McAllen TX Electricity Plans: Real Cost at 500 and 2000 kWh
If you are shopping for electricity in McAllen, the rate on a postcard is almost never the number that hits your bank account. Texas retail plans are built around how many kilowatt-hours (kWh) you use in a billing month—and regulators require every residential offer to show modeled all-in prices at 500, 1,000, and 2,000 kWh so shoppers can compare apples to apples. For many McAllen households, the endpoints matter most: 500 kWh captures light-use months (efficient apartments, winter shoulders, snowbirds), while 2,000 kWh mirrors peak summer when Rio Grande Valley air conditioning runs hard. This guide explains how McAllen fits into Texas electric choice, what regulated delivery adds at those two usage levels, and how to turn EFL math into a bill you can trust.
Why 500 and 2,000 kWh Are the Bookends That Matter
A kilowatt-hour is one kilowatt of power used for one hour. Your meter totals kWh over the billing period; that total is the input every plan uses to calculate your charge (¹).
Texas does not pick 500 and 2,000 kWh at random. The Electricity Facts Label (EFL) that every retail electric provider (REP) must publish for each plan shows the average price per kWh at 500, 1,000, and 2,000 kWh, plus fees, contract length, and renewable content (¹). The state's official comparison site, ², uses the same three anchors. On the ³—McAllen's core ZIP—the Estimated Use dropdown lets you toggle 500 kWh, 1,000 kWh, or 2,000 kWh and re-sort plans by Price/kWh at that level.
That structure exists because many plans are not flat. Minimum-use fees, bill credits, tiered energy charges, and base fees hit differently when usage is low versus high. A plan that looks like a bargain at 1,000 kWh can punish a 500 kWh month—or reward a 2,000 kWh month—without changing the headline marketing rate. If you only compare one usage point, you are guessing.
Who should weight 500 kWh? Studio apartments, one-person households, extended travel, or homes with mild winter bills. Who should weight 2,000 kWh? Larger homes, families running central A/C through long South Texas summers, pool pumps, or secondary refrigerators. Many McAllen homes swing between both in the same year; that is normal, and it is exactly why the EFL shows multiple usage rows.
McAllen and Texas Electric Choice
Most McAllen-area addresses sit in Texas's competitive retail electric market, created when the Legislature restructured the industry in 1999 to encourage retail competition (⁴). You choose a retail electric provider for supply and billing; a separate transmission and distribution utility (TDU) still delivers power, reads the meter, and repairs outages (⁴). Switching REPs does not change the physical wires to your home, and reliability does not change with your supplier (⁴).
McAllen and the broader Rio Grande Valley are served for delivery by AEP Texas Central, listed as AEP Central on Public Utility Commission of Texas (PUCT) rate tables. When you enter ZIP 78501 on ³, offers shown include that TDU's regulated pass-through charges in the displayed Price/kWh.
Not every Texas address can shop. Municipally owned utilities and some cooperatives were not required to open to competition (⁴). If plans appear for your ZIP, you are in a competitive zone; if not, call 1-866-PWR-4-TEX (1-866-797-4839) as the FAQ directs.
The grid that balances supply and demand across most of Texas—including the Valley—is managed by the Electric Reliability Council of Texas (ERCOT) (⁵). When you enroll with a new REP, ERCOT sends a confirmation mailing; you have three business days to cancel without penalty, and the switch completes within about seven business days with no service gap (⁴).
Consumer protections follow you regardless of REP: non-discrimination rules, prohibitions on slamming (switching without consent) and cramming (unauthorized charges), dispute resolution, and privacy of account data (⁴). Every plan must include an EFL, Terms of Service, and Your Rights as a Customer disclosure (¹).
Regulated Delivery: What AEP Central Adds at 500 vs 2,000 kWh
No matter which REP you pick, everyone in the AEP Central footprint pays the same TDU delivery charges, set by the PUCT. As of June 1, 2026, residential AEP Central delivery includes (⁶):
| Component | Amount |
|---|---|
| Customer charge | $1.27/month |
| Metering charge | $1.97/month |
| Volumetric delivery | 5.9¢/kWh |
Fixed TDU fees total $3.24 per month before any energy use. The volumetric piece scales linearly: every extra kWh adds 5.9¢ in delivery pass-through on top of whatever supply rate your REP charges.
