Texas Restaurant Power Plans: How to Compare Commercial Rates
Restaurant owners in Texas do not just "pay the light bill." They run cold storage around the clock, cook under heavy ventilation, cool dining rooms in triple-digit summers, and keep lights and POS systems humming through dinner rushes. That load profile is why shopping commercial electricity rates is less about finding a cute teaser price online and more about matching a plan to how your kitchen actually uses power. This guide walks through how Texas choice works, what sits on a commercial bill, how to compare fixed and variable offers, and how to switch without surprises.
Why restaurant electricity costs punch above their weight
Restaurants are among the most energy-intensive small businesses. According to the U.S. Environmental Protection Agency's ENERGY STAR program, restaurants use about five to seven times more energy per square foot than typical commercial buildings, and high-volume quick-service restaurants can use up to about ten times more. ¹ also notes that restaurants generally use the most electricity for refrigeration, followed by lighting, then cooling.
That refrigeration share is not a rounding error. ENERGY STAR cites U.S. Energy Information Administration data showing refrigeration accounts for about 44% of electricity use in commercial kitchens on a national average basis. ² For a Texas operator, that means a rate that looks "cheap" at a low residential-style usage level can still produce a painful bill once walk-ins, ice machines, and prep coolers are counted at real commercial volumes.
Statewide price context helps set expectations. In its Texas Electricity Profile for 2024, the U.S. Energy Information Administration reported an average retail electricity price of 9.79 cents per kilowatt-hour across all sectors. ³ Looking specifically at commercial customers, EIA's Electric Power Annual shows Texas commercial averages of 8.55 cents per kWh in 2024. ⁴ More recent monthly data put Texas commercial prices at 8.26 cents per kWh in May 2026, versus 8.62 cents a year earlier. ⁵
Those are statewide averages, not a quote for your ESI ID. Your restaurant's all-in cost depends on your transmission-and-distribution territory, demand profile, contract term, and whether you are in a competitive retail area at all. Still, the averages explain why Texas commercial shopping can look attractive next to higher-priced regions: U.S. commercial customers paid 13.54 cents per kWh on average in May 2026. ⁵
How Texas electric choice actually works for a restaurant
If your restaurant sits inside the Electric Reliability Council of Texas (ERCOT) region and is not served by a municipal utility or electric cooperative, you generally choose a retail electric provider (REP) for the energy portion of your service. The Public Utility Commission of Texas (PUCT) states that customers in the ERCOT region who are not served by a co-op or municipally owned utility have the power to choose their electric provider, and it points shoppers to Power to Choose as the official comparison site. ⁶
⁷ describes itself as the official and unbiased electric choice website of the PUCT, where providers can list offers for free so customers can compare plans.
ERCOT itself operates the bulk power system for most of Texas. According to ERCOT, it manages the flow of electric power to more than 27 million Texas customers—about 90 percent of the state's electric load—and schedules power on a grid with more than 55,000 miles of transmission lines while administering financial settlement for the competitive wholesale bulk-power market. ⁸ For a restaurant owner, the practical takeaway is simple: wholesale conditions and summer peaks can move forward prices that REPs use to build commercial offers, even if your poles and wires provider never changes.
That poles-and-wires role belongs to a transmission and distribution utility (TDU), also called a TDSP. Oncor explains the split clearly: REPs market electricity and bill customers, while TDSPs deliver and meter power, maintain lines, restore outages, and read meters. ⁹ Oncor lists four TDSPs in deregulated Texas zones: Oncor, CenterPoint Energy Houston Electric, Texas-New Mexico Power, and AEP Texas. You do not shop the TDU the way you shop a REP; your address assigns the wires company. CenterPoint, for example, describes itself as the transmission and distribution service provider in the ERCOT market for Greater Houston. ¹⁰
Oncor also notes that in most parts of Texas you choose your REP, which sets rates and plans, while Oncor does not sell power or send the monthly retail bill. ¹¹ For restaurants, that means comparing commercial power plans is mostly about the competitive supply rate and contract terms, while delivery charges still appear on the bill through your REP.
Very small commercial accounts sometimes browse public plan boards similar to residential shopping. Larger restaurants usually need custom commercial quotes based on interval data, demand, and usage history rather than a ZIP-code teaser alone. Licensed comparison services that specialize in commercial shopping, such as WattKarma's restaurant industry page, emphasize that restaurants in deregulated markets can compare licensed suppliers at a specific address and that switching suppliers does not interrupt physical delivery. ¹²
Anatomy of a commercial restaurant bill: energy, demand, and delivery
A useful commercial comparison starts by separating three ideas that get mashed together on invoices.
