Texas Fixed-Rate Power Plans: Comparing Real Cost at 1,000 kWh

The number that dominates Texas electricity shopping—1,000 kilowatt-hours—is not a prediction of your bill. It is a regulatory comparison point. Retail electric providers (REPs) must disclose an average price at that usage level, and shoppers sort plans by it. Used carefully, the 1,000 kWh figure is a useful yardstick. Used alone, it can send you to a plan that looks cheap on a comparison site and costs more once your air conditioner, EV charger, or empty-nest thermostat does something ordinary.

This guide explains what that benchmark measures, how fixed-rate plans work in competitive Texas, what actually sits inside an all-in price, and how to turn Electricity Facts Label (EFL) numbers into a realistic monthly cost—whether you use 700 kWh or 1,800.

Why 1,000 kWh became the comparison number

Texas does not make you guess how to line up offers. The Public Utility Commission of Texas requires every residential product’s ¹ to show a total average price, in cents per kilowatt-hour, at 500, 1,000, and 2,000 kWh per month. Those averages must reflect recurring charges (with limited tax-related exclusions spelled out in the rule). The same rule tells REPs to state whether a product is a fixed-rate or variable-price plan.

That three-point grid is why comparison tools default to 1,000 kWh: it sits in the middle of the required disclosure set, so it became the headline everyone sorts and advertises. The state’s official shopping site, ², is run as the Public Utility Commission’s unbiased electric choice website where certified providers can list offers for free and customers can compare plans by ZIP code.

Here is the catch that matters for real households. In 2024, Texas residential customers used about 1,096 kWh per month on average, paid about 14.94¢/kWh, and saw an average bill near $163.72, according to the U.S. Energy Information Administration’s ³. The U.S. residential average that year was lower usage (863 kWh) and a higher cents-per-kWh figure (16.48¢), with an average bill around $142.26. Texas homes tend to run more kilowatt-hours than the national average—often because of cooling load—so a plan optimized to look cheapest exactly at 1,000 kWh may not be cheapest at the usage you actually have in July or January.

Treat 1,000 kWh as a standardized measuring stick, not as “what my house uses.”

How Texas retail electricity actually works

In most of the state, the company that delivers your power is not the company that sells you the energy product.

⁴—the Electric Reliability Council of Texas—manages electric power flow for more than 27 million Texas customers, about 90 percent of the state’s electric load. It schedules power on a grid with more than 55,000 miles of transmission lines and 1,460-plus generation units, settles the competitive wholesale market, and administers retail switching for about 8 million premises in competitive-choice areas. ERCOT operates under oversight from the Public Utility Commission of Texas and the Texas Legislature.

Your poles-and-wires company is the transmission and distribution utility (TDU), sometimes labeled TDSP on a bill. ⁵, the largest energy delivery company in Texas, explains the split plainly: in most parts of Texas you choose a Retail Electric Provider that sets rates and offers plans; Oncor does not sell power, set your plan, or send the monthly electric bill. Your address determines which TDU delivers service. Switching REPs changes who bills you for energy; it does not change who owns the wires outside your house.

That separation is why two neighbors on the same street can pay different energy rates while sharing the same delivery utility—and why delivery charges still show up no matter which “electric company” you picked online.

Not every Texas ZIP is open to retail choice. Municipal utilities and cooperatives still serve large areas with bundled rates (generation plus delivery). Utilities such as ⁶ operate under a utility-tariff model rather than the competitive REP lineup on Power to Choose. If Power to Choose returns no plans for your ZIP, you are usually outside competitive choice, and the shopping method in this article does not apply the same way.

What “fixed rate” really means under Texas rules

Marketing language loves the word “fixed.” Texas law is pickier.

Under ¹, a fixed rate product is a retail electric product with a term of at least three months for which the price—including recurring charges and ancillary service charges—is the same for each billing period of the contract term, with narrow exceptions. The price may vary from the disclosed amount to reflect actual changes in TDU charges, changes to ERCOT or Texas Regional Entity administrative fees charged to loads, or new or modified fees or costs from federal, state, or local laws beyond the REP’s control. In other words, “fixed” locks the REP’s energy product price structure; it does not freeze every line item forever if your delivery utility’s approved charges change.

The same rule defines a variable price product as one where price may vary by a method the REP determines (with extra limits for residential customers), and it restricts indexed and wholesale-indexed products for residential and small commercial customers after dates specified in the rule. Month-to-month contracts (31 days or less) may not include a termination fee or penalty.

For shoppers, the practical translation is simple:

• A true fixed-rate term plan is usually the tool for budget certainty across a summer or a year.
• A variable month-to-month plan can look fine until wholesale or retail pricing moves against you.
• Early termination fees can erase savings if you break a term contract early; ⁷ notes that many customers still switch when longer-run savings outweigh the exit cost, but that is a math problem you should run before you enroll.

Also watch automatic renewal language. Texas rules require expiration notices for fixed-rate products and disclose what default renewal product applies if you do nothing. “Fixed for 12 months” is not the same as “fixed forever.”

