Commercial electricity rates in Texas run roughly 7 to 9 cents per kWh in 2026, according to aggregated EIA commercial-sector pricing for the state, before delivery charges are added. That energy rate is only half the bill — transmission and distribution utility (TDU) fees, billed separately by companies like Oncor, CenterPoint, AEP, and TNMP, are the hidden line most rate comparisons skip entirely.
- Commercial electricity rates in Texas average 7 to 9 cents per kWh in 2026, before TDU delivery charges.
- Fixed-rate contracts lock a price for 12 to 36 months; indexed and variable plans float with the ERCOT market.
- TDU delivery charges are billed separately from the energy rate and vary by service territory, not by provider.
- A reverse auction across multiple retail electric providers, run by a broker, typically beats a single-provider quote.
Why this matters
Texas businesses don't buy electricity from a single utility. Since deregulation, most commercial accounts inside ERCOT territory choose from dozens of retail electric providers (REPs), each pricing the same load differently depending on contract length, usage pattern, and how the wholesale market looked the day you signed.
That means two businesses on the same street, drawing similar power, can pay meaningfully different rates simply because one locked a 24-month fixed contract during a low-price window and the other renewed on a month-to-month plan after a contract lapsed. Texas Electric Broker runs a reverse auction across competing REPs so a business sees the spread across providers before signing, instead of negotiating one quote at a time.
How much does commercial electricity cost in Texas in 2026?
The energy charge — the per-kWh rate you see quoted — sits in the 7 to 9 cent range for most commercial accounts in 2026, but the contract structure you pick changes how exposed you are to market swings.
| Rate structure | How it works | Best for |
|---|---|---|
| Fixed-rate | Price locked for the full term, usually 12 to 36 months | Businesses that want budget certainty and predictable line items |
| Indexed-rate | Price adjusts monthly, tied to wholesale ERCOT market pricing | Businesses that can absorb volatility for a shot at lower average cost |
| Variable / month-to-month | No contract term; the provider can change the rate at will | Short-term or transitional accounts — generally the most expensive over a full year |
Verdict: fixed-rate contracts win for most commercial accounts in Texas in 2026 because they remove the guesswork from budgeting; indexed contracts only make sense for businesses with the cash flow to ride out a bad month.
Why commercial electricity rates vary in Texas
No two commercial quotes in Texas look alike, even for businesses of similar size. The rate a REP offers depends on:
- Contract length — 36-month terms often price lower than 12-month terms because the REP is locking in your load for longer
- Usage volume and load profile — a data center's flat, round-the-clock draw prices differently than a retail store's daytime-heavy usage
- TDU territory — Oncor, CenterPoint, AEP Texas, and TNMP each set their own delivery charges, independent of which REP you choose
- Demand charges — high-usage facilities can carry a separate charge based on peak demand, not just total kWh consumed
- Timing of enrollment — locking a contract during a period of high wholesale ERCOT pricing bakes that cost into your fixed rate for the whole term
- Credit and deposit requirements — new businesses or those without an established payment history sometimes face higher rates or deposit terms
Get commercial rates auctioned for you
See competing REP bids on your exact load profile in Texas.
Is commercial electricity deregulated in Texas?
Yes — most of the state, the area served by ERCOT, is deregulated for commercial accounts, meaning businesses choose their own retail electric provider instead of buying from a single utility. Exceptions exist in areas served by municipally owned utilities or electric cooperatives, which sit outside the competitive market.
How does a reverse auction lower commercial electricity rates in Texas?
A reverse auction puts multiple retail electric providers in competition against each other for the same, identical load profile, so each REP bids down its price to win the account rather than a business collecting quotes one at a time. Texas Electric Broker structures this process for accounts ranging from single retail stores to multi-site operations and data centers.
What's the difference between fixed and indexed commercial electricity rates in Texas?
A fixed rate locks the per-kWh energy price for the length of the contract, typically 12 to 36 months, so the number on the bill doesn't move even if wholesale prices spike. An indexed rate floats month to month with the ERCOT wholesale market, which can mean lower costs in calm periods but real exposure during price spikes.
FAQ
How much does commercial electricity cost in Texas in 2026?
Commercial electricity in Texas runs about 7 to 9 cents per kWh in 2026 for the energy charge alone, with TDU delivery fees added separately on top of that rate.
Are commercial electricity rates in Texas negotiable?
Yes — commercial rates are negotiated per contract, and running competing retail electric providers against each other in a reverse auction typically produces a lower rate than accepting a single quote.
What's the difference between a retail electric provider and a TDU in Texas?
The retail electric provider (REP) sells you the energy itself and sets the per-kWh rate, while the TDU (Oncor, CenterPoint, AEP, TNMP) owns the wires and bills a separate delivery charge no matter which REP you choose.
Can small businesses use a reverse auction for electricity rates?
Yes — reverse auctions work for accounts of any size in Texas, from a single retail storefront to a multi-site operation, because the process is built around the load profile, not the business's size.
How long are commercial electricity contracts in Texas?
Commercial contracts in Texas commonly run 12 to 36 months on a fixed rate, with shorter or month-to-month terms available at a cost premium.
Does electricity price vary by region within Texas?
Yes — the TDU delivery charge portion of the bill varies by service territory, so two businesses on the same REP energy rate can still see different total bills depending on whether they're in Oncor, CenterPoint, AEP, or TNMP territory.
What happens if a commercial electricity contract expires without renewal?
Accounts that roll past their contract end date without a new agreement typically default to a month-to-month or holdover rate, which runs higher than a negotiated fixed-rate contract.
One last thing
The lowest rate on a comparison page is rarely the rate a specific business ends up paying. REPs price commercial load differently than residential, factoring in demand charges and usage patterns that a generic published rate doesn't reflect — the only way to see a true number is to get REPs bidding on your actual load profile, not a rate card. That's the gap a reverse auction closes: it forces providers to quote against your real usage data in 2026, not a hypothetical average business.