Energy charges are based on kilowatt-hours consumed. The U.S. Department of Energy's Federal Energy Management Program summarizes energy charges as costs based on the amount of electricity (kWh) used, which can vary by time of use and season, and notes that lowering them usually means cutting consumption or shifting use. ¹³
Demand charges are based on maximum demand in kilowatts during a period, typically each month. DOE FEMP describes demand charges as reflecting peak power draw and says the way to lower them is to curtail or shift usage during peak demand windows. ¹³ That distinction matters in restaurants because a lunch rush that fires ovens, HVAC, dishwashing, and refrigeration together can set a peak even if overnight kWh look modest.
Fixed charges are monthly costs tied to the rate schedule rather than consumption. DOE FEMP notes these are usually difficult to avoid once you are on a given schedule. ¹³
In competitive Texas, delivery (TDU) charges are regulated and passed through. Oncor explains that TDSPs bill REPs for delivering and metering electricity, and those costs are bundled into what customers pay; the total depends on both the delivery tariff and the REP plan you chose. ⁹ Oncor further notes that REPs bill for energy based on metered kWh and also bill customers for delivery from generator to premise. If your summer bill spikes, part of that can be higher kWh throughput on delivery line items as well as higher supply costs.
EIA's broader electricity price primer is a reminder that retail prices reflect generation, transmission, and distribution costs, plus fuel price swings and power-plant operating costs. ¹⁴ Restaurant operators should read a quote as an all-in estimate whenever possible: supply rate, estimated delivery, and known fees—not just a bolded cents-per-kWh figure from a sales email.
Fixed, variable, and indexed plans: what you are really buying
Texas REPs must disclose whether a product is fixed-rate or variable-price on the Electricity Facts Label. PUCT substantive rules for retail disclosures require the EFL to state specifically whether the product is a fixed rate or variable price product and to present standardized pricing information. ¹⁵
The PUCT describes the Electricity Facts Label as similar to a nutrition label: a standardized format for prices and contract terms so customers can make apples-to-apples comparisons, and REPs must provide an EFL upon request. ¹⁶
For restaurants, the plan-type decision usually comes down to risk tolerance and cash-flow predictability.
Fixed-rate commercial contracts lock a supply price for a stated term. They do not freeze every line on the bill—regulated delivery charges and some pass-throughs can still move—but they stabilize the competitive energy rate. That predictability matters when food costs and labor already bounce around.
Variable or month-to-month products can look attractive when markets fall, and painful when heat waves push wholesale costs up. EIA notes that fuel prices, especially natural gas, can rise during high demand and that higher fuel costs can raise generation costs. ¹⁴ Texas summers are not subtle. A restaurant that cannot absorb a spike during August should treat floating prices as a working-capital risk, not a coupon.
Indexed or market-linked commercial products sit between those poles. They may track a published index or wholesale reference with adders. They can beat a fixed quote in mild seasons and hurt when ERCOT scarcity pricing or fuel spikes hit. If you cannot explain the index, the adder, and the floor/ceiling in one sentence, do not sign it during a dinner rush sales call.
Contract length is part of the product. Twelve- and twenty-four-month terms price different forward risk. A longer fixed term can look cheaper on paper if the REP wants retention; a shorter term can look cheaper if the REP is protecting against multi-year market moves. The right answer is whichever offer produces the lower expected all-in cost at your usage after fees and early-termination exposure—not whichever brochure says "best rate."
How to compare restaurant offers without getting played by the teaser
Start with documents, not slogans. Ask every REP or broker for the Electricity Facts Label, Terms of Service, and—if you are commercial—the written quote assumptions: term start date, ESI ID, estimated monthly kWh, demand (kW), and whether delivery is included or shown separately.
PUCT consumer FAQ materials explain that early termination fees, when applicable, are charged if you cancel before the end of a contract term and that those fees are disclosed in the Terms of Service and Electricity Facts Label. ¹⁷ Read that number before you chase a half-cent savings.
For residential-style shopping, Power to Choose remains the official PUCT board. ⁷ Restaurant owners with small loads can use it as a sanity check. Mid-size and larger kitchens should treat it as a benchmark, then solicit commercial bids with the same start date, term length, and usage assumptions so quotes are comparable.
Compare at your usage, not at a marketing tier. Many offers show average prices at selected kWh levels. A restaurant using tens of thousands of kWh a month should not celebrate a rate that only looks sharp at 500 or 1,000 kWh. If a broker or REP cannot restate the price at your trailing twelve-month usage and peak demand, keep shopping.
Watch the load shape. ENERGY STAR's restaurant guidance underscores that refrigeration, lighting, and cooling dominate electric use. ¹ A plan with time-of-use features or demand-related commercial terms can punish simultaneous afternoon peaks even if the headline energy rate looks fine. DOE FEMP's framework—cut energy charges by reducing or shifting kWh, cut demand charges by flattening peaks—is the right mental model when reading commercial tariff language. ¹³
Finally, confirm you are actually in a choice territory. Municipal utilities and cooperatives are outside the standard REP shopping model the PUCT describes for ERCOT competitive areas. ⁶ Austin Energy, for example, operates as a department of the City of Austin rather than as a competitive REP market for its municipal customers. ¹⁸ If your landlord or utility bill says you are on a city or co-op system, your "comparison" work is rate-schedule and efficiency work, not Power to Choose hopping.