Anatomy of a Texas bill at 1,000 kWh

The all-in average price on an EFL is not just “the energy rate.” It is an average of recurring costs packed into cents per kWh at a stated usage.

The PUC’s consumer fact sheet on ⁸ walks through items you may see regardless of which REP you choose: a base charge (flat fee each month regardless of kWh), energy charge (based on kWh consumed), meter charge, recurring and non-recurring fees, late payment penalties, sales tax, advanced metering charges, energy efficiency cost recovery, PUC assessment, and TDU delivery charges—the cost of moving electricity from the generation plant to your home—plus various surcharges and transition-related items. REPs may bundle charges into a single per-kWh price or separate them.

Delivery utilities publish their own explainers because those charges confuse people. ⁹ for Houston-area customers notes that delivery charges may appear as TDSP, TDU, or “Delivery Charge,” and that REPs are not required to break the delivery charge into every component on the bill. As of August 2025, CenterPoint lists a residential base meter charge of $2.79 per meter and a base customer charge of $2.11 per customer each month, plus volumetric factors (transmission and distribution cost recovery, energy efficiency, and other PUC-approved items) that rise and fall with kWh use.

That structure is why average cents-per-kWh falls as usage rises when fixed fees are spread over more kilowatt-hours—and why the same plan’s average at 500 kWh can look worse than at 2,000 kWh even when the energy rate itself never changed.

A quick illustration (not a live offer): suppose recurring charges total $100 at exactly 1,000 kWh. The average is 10.0¢/kWh. If $20 of that bill is fixed monthly fees and the rest scales with usage, the average at 500 kWh will be higher than 10.0¢, and the average at 2,000 kWh will be lower. The EFL is designed to show you those three snapshots so you are not guessing.

Nationally, ¹⁰ that electricity prices generally reflect the cost to build, finance, maintain, and operate power plants and the grid, and that prices are usually highest in summer when demand rises. Texas competitive plans sit on top of that physical and wholesale reality; your fixed retail rate is a commercial product layered onto regulated delivery and a volatile wholesale market you mostly do not see day to day.

Why the cheapest 1,000 kWh headline can mislead

Because the market knows shoppers sort by the middle EFL point, product design often concentrates discounts near 1,000 kWh.

Two common structures create that “V” or cliff shape:

1. Bill credits that apply only when monthly usage hits a stated threshold. Because shoppers and ranking tools focus on the middle EFL point, those thresholds are frequently aligned so the 1,000 kWh average looks especially attractive. Hit the threshold and that middle column looks fantastic. Miss it by a little—mild weather, vacation, a smaller apartment—and the credit disappears while the underlying energy rate remains.
2. Minimum usage fees that add a charge when you use less than a stated amount. The PUC fact sheet explicitly lists a ⁸ as a fee charged when a customer uses a certain amount of usage—wording that, in practice, shows up as penalties or lost discounts for low-use months.

⁷ puts the shopping implication bluntly: the same plan can cost more at 500 kWh than at 1,000 kWh, which is why comparing at your actual usage matters more than chasing a teaser number. Their public comparison messaging also highlights rates at 500, 1,000, and 2,000 kWh—the same three points the EFL must disclose.

None of this means every low 1,000 kWh price is a trap. Some plans are simply competitive on energy rate and look good across the EFL table. The tell is spread: if the 500 kWh average is dramatically worse than the 1,000 kWh average, or the 2,000 kWh average jumps for no obvious reason, open the EFL and Terms of Service and find the credit, fee, or tier that creates the kink.

Also remember what the average price excludes. Under §25.475, the disclosed average reflects recurring charges but excludes state and local sales taxes and reimbursement for the state miscellaneous gross receipts tax. Your actual dollars due can still differ slightly from a pure EFL-times-kWh napkin math once taxes land on the statement.

How to compare real cost: EFL math that travels with your usage

Here is a decision method that stays faithful to the official disclosures without pretending every month is 1,000 kWh.

Step 1 — Pull your usage pattern. Use 12 months of bills if you have them. Note summer peaks and mild-season lows. If you are moving, ask the seller or landlord for typical bills, or start with EIA’s Texas average (~1,100 kWh) as a temporary proxy and revise after your first summer.

Step 2 — Enter the right ZIP on ² (or another comparison view that still starts from official offers). Confirm the correct TDU if a ZIP straddles more than one delivery utility—the Power to Choose interface can prompt that choice.

Step 3 — Read all three residential averages on each EFL: 500 / 1,000 / 2,000. ¹ as the standardized pricing disclosure for each product. Prefer plans where the three points are relatively smooth unless your usage truly clusters at one level every month.

Step 4 — Convert average price to dollars at your usage.
Approximate monthly bill ≈ (average ¢/kWh ÷ 100) × your kWh.
If your usage sits between two EFL points, interpolate between the neighboring averages as a first estimate, then verify against the plan’s stated energy rate, base charge, and credit rules in the fine print. Interpolation is an estimate, not a guarantee—credits with hard thresholds do not move in a straight line.

