (EIA) reports a decline in electricity demand during spring months, which allows power plants to undergo maintenance.
Coal-fired power plants are expected to generate significantly less electricity this spring, while nuclear generation remains stable. The growth in renewable energy, particularly solar, is noteworthy and expected to lower wholesale power prices in 2023.
Lower natural gas costs are a significant factor in the EIA’s forecast for reduced wholesale power prices in 2023. The on-peak wholesale price at the North hub in Texas’s ERCOT power market is expected to average about $35 per megawatt-hour (MWh) this year, compared to nearly $80/MWh in 2022.
The EIA forecasts a 17% decrease in U.S. coal-fired generation this spring compared to the same period in 2022, primarily due to coal plant retirements and lower natural gas prices. In contrast, nuclear generation is expected to remain stable, with a slight 1% increase compared to last spring.
Declining Electricity Demand
As the spring season sets in, electricity demand in the U.S. usually declines due to the reduced need for air conditioning and heating. This period allows power plant operators to perform maintenance on their generating units, especially for thermal plants and nuclear generators. Meanwhile, the output from renewable energy sources, especially wind, typically increases due to stronger winds.
Changes in Electricity Generation Sources
The EIA forecasts a 17% decrease in U.S. coal-fired generation this spring compared to the same period in 2022, primarily due to coal plant retirements and lower natural gas prices. In contrast, nuclear generation is expected to remain stable, with a slight 1% increase compared to last spring.
The Rise of Renewable Energy
Coal’s contribution to U.S. electricity generation is predicted to decrease from 20% in 2022 to 17% in 2023, while natural gas remains constant at 39%. The nuclear share of generation will rise slightly from 19% in 2022 to 20% in 2023. Most notably, the generation from renewable energy sources is expected to increase from 22% last year to 24% this year, mainly due to a 38% increase in new solar capacity.
Impact on Wholesale Power Prices
Lower natural gas costs are a significant factor in the EIA’s forecast for reduced wholesale power prices in 2023. The on-peak wholesale price at the North hub in Texas’s ERCOT power market is expected to average about $35 per megawatt-hour (MWh) this year, compared to nearly $80/MWh in 2022.
Electricity Prices on ComparePower
Throughout the last decade, Texas electricity prices have been volatile. With endless options and multiple prices for each plan, finding the right one for your home can feel impossible.
Our fellow Texans needed a solution, and ComparePower was born to help you sift through the hundreds of electricity plans available throughout the state.
While we built our name with powerful tools to help you find the best plan for your home and checkout with confidence in your choice, we are proud to offer you plans that beat average Texas prices daily.
Source: U.S. Energy Information Administration
Love it what more can I say! Easy to navigate and see realistic pricing from every possible angle!
Amy L. (TX, United States)
Texas Electricity Prices for June 2023
The average Texas residential electricity price is 14.46 ¢/kWh, 8.78% less than the U.S. average.
The average Texas commercial business electricity price is 9.13 ¢/kWh, 27.03% lower than the U.S. average.
Updated June 2023
How to Choose the Best Electricity Plan in Texas
With many options available, selecting the best electricity plan can be overwhelming. To simplify this process, consider the following factors when evaluating different plans and providers:
- Electricity Rate: Compare the price per kilowatt-hour (kWh) for various plans. A lower rate may save you money in the long run. However, be cautious of teaser rates that may be valid for only a few months before increasing significantly.
- Contract Length: Choose a contract length that fits your needs. Short-term plans offer more flexibility, while long-term plans lock in a rate for an extended period, protecting you from market fluctuations.
- Renewable Energy Content: If you prioritize environmental sustainability, look for plans with a high percentage of renewable energy, such as wind or solar.
- Usage Patterns: Consider your household’s energy consumption habits, including peak and off-peak hours. Some plans offer lower rates during specific times, which can help you save money if you adjust your usage accordingly.
- Extra Fees: Be aware of hidden fees, such as early termination or additional charges for exceeding a certain usage level. These costs can add up and negate any savings you might achieve with a lower rate.
- Customer Reviews and Ratings: Research customer reviews and ratings of the electricity providers you are considering. This information can give you an insight into the quality of service and customer support they offer.
Factors That Influence Electricity Prices
Several factors influence electricity rates in Texas. These include the cost of producing and distributing electricity, the demand for electricity, government regulations, weather conditions, and the availability of natural resources.
Production and Distribution Costs
The cost of producing and distributing electricity can vary depending on the type of fuel used, the infrastructure, and the cost of labor.
In Texas, most electricity is generated by natural gas, coal, and wind power. Natural gas and coal prices can fluctuate depending on supply and demand.
Demand for Electricity
The electricity demand can also affect electricity prices. During peak times, such as hot summer afternoons, the demand for electricity increases, and prices can rise for those on variable-rate energy plans.
Conversely, prices can be lower during low energy demand, such as mild spring days.
Government Regulations
Government regulations can also affect electricity prices. For example, regulations promoting renewable energy sources can increase electricity production and distribution costs, leading to higher prices.
Weather Conditions
Weather conditions can also play a significant role in electricity prices. In Texas, hot summers can increase energy demand for air conditioning, leading to higher prices.
Similarly, cold winters can lead to increased energy demand for heating, which can also lead to higher prices.
Availability of Natural Resources
Texas is rich in natural gas and wind resources, which can provide cheap and stable electricity.
However, the availability of these resources can be affected by weather conditions, environmental regulations, and other factors.
Choosing the Right Electricity Plan
Choosing the right electricity plan can help you save money. A fixed-rate energy plan may be your best option if you prefer stability in your energy bills.
With ComparePower, you can easily shop for a fixed-rate electricity plan with your kWh usage.
Why is your kWh usage important? Electricity prices are based on how much energy you consume each month.
Providers typically offer different prices for different usage levels, so knowing your kWh usage is important to compare rates accurately.
Check out this short 2-minute video to learn how to shop with your usage on ComparePower ⤵️
Texas Electricity Prices FAQs
The declining electricity demand during spring months, growth in renewable energy, and lower natural gas prices all contribute to a favorable electricity price forecast for Texas in 2023. As a consumer, this presents an opportunity to consider renewable energy plans and lock in lower rates for your electricity needs. Enter your zip code to compare different electricity plans and providers in your area and make an informed decision that suits your energy usage habits and budget.
Here are the most common questions we are asked about Texas Electricity Prices: