Compare Houston Electricity Rates: Real Cost at 500, 1,000, and 2,000 kWh

If you live in Greater Houston and you are staring at a wall of electricity offers, the single most important thing to know is this: the headline “rate” is almost never the whole story. In competitive areas of Texas, the number that actually matches your life is the all‑in cost at the amount of power you truly use each month, measured in kilowatt‑hours (kWh). A plan that looks cheap at 1,000 kWh can be expensive at 500 kWh, and a time‑of‑use “free nights” product can swing even more depending on when you run the AC and the dryer.

This guide walks through how to compare “real cost” for three common disclosure points—500, 1,000, and 2,000 kWh—why those three buckets exist, what tends to break the math on each tier, and how to shop without stepping on the usual landmines. It is written for households and small businesses that renew, switch, or start service. Where statewide statistics help orient you, they are not a substitute for reading the offer tied to your address.

Why Houston comparisons hinge on usage, not vibes

Since 2002, many Texans have been able to choose a retail electric provider while the local wires company—the transmission and distribution utility—continues to deliver power and maintain outages response for your area. The ¹ explains that switching providers does not interrupt service and does not change which wires company serves your premises; reliability is not supposed to hinge on which retailer you pick. That separation—supply sold by a retailer, delivery performed by the TDU—is the backbone of how bills are unbundled in competitive markets.

² is the Public Utility Commission of Texas’ official, unbiased electric choice website where certified providers may post offers for free so customers can compare standardized documents and enroll in a plan that fits their needs. If your ZIP code is not in a competitive service area, the site may return no plans—an important reminder that not every Texas address shops the same way.

Houston sits in the broader Electric Reliability Council of Texas (ERCOT) footprint, where retail competition is common for many homes and apartments. That matters because competition pushes creativity in product design: fixed contracts, month‑to‑month variables, indexed formulas tied to public prices, time‑of‑use discounts, prepaid structures, renewable content claims, and a long tail of fees and credits that only show up clearly in one place—the standardized fact sheet for each product. The ³ defines the retail electric provider as the company that sells electricity to customers, clarifying that REPs do not generate power, read meters, or maintain wires—those jobs sit with the TDU.

The two halves of your bill (and why both hit your “¢/kWh”)

Two different roles show up on most competitive bills. Retail electric providers sell the energy and procure supply; they do not operate the delivery system. Your local wires company delivers energy and maintains the distribution system, reads the meter in normal course, and handles outages. As the ³ summarizes for “Transmission and Distribution,” those services are provided by your TDU, which is responsible for maintaining poles and wires and responding to emergencies and outages, with PUC oversight for safety and reliability.

A kilowatt‑hour is simply energy use over time: one kilowatt of demand running for one hour. The ³ notes that usage for a billing period is measured in kWh and appears on bills as “kWh used.” When you see an “average ¢/kWh” on marketing or a facts label, think of it as a bundle of energy charges plus recurring monthly charges, government‑imposed fees, and pass‑through delivery charges, all converted into an apples‑to‑apples rate at a specified usage level. That conversion is why the same contract can print three different average prices for 500, 1,000, and 2,000 kWh.

The Electricity Facts Label: where 500, 1,000, and 2,000 kWh actually live

Texas requires an Electricity Facts Label (EFL) for each plan so customers can compare offers on a like‑for‑like basis. The ³ describes the EFL as standardized information about contract terms, pricing, fees, and the percentage of renewable energy offered—precisely the “apples‑to‑apples” frame regulators intended. In plain English, it is the cheat sheet that keeps retailers from hiding the sting in fine print—if you read it.

On competitive shopping portals, you will also see average price calculations that correspond to the EFL methodology. The ⁴ tells you to estimate your average monthly usage from past bills, remember seasonal swings (for example, hot August afternoons), optionally filter by price band and contract length, and—critically—use filters that remove plans with minimum usage fees or tiered rates if you do not want those structures. After you narrow finalists, the same guide insists you open the FACT SHEET (EFL) and read it carefully before enrolling.

500 kWh: when flat monthly charges bully the average

At 500 kWh, you are on the lower end of many residential curves—think smaller apartments, mild months, or an unoccupied home drawing baseline loads. Mathematically, any flat dollars‑per‑month component hits harder when divided across fewer kWh.

The ³ defines a base charge as a flat fee applied each month regardless of kWh. Even modest base charges move the effective ¢/kWh a lot at 500 kWh. The same glossary section on minimum monthly fees explains that many plans require a minimum amount of electricity each month; if you fall below it, you can be charged a minimum usage fee that may or may not be broken out separately on the monthly bill—another reason to read the EFL carefully.

The ⁵ reinforces a practical pattern: some plans trigger extra costs when usage falls below common cutoffs such as 500 or 1,000 kWh in a billing period. Names vary—“minimum usage fee” is typical—but the fix is the same: confirm the threshold and charge on the EFL before you enroll, not after the bill arrives.

If you are a low‑usage household, prioritize plans with transparently low or zero base charges and no minimum‑usage trap for your band. Also watch “tiered” products the ⁴ explicitly calls out as a filter category—tiers can make averages jump non‑linearly as you cross a boundary.

1,000 kWh: the benchmark tier everyone leads with

One thousand kWh is the middle disclosure point on many labels and marketing cards. It is not a magic “correct” usage level for Houston—it is a standardized anchor so you can compare offers quickly. Treat it like the mileage label on a car: useful for ranking, not a promise of your outcome.

The ⁴ nudges you to compute your own historical average and to remember seasonality. If your trailing‑twelve‑months usage centers near 900–1,100 kWh, the 1,000 kWh column is probably representative. If you are routinely at 400–600 kWh, lean on the 500 kWh column first, then sanity‑check summer months separately.

2,000 kWh: large homes, intense summers, and behavior‑sensitive “deals”

At 2,000 kWh, you are often in larger single‑family homes, all‑electric scenarios, or heavy cooling months. Here the energy component dominates, so small changes in the energy rate move dollars faster. But this tier is also where time‑of‑use designs can shine or backfire.

The ³ time‑of‑use entry explains that average price calculations for those plans—on the EFL and on the shopping site—are based on each retailer’s estimate of the percentage of energy used during free or discounted hours versus premium hours, and those estimates vary by REP and plan. If you do not shift usage to discounted periods, your bill can actually increase relative to a straightforward fixed product; if you will shift loads—pool pumps, EV charging, laundry, pre‑cooling before peak—the same plans can outperform simple fixed bundles.

Plan types and what can move on you after you sign

Fixed‑rate plans lock the energy rate for the contract term with limited exceptions. The ⁶ explains that your price per kWh will not change during your contract period except for changes in transmission and distribution fees, changes in ERCOT or Texas Regional Entity administrative fees, or changes resulting from federal, state, or local laws that impose fees beyond your REP’s control. That is good for budgeting, but it also means the label’s delivery components can still adjust with regulatory updates—another reason the 500/1,000/2,000 averages can drift over time even on a “fixed” product.

Variable rate plans have no monthly contract or cancellation fee in the usual framing, but the rate you pay per kWh can vary month to month based on market conditions and the retailer’s discretion, with higher risk during spikes from extreme weather or tight markets. Indexed plans tie the rate to a public index through a disclosed formula; they can swing similarly to variables but with a more mechanical link to an external price. The same ⁶ page walks through contract length behavior: many plans default to month‑to‑month service if you let a term expire without a replacement contract in place, and that default price “will likely be much higher,” so line up your next agreement before the cliff.

The ⁶ describes prepaid plans as pay‑as‑you‑go service that does not always require a contract but does require timely prepayment and close monitoring of account balance, and it notes prepaid products generally charge a higher rate than non‑prepaid plans. The same page explains that retailers may require a refundable security deposit for new customers, with possible waivers based on payment or credit history—another upfront cash item separate from the three kWh disclosure points.

For renewable marketing, the ⁶ page reminds you to read the EFL’s renewable percentage and to notice that Texas rules allow certain “green” designations that include Texas‑produced natural gas—definitions matter when you are buying intent, not just electrons.

Shopping mechanics that protect real dollars

The ¹ page lays out the operational basics: contact the winning retailer or enroll online, review the Terms of Service, and remember you typically have three business days to cancel without penalty when a penalty applies. After you sign, ERCOT mails a switch confirmation with cancellation instructions; the switch itself is designed to occur within seven business days without an intentional outage, and your wires company stays the same.

On fees, the ⁵ clarifies there is generally no switching fee unless you request a special meter read outside the normal cycle, though breaking an existing contract with your current retailer can still cost you—check your current Terms of Service before you leap. The FAQ also highlights slamming and cramming as illegal—switching you without permission or adding optional charges without permission—underscoring why you should protect account identifiers and read anything you sign.

For apples‑to‑apples comparisons, third‑party comparison experiences also advertise access to licensed suppliers by ZIP—useful when you want a second layout of the same underlying market data. ⁷ markets head‑to‑head plan browsing for Texas among other states; treat any broker or portal as a lens, not a replacement for reading your EFL and contract.

A statewide average is a compass, not your contract

It can help to sanity‑check competitive offers against official averages, as long as you know what you are looking at. The U.S. Energy Information Administration publishes ⁸, measured in cents per kilowatthour. The Texas residential row in the February 2026 snapshot shows about 15.4¢/kWh for the latest month versus about 14.9¢/kWh for February 2025 in the adjacent year‑ago column. Those figures are statewide averages across many utilities and customer types—not the labeled average for a specific competitive plan in Harris County, and not a prediction of your next bill.

Use EIA context to detect obvious outliers—if a marketed “average” is wildly below the statewide residential average, your skepticism should rise until the EFL math reconciles credits, introductory windows, and pass‑throughs.

Pulling it together: a practical comparison checklist

First, pull 12 months of kWh from bills or your online account and compute a histogram: how many months land near 500, near 1,000, or north of 1,500? Second, for each finalist plan, write down the EFL’s average price at 500, 1,000, and 2,000 kWh, then circle the band closest to your reality. Third, add mental adjustments for base charges, minimum‑usage clauses, and time‑of‑use behavior. Fourth, confirm contract end behavior and early termination penalties using the Terms of Service. Fifth, if an offer leans on bill credits tied to usage bands, model those credits explicitly at your actual kWh—marketing snapshots love 1,000 kWh even when you are a 600 kWh customer.

Houston’s heat and home stock diversity mean “best plan” is personal. The same ¹ that describe potential savings and renewable options also caution that you may not want to change if you are happy with your current plan and provider or are under a long‑term contract, because penalties can apply if you break an existing agreement. When you do shop, the point is not to chase the lowest sticker on the billboard—it is to match a transparent price structure to the way your home actually uses power.