Average Electric Bill in Texas

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Understanding the average electric bill in Texas is more than just knowing the numbers; it’s about understanding the factors that influence these costs and how they affect you as a consumer.

With rising prices impacting households across the U.S., including Texas, it’s crucial to grasp how electricity costs fit into the broader picture of your household expenses.

This article will explore the current state of electricity costs in Texas, the factors influencing these costs, and how Texans can navigate this landscape to find the most cost-effective solutions for their energy needs.

What is the average electric bill in Texas?

Households across the U.S. are feeling the strain of rising prices over the past year, including increased electricity costs. Texas residents are no different but may feel some relief due to the state’s deregulated energy market and competition for their business. How do Texans stack up in terms of monthly electric bills? And what factors influence the price of electricity?

Texas residential electricity prices

As of February 2024*, the average Texas home pays 14.61 cents per kilowatt-hour (kWh) for electricity, a price that’s 9.76% below the national average. For Texans, the average usage each month is 1,176 kWh, resulting in $171.81 for base electricity costs. Other factors, such as fees, delivery charges, and the amount of usage impact your residential electricity bill. Reading your Texas Electricity Facts Label will help you understand and estimate your monthly bill.

Larger homes naturally use more electricity, and the median home size in Texas is 2,000-plus square feet. Texas is the country’s largest energy consumer with its warm climate and increased demand due to its growing population. Look at the chart below to see average electricity usage and prices based on the size of your home. Often, the price per kWh decreases with higher consumption, but for comparison’s sake, the chart uses the average price per kWh in Texas.

A majority of Texans can shop around for a retail electric provider, not owned by a utility or cooperative. While savings can come from having options in the market, keep reading to learn about the other influences impacting the overall cost of electricity.

*Prices based on U.S. Energy Information Administration data, February 2024

3 factors influencing standard electricity rates

While it’s possible to calculate the average electric bill in Texas, it’s challenging to pinpoint and predict your bill due to three major factors: natural gas costs, company operating costs, and consumer usage.

Natural gas costs

What role does fuel play in driving up the cost of electricity? The answer: Most power generators own plants that burn natural gas. And natural gas prices jumped 48% in one month (July 2022) to historic 14-year highs due to depleted production, high demand, and world economic influences.

To pay for the gas to generate your electricity, companies offset the costs by passing it onto customers, which directly affects the rates that you are billed for service. Also, different companies have different methods of implementing fuel costs into your total bill, which can drive up the standard rate individuals are charged for energy.

Operating costs

Beyond fuel, operating costs like labor and maintenance are impacted by market conditions and the condition of the power plants. From a broad perspective, as the energy industry and fuel costs face fluctuations, the instability will be reflected in rising operating costs and higher rates.

Whether from equipment investments, line losses, meter readings, or a variety of other work-related charges, operating expenses add up for customers and can noticeably influence the final bill.

Consumer usage

Consumers can also play an important role in the electricity costs they face. When getting started, there are a variety of electricity plans to choose from, including fixed and variable plans.

These plans differ in the way they charge consumers, as the rate is ultimately calculated based on your own projected usage, the public’s average usage, or your personal monthly consumption. Some plans, as a result, mean customers could be overcharged by paying for estimated usage and not for actual energy used.

Diverse energy sources and plans in Texas

Texas’s energy market is fueled by a mix of sources, including renewable energy and traditional power. The EIA reports show a significant variation in average kWh usage, impacting both the average electricity rate and the monthly electric bill.

Homeowners in Texas can benefit from various incentives for installing solar panels or enhancing energy efficiency. These incentives not only support renewable energy usage but also contribute to securing the best electricity rates, reducing the average monthly electric bill.

Lower your average bill with Payless Power

Understanding the average electric bill in Texas, from bustling cities like Houston and Dallas to the expansive landscapes that define the Lone Star State, is about grasping the nuances of energy consumption and costs.

At Payless Power, our customers use 27% less energy than the average Texas customer. By leveraging technology, a daily notification system, and access to a variety of principal utilities around the state, Payless can provide affordable rates with no deposit required.

Payless Power customers can save with:

• No required deposit for many of our plans, resulting in instant savings of up to $400! Deposits commonly add up to 20% of your annual electricity bill, but it’s not required with Payless Power.
• Flexibility in payments, including prepaid electricity plans that allow you to pay in advance at your convenience (keeping in mind your paychecks and other bill schedules).
• Minimal early cancellation fees compared to other companies that have costly penalties.
• Fixed-rate plans that are six or 12 months that give you a guaranteed price per kWh for predictable budgeting, but aren’t lengthy 36- to 60-month contracts that lock you into a high rate.
• Convenient notifications via our customer portal help save hundreds annually by keeping them aware of daily usage and account balance, resulting in reduced energy consumption.

At Payless Power, we pride ourselves on offering competitive Texas electricity rates. Our energy plans are designed to meet the diverse needs of Texans, aligning with REP standards to offer the average homeowner cost-effective solutions to manage their energy bill.

Find savings with no money down and total control of your energy usage. Our prepaid electricity plans empower you to challenge the average electric bill in Texas. Start saving today!

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