Commercial electricity in Texas, in plain English.
Texas lets your business choose who supplies its power. Here's how your rate is built, what the contract choices actually mean, and how to land a good one — without the jargon.
How buying business electricity works here.
Most of Texas is what's called a deregulatedmarket. In plain terms: one company owns the poles and wires and physically delivers your electricity, and a separate company — the one you choose — actually sells it to you. You can't change who delivers your power, but you can change who you buy it from, and that's where the price competition lives.
For most businesses, electricity is a big cost they've never really shopped. They signed once, the contract quietly renewed, and the rate drifted up. Comparing offers is the simplest way to stop overpaying — and because the delivery part is fixed, shopping is really just comparing the energy price and the supplier's markup.
There's no single "best" plan. A restaurant, a warehouse, and a medical office all use power differently, so the right contract looks different for each. The goal isn't the lowest advertised number — it's the plan that fits how your business actually runs.
What you're actually paying for. A business electricity bill isn't one charge — it's a few stacked together. Knowing the split tells you which parts you can shop and which are fixed no matter what.
ENERGY
55%
DELIVERY
28%
GRID SERVICES
11%
TAXES & FEES
6%
Energy is the power itself — the biggest piece, and the part that actually changes between suppliers. Delivery is what the local wires company charges to carry it to your meter. That one is set by the state and is identical no matter which supplier you choose.
Grid services, taxes, and fees are mostly pass-through — you pay them either way. So when you shop, you're really competing one thing: the energy price plus the supplier's markup. The percentages shift with your size; small users are delivery-heavy, big users tilt toward energy.
Three kinds of contracts. Almost every offer is one of these three. The right one isn't about price — it's about how much month-to-month surprise you can live with.
| Dimension | Fixed | Variable | Mix |
|---|---|---|---|
| Your price each month | Locked — same all term | Moves with the market | Mostly locked, partly floating |
| If there's a brutal summer | You're protected | Your bill can jump | Mostly protected |
| Budgeting | Easy — you know the number | Hard — it changes | Fairly easy |
| Best for | Most businesses that want no surprises | Experienced buyers who can ride the swings | Bigger sites that want a balance |
Bigger and steadier means cheaper. The more power you use — and the more evenly you use it — the lower your price per unit tends to be. These are rough examples, not quotes; your real number depends on your usage, your area, and timing.
| Dimension | Small | Medium | Large |
|---|---|---|---|
| Typical business | Shops, offices, restaurants | Big-box stores, mid-size plants | Large factories, campuses |
| Example price range | 9.2 – 10.8¢/kWh | 7.8 – 9.2¢/kWh | 6.8 – 8.2¢/kWh |
| How you get a price | A standard rate sheet | A custom quote | Competitive bids |
What actually moves your price — and how to lower it.
Suppliers price your business on a handful of things. Knowing them helps you compare fairly and gives you a couple of real levers.
How steadily you use power
A business that draws power evenly all day and night is cheap and predictable to supply. One that spikes hard for a few hours — then goes quiet — is more expensive, because the supplier has to cover those peaks. Flattening your usage (shifting non-essential equipment off your busiest hours) is one of the few ways to lower your rate without switching suppliers, and it pays off at every renewal.
How long you sign for
Longer isn't automatically cheaper. Suppliers build extra risk into multi-year deals, so a three-year price can land above a one- or two-year one. For most businesses the sweet spot is one to two years — long enough for stability, short enough to avoid paying for the far future.
When you lock in
Wholesale power prices move every day, mostly with the weather and the price of natural gas, and they climb in the Texas summer. You don't have to sign on the day your contract ends — a real buying process watches for a better moment. Here's how that process works, step by step.