Business Electricity & Natural Gas Rates in Texas

Leverage our industry experience to get personalized, transparent, and competitive energy rates.

Business Electricity & Natural Gas Rates in Texas

Leverage our industry experience to get personalized, transparent, and competitive energy rates.

Getting the Best Business Electric or Natural Gas Rates in TX

While comparing pricing online is the best way to secure the best rate for your home, it is not the most effective method for your business.

The reason for this is that the following factors have a very large effect on pricing:

• • Your load factor and load profile. Not sure what these are? This article explains them in depth.
  • Your rate class e.g. commercial or industrial.
  • Total annual usage.
  • How your business is zoned.
  • Transportation costs (specifically for natural gas)

This is why you will almost always get better pricing by reaching out to suppliers individually and giving them a copy of your bill. The only downside is that there are many suppliers in Texas that have great pricing, and getting quotes from each is time consuming.

This is where brokers like us at Consumer Energy Solutions come in.

Why CES?

Pricing: Over the past 24+ years we have enrolled over 519,000 businesses and have built strong relationships with the best suppliers in Texas. This allows us to negotiate preferential pricing for our clients.

Simplicity: With over 130 retail electric providers finding the right supplier in the Texas energy market can be clunky, complex, and overwhelming due to the sheer amount of choices available to businesses. Let our energy experts handle the leg work for you, so you can focus on what matters: growing your business.

Market Expertise: Following federal and local regulatory changes, monitoring the global energy market, and understanding how all of this affects energy prices in your territory is not only time-consuming but likely also is not a practical use of your time.

Our Process

Our entire job is to take the stress and work out of finding the correct energy supplier who will give you the most favorable contract and best price available today.

1. With a copy of your bill(s), we analyze your historical usage, rate class, zone, and load profile along with the number of accounts you manage to see what type of rate is best for your business and what suppliers fit your specific needs best.

2. We get quotes from the top suppliers in your area leveraging our relationships to negotiate preferential rates for your business.

In most cases we are able to get better rates than you will from suppliers because:

• We place tens of thousands of businesses a year with suppliers and we use that to negotiate lower rates.
• We get suppliers to compete against each other to earn your business.

3. Once we have the agreement between you and the energy supplier we will walk you through the terms and conditions, legal information, cancellation fees, and answer any other questions you may have before you sign.

Once everything is signed you’ll be introduced to one of our customer service representatives who will assist you with any future questions.

4. Lastly, your energy consultant will monitor the energy market and your account identifying the best times to renew your contract with your existing supplier or get a new contract with a competitor that has lower pricing.

Texas Electricity Rates Over Time

Commercial electricity rates in Texas are considerably lower than the national average, largely because 41.8% of electricity in Texas is produced from natural gas and Texas is the #1 natural gas producer in the U.S. This greatly contributes to the stability and affordability of natural gas as a primary energy source in the state.

Availability of natural gas as a main source of power for Texas has greatly contributed to the stability of commercial pricing in Texas over the past 20+ years. In 2001 the average business rate was 7.74 cents per kWh and in 2024 the average price was 8.83 cents. Pricing is going up, but it’s going up much slower compared to many other states e.g. New York which has seen business rates increase from 12 cents to 18 cents over the same time period.

This also means natural gas pricing greatly impacts electricity pricing. 

Types of Energy Plans Available in Texas

How much energy your business uses, the total number of locations, whether you have multiple shifts, etc., all influence what type of rate will suit your business best. However, most businesses do best with a standard fixed rate.

Fixed-Rate

A fixed-rate plan, as the name suggests, will have a firm and unchanging price that will last the length of the contract. No matter the weather–hot or cold–severe storms, or even market volatility, the fixed rate will not change for the length of the contract. These contracts are typically for 6, 12, 24, or 36 months, but can go up to 5 years. Fixed-rate energy plans in Texas are the most commonly used plans, and the plan that we recommend using in most circumstances.

Variable-Rate

Variable-rate plans change month-to-month based on the fluctuations in the market. Because of this there is a chance for the rate to drop and you will pay less for a period, but there’s also a chance that the rate could go much higher. Factors that can cause this include oil & natural gas pipelines being shut down, world events, government regulations/tax changes, or an infrastructure problem. This all means that your monthly electricity bill will not be the same month-to-month, and you may end up with a surprise. We don’t recommend variable-rate plans in most circumstances.

Blend and Extend

Blend and extend contacts are used for businesses under contract that want to take advantage of a large dip in energy pricing. Essentially the business works with its supplier to lower its rate today even though it’s under contract and in exchange agrees to extend the contract with the supplier.

Imagine your business is paying 10¢ per kWh in an electric contract, and you’re currently in the second year of a two year contract. Let’s say prices have dropped to 7¢ per kWh. You could lock in today’s lower rate and blend it with the contract you have. The new longer term might be 8-8.5¢ throughout the entire term of the contract.

The benefit of this type of contract is it can reduce your business’ energy costs immediately. You can take advantage of today’s down market instead of having to pay a higher rate from an older contract.

Index

An indexed rate electricity plan is similar to a variable rate plan, in that your price will change on a regular basis. The difference is that indexed plans are tied to a published market price, like the cost of natural gas. Businesses can take advantage of price volatility to competitively plan and manage the quantity of electricity they consume based on anticipated hourly prices. Manufacturers, for example, can opt to use more electricity at off-peak hours.

Block and Index

Block and Index Contracts give you power to blend the benefits of fixed and index rates, giving your business greater control over your energy budget. These contracts offer flexibility to secure fixed prices for specific portions of your load while letting the rest, the unfixed portion, remain on the market-based index rate. With this approach, your business has flexibility in what percentage of their energy is purchased in blocks. The blocks available for purchase will vary by market.

This can be very beneficial for businesses that use energy 24/7 like large manufacturers. They can utilize a fixed rate for on-peak hours where prices are highest and take advantage of the cheaper off-peak hours (nighttime/early morning).

There are other types of custom pricing for ultra specific needs but generally speaking, these 5 are used the vast majority of the time.

ERCOT and the Texas Electric Grid

The Electric Reliability Council of Texas (ERCOT) is the main entity that manages the flow of electricity in Texas. They represent 27 million people which is 90% of the state’s entire electric load. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

All customers in ERCOT’s territory are required to choose a supplier in order to receive electricity.

Major Cities in Texas that are Deregulated

If your business is in one of these cities, you have the ability to shop for the best plan for your business.

• • Houston (and surrounding areas)
  • San Antonio (and surrounding areas)
  • Dallas (and surrounding areas)
  • Fort Worth (and surrounding areas)
  • Arlington
  • Plano
  • Frisco
  • Waco
  • San Angelo