The PUCT publishes average residential TDU bills at standard usage levels for AEP Central (⁶):
| Monthly usage | Average TDU delivery bill (AEP Central) |
|---|---|
| 500 kWh | $32.36 |
| 2,000 kWh | $119.75 |
Notice the shape: delivery alone moves from roughly 6.5¢/kWh effective at 500 kWh ($32.36 ÷ 500) to about 6.0¢/kWh effective at 2,000 kWh ($119.75 ÷ 2,000) because the fixed $3.24 spreads across more kilowatt-hours. That is why low-use months feel "expensive per kWh" even when your REP energy charge is competitive—you are dividing fixed costs across fewer units.
The ¹ notes that on a fixed-rate plan, your price per kWh generally will not change during the contract except for changes in transmission and distribution fees, ERCOT or Texas Regional Entity administrative fees, or new government-imposed pass-through costs. TDU filings can shift your bill even when your REP supply rate is locked.
Turning Plan Prices Into Real Monthly Dollars
On ³, the Price/kWh column is an all-in average at your selected usage level—supply, TDU pass-throughs, and recurring REP fees baked in, with minimum-use fees and bill credits already reflected in the averages (³). It does not include sales tax (⁷).
Quick conversion: multiply the displayed ¢/kWh by usage, then divide by 100.
| Posted all-in avg. | Pre-tax subtotal at 500 kWh | Pre-tax subtotal at 2,000 kWh |
|---|---|---|
| 12.0¢/kWh | $60.00 | $240.00 |
| 14.0¢/kWh | $70.00 | $280.00 |
| 16.0¢/kWh | $80.00 | $320.00 |
These rows are math illustrations, not live McAllen offers—always pull current prices from ³ before enrolling.
For statewide context: EIA's Texas Electricity Profile reports an average retail price of 9.79¢/kWh in its 2024 summary table (⁸). That figure blends sectors and lags the retail offers you see today. More recent residential data in EIA's Electric Power Monthly table shows Texas averaging 15.41¢/kWh in February 2026 (⁹). Nationally, EIA notes the 2025 U.S. residential average was about 13.63¢/kWh (¹⁰). McAllen competitive plans at 500 or 2,000 kWh may land above or below those benchmarks depending on contract type and usage tricks in the EFL.
Before you call any REP, the PUCT recommends asking your current provider for its total rate per kWh based on 1,000 kWh average usage, excluding taxes and non-recurring fees, then comparing prospects with these core questions (⁷):
- What will I pay per kWh based on 1,000 kWh average monthly usage?
- Does that rate include electricity, transmission and distribution, and recurring monthly charges?
- Is the offer fixed, variable, or indexed—and how can it change?
For McAllen shopping, add a fourth question yourself: What are the EFL averages at 500 and 2,000 kWh? Those two rows expose plans optimized for a usage band you may never hit.
Plan Designs That Flip 500 kWh vs 2,000 kWh Rankings
Power to Choose can hide complex pricing by default. Its filter for plans without a minimum usage fee/credit and without tiered pricing exists because including those designs means the average per kWh price may vary significantly from your actual billed price per kWh (³). If you turn on Show All Plans, read every EFL carefully.
Minimum usage fees
Many plans require a minimum amount of electricity each month. Fall below it and you pay a minimum usage fee, which may not appear as a separate line item on the bill (⁴). Typical cutoffs are less than 500 or 1,000 kWh (⁴). A plan cheap at 2,000 kWh can sting in a 450 kWh month.
Bill credits tied to usage bands
Some offers grant credits when usage falls in a target range—often near 1,000–2,000 kWh. The ³ states these credits are already included in posted average kWh prices at 500, 1,000, and 2,000—not stacked on top. That means the 500 kWh column on a credit-heavy plan can look terrible while the 2,000 kWh column looks like a steal, even though both describe the same contract.
Tiered energy charges and base fees
The ¹ defines a base charge as a flat fee applied each month regardless of kWh used. Combined with tiered energy rates, base fees inflate effective ¢/kWh at 500 kWh more than at 2,000 kWh—the same mechanics as TDU fixed charges, but controlled by the REP.
Variable, indexed, and time-of-use plans
Variable plans can change monthly at the REP's discretion (¹). Indexed plans tie pricing to a public index (¹). Time-of-use averages on the EFL assume a specific split between discounted and premium hours; if you do not shift load, your average price can exceed the EFL headline (¹). Snapshot prices at 500 or 2,000 kWh are not caps.
Prepaid and average-payment options
Prepaid service lets you pay in advance on a pay-as-you-go basis (¹). Average payment plans level your monthly payment with periodic true-ups; all REPs must offer them (¹). Neither changes the underlying EFL math at 500 or 2,000 kWh—they only change cash-flow timing.
Worked Examples: Low-Use vs High-Use Months in McAllen
Start with the regulated floor—the TDU portion alone (⁶):
- 500 kWh month: about $32.36 in delivery before any REP supply charge.
- 2,000 kWh month: about $119.75 in delivery before supply.
Everything above that is your REP's energy charge, any REP base fee, and plan-specific rules from the EFL.
Scenario A — Simple fixed plan (illustrative): Suppose the EFL shows 13.5¢/kWh at 500 kWh and 11.8¢/kWh at 2,000 kWh for the same fixed contract—common when a base fee or credit structure favors higher use.
- 500 kWh × 13.5¢ ≈ $67.50 pre-tax
- 2,000 kWh × 11.8¢ ≈ $236.00 pre-tax
Same family, same plan, very different effective rates—yet both numbers come from one EFL.
Scenario B — Minimum-use trap (illustrative): A plan posts 10.5¢/kWh at 2,000 kWh but includes a minimum-use threshold near 800 kWh. In a mild 480 kWh March, the EFL's 500 kWh row might read 17¢+ once the minimum-use fee is averaged in—even though summer bills at 1,900 kWh feel affordable.
Scenario C — Budgeting across seasons: A household uses 550 kWh in winter and 2,100 kWh in August. Ranking plans only at 1,000 kWh misses both extremes. Toggle ³ to 500 kWh for winter renewal and 2,000 kWh before summer to stress-test the same short list.
Add sales tax last. ⁷ explicitly tells shoppers to compare rates not including taxes—budget an extra few percent on top of EFL math.
Seasonal Usage in the Rio Grande Valley
McAllen's climate pushes many homes toward 2,000 kWh in summer and well below 1,000 kWh in mild winter months. EIA notes that electricity prices are usually highest in the summer when demand peaks and more expensive generation runs to serve load (¹⁰). In competitive Texas markets, your per-kWh supply rate may be fixed while total dollars still climb because kWh consumed climb with A/C runtime.
Practical takeaway: if you renew a plan in January using the 500 kWh sort, confirm it still makes sense at 2,000 kWh before June. If you shop in July using 2,000 kWh, check 500 kWh so you are not surprised by shoulder-month bills.
The Estimated Use tooltip on ³ suggests averaging your last six months of kWh from bills—or using 1,000 kWh as a default comparison anchor. For Valley households with sharp seasonal swings, six-month averages hide the peaks that drive annual spend. Smart Meter Texas (linked from Power to Choose resources) helps many Texans review interval data when you need month-by-month truth.
Small Business and Rental Notes
Small commercial accounts may face different rate classes, demand charges, or contract rules than residential EFLs. The shopping flow on ² includes business options separate from residential 500/2,000 kWh labels (¹¹).
Renters should confirm who holds the REP contract before switching (⁴). Enrollment with a new provider does not require calling the TDU—the REP coordinates with the wires company (⁴).
A Practical McAllen Shopping Checklist
- Confirm choice — Search ZIP 78501 (or your exact McAllen ZIP) on ³.
- Sort at your real extremes — Run comparisons at 500 kWh and 2,000 kWh, not just 1,000 kWh.
- Read both EFL columns — Compare 500 and 2,000 kWh average prices, base charges, ETFs, and renewable percentages (¹).
- Ask the PUCT core questions — Rate at 1,000 kWh, inclusions, and fixed vs variable (⁷).
- Filter consciously — Decide whether to include plans with minimum-use fees/credits; defaults exclude them for simpler math (³).
- Remember TDU pass-throughs — Delivery for AEP Central is $32.36 at 500 kWh and $119.75 at 2,000 kWh before supply (⁶).
- Calendar contract expiry — After expiry, you may roll to a month-to-month variable product unless you renew (⁴).
- Escalate disputes — Billing issues go to your REP first; unresolved problems go to 1-888-PUC-TIPS (1-888-782-8477) (⁴).
Bottom Line
McAllen electricity shopping is a two-variable problem: how many kWh you use and how your plan prices those kWh. The regulated AEP Central delivery layer costs about $32 at 500 kWh and about $120 at 2,000 kWh before you buy a single electron of supply (⁶). REP offers layer on top—and the same contract can look cheap at one usage level and punishing at another. Use ³ at both 500 and 2,000 kWh, verify the rows on each plan's EFL, and let your meter—not a teaser rate—pick the winner.