Timing renewals, holdover risk, and summer heat
Commercial renewal timing is a money decision. Texas summer air-conditioning and hotter refrigeration loads raise consumption just when wholesale risk is often elevated. EIA's price-factor discussion links high demand periods and fuel constraints to higher generation costs. ¹⁴ Locking a fixed commercial rate before the worst heat—or at least before your current contract rolls to a default month-to-month product—can matter more than shaving a tenth of a cent in July panic mode.
PUCT FAQ guidance for residential customers requires REPs to notify at least 30 days before a contract expires and explains that inaction can leave the customer on a month-to-month product. ¹⁷ Commercial contracts can differ, so read your own notice and Terms of Service. The operating rule for restaurants is the same: calendar the expiration date, request competing EFLs early, and avoid accidental holdover pricing during August.
If you might remodel, add a second location, or close a patio build-out mid-term, price the early termination fee into the decision. A rock-bottom 36-month fixed rate with a steep exit fee is a bad hedge for a concept still finding its footing.
Cut kilowatts while you shop cents: operations that change the bill
Rate shopping and efficiency are not rivals. Because restaurants are so energy-dense, a better rate on a wasteful kitchen still leaves money on the prep table.
ENERGY STAR's restaurant resources emphasize ENERGY STAR certified commercial food service equipment across categories such as refrigerators and freezers, fryers, steam cookers, ice machines, ovens, griddles, and dishwashers, with energy savings that can range from about 10% to 70% depending on the product category versus standard models. ¹
On refrigeration specifically, ENERGY STAR highlights maintenance as a near-term win: keeping condenser and evaporator coils clean and airflow clear, with field examples showing cleaning reduced energy use on dirty units. ²
Broader commercial-building context from EIA's Commercial Buildings Energy Consumption Survey materials shows that U.S. commercial buildings have diverse end uses, with space conditioning and lighting among major loads across the sector. ¹⁹ Restaurants skew harder toward refrigeration and food-service equipment than a typical office, which is why kitchen-specific upgrades often beat generic "LED only" projects.
Operational habits also move demand. Staggering oven preheats, avoiding simultaneous defrost and dishwashing peaks, and shutting down idle cooking equipment reduce the chance that a single short peak sets an expensive demand value. That is the same peak-management logic DOE FEMP describes for lowering demand charges. ¹³
If you are outside Texas choice—or in a regulated Texas pocket
Not every U.S. restaurant owner reading this can pick a REP tomorrow. Some states remain fully regulated. Others, including parts of Ohio and Maryland, have retail choice programs with different shopping rules than Texas. DOE's business-oriented utility bill materials for Ohio, for example, walk through the difference between energy (kWh) and demand (kW) on commercial bills and explain how billing demand can differ from a single meter peak because of ratchets and other tariff rules. ²⁰ The vocabulary transfers even when the market design does not: know whether you are buying a commodity supply product, a bundled utility tariff, or both.
Inside Texas, municipal and cooperative service territories remain important exceptions to competitive shopping. The PUCT's choice framing explicitly excludes customers served by electric cooperatives or municipally owned utilities from the standard "choose your provider" message. ⁶ In those areas, focus on the correct commercial rate schedule, demand management, and equipment efficiency rather than collecting REP flyers.
A practical checklist before you sign a restaurant power plan
- Confirm territory. Competitive ERCOT REP shopping, or municipal/co-op regulated service? Use the PUCT choice test as your first screen. ⁶
- Pull usage. Collect 12 months of kWh, peak kW if available, and your ESI ID. Interval data beats guesswork for commercial bids.
- Identify your TDU. Oncor, CenterPoint, AEP Texas, or TNMP in deregulated zones—your wires company is not optional. ⁹
- Request apples-to-apples quotes. Same start date, same term, written assumptions, and an Electricity Facts Label for each product. ¹⁶
- Score total cost and risk. Fixed versus variable, early termination fee, and whether the price was calculated at your real usage. ¹⁷
- Pair the contract with kitchen moves. Prioritize refrigeration maintenance and ENERGY STAR replacements where equipment is dying anyway. ¹
- Switch with eyes open. Changing REPs changes who bills you for energy, not who owns the poles. WattKarma's restaurant guidance states that switching suppliers does not interrupt service because physical delivery through the utility's lines continues. ¹²
Texas restaurant power shopping rewards operators who treat electricity like any other major vendor category: clear specs, comparable bids, and a contract that matches how the kitchen actually runs. The cheapest teaser rate is rarely the cheapest month in August. The best commercial plan is the one you can explain, defend at your real kWh and kW, and live with when the dining room is packed and every walk-in door is swinging.