Step 5 — Stress-test one high month and one low month. A plan that wins at 1,000 kWh but loses badly at 1,600 kWh (or at 600 kWh) is a seasonal trap in Texas.

Step 6 — Add contract economics. Multiply a typical month by 12, then subtract any early termination fee only if you might leave early. Include whether you value rate certainty through next summer more than a slightly lower teaser today.

Worked example using the method (illustrative averages only):

Plan A “wins” the 1,000 kWh beauty contest. A household that averages 1,800 kWh in summer and 700 kWh in spring may still prefer Plan B after running both seasons. That is the whole point of looking past a single column.

Small commercial shoppers should note the EFL uses different anchors—1,500 / 2,500 / 3,500 kWh—under the same rule, with a load-factor assumption when demand charges apply. Do not borrow a residential 1,000 kWh ranking for a shop or office.

Contract length, renewals, and seasonal Texas usage

Fixed-rate terms commonly run 6, 12, or 24 months, as consumer-facing Texas shopping guides such as ⁷ describe, though other terms appear in the market. Longer terms buy more protection against market spikes; shorter terms keep flexibility if you expect to move or if you think rates will fall. Neither is automatically “better.” Match term length to how long you will stay at the meter and how painful a surprise renewal rate would be.

Texas weather makes seasonality non-optional. Cooling drives summer peaks; electric heat or heat pumps can create winter spikes in some homes. Because many promotional designs hinge on hitting a monthly threshold, a plan that looked brilliant in a mild October can disappoint in August—or vice versa if a minimum-usage fee punishes your conservation month.

Delivery charges also move with usage and with utility rate changes approved by the PUC. A fixed REP energy product still rides on top of those wires charges, which is why two “identical” energy rates in different TDU territories are not identical all-in prices.

If you generate rooftop solar or enroll in a time-of-use / free-nights style product, the 1,000 kWh average on a standard fixed plan is the wrong lens. Those products need interval-level thinking: when you use power, not only how many kWh you use. Stick to fixed-rate comparison math for conventional flat energy products; use the plan’s own on-peak / off-peak disclosures for time-varying designs.

Outside competitive Texas—and what choice-state shoppers can still borrow

Deregulated Texas is unusually transparent about three-point average pricing. Other states differ.

In regulated markets, you typically cannot pick a REP; you take the utility’s tariff, though you may still choose among rate options (time-of-use, demand rates, budget billing). The DOE/FEMP discussion of ¹¹ (aimed at federal sites, but useful conceptually) emphasizes understanding load shape and bill structure before assuming another rate is cheaper—the same habit Texas EFL shopping rewards.

In choice states such as parts of Ohio or Maryland, supplier shopping exists, but disclosure formats are not identical to Texas EFLs. Borrow the method, not the branding:

• Compare all-in cost at your kWh, not the prettiest unit rate in an ad.
• Separate supply from delivery charges.
• Read early termination and renewal terms before you enroll.
• Be skeptical of any discount that only appears at one exact usage level.

Municipal and cooperative customers in Texas should focus on tariff riders, seasonality, and efficiency rather than Power to Choose rankings. The 1,000 kWh thought experiment still helps—estimate your bill at 500 / 1,000 / 2,000 under your utility’s tariff to see how fixed customer charges and tiers behave—but you will not be picking among dozens of REPs.

A practical decision checklist

Use this when you are ready to click enroll:

1. Confirm competitive choice for your address on ². No plans? You are likely with a municipal or co-op utility.
2. Know your TDU. Delivery territory drives part of every bill; Oncor, CenterPoint, AEP Texas, and TNMP are among the competitive-area delivery utilities commonly referenced in Texas shopping tools such as ⁷.
3. Gather 12 months of kWh (or the best proxy you can).
4. Shortlist fixed-rate plans if bill predictability matters through peak season.
5. Open every EFL and compare 500 / 1,000 / 2,000—not only the middle column.
6. Hunt for credits, minimums, and base charges in the EFL and Terms of Service using the vocabulary in the PUC’s ⁸.
7. Estimate dollars at your summer usage and your mild-season usage.
8. Price the exit. Early termination fees are real; so is the cost of doing nothing when a fixed term expires.
9. Ignore generation-quality myths. Switching REPs does not change wire reliability; ERCOT and your TDU still run the physical system.
10. Re-shop before renewal. Last year’s winner is not automatically this year’s winner.

Bottom line

The 1,000 kWh average price is Texas’s best-known electricity shopping statistic because the rules require it and the websites sort by it. It is a fair starting line, not the finish line. Pair it with the 500 and 2,000 kWh columns, your own seasonal usage, and a clear read of credits and fees, and a fixed-rate plan becomes what it is supposed to be: a predictable way to buy energy on a competitive market—not a scavenger hunt for the flashiest teaser rate.