Average Cost of Electricity in Texas: Is It Expensive?

The average electric bill in Texas is higher than in the rest of the US, despite the electricity prices being among the lowest in the US. In fact, the average monthly electric bill in Texas is so high because of the size of the average Texas home and the weather: Texas hot summers make it unbearable to stay in a room with no A/C. If you are concerned that you may be overpaying electricity and that your average monthly electric bill is too high, read on to learn more about the average electric bill in Texas. 

Average Electric Bill Of Different Building Types

Your average monthly electric bill does not only depend on the electricity rates you pay for the electricity. In fact, most of your electric bill in Texas depends on the energy usage and the subsequent electricity rates you pay in accordance with the energy spent. This is why it is so important to estimate your average energy usage even before you sign any contract with your retail electric provider. Below, you will find the average electric bill in Texas for different types of buildings. 

Houston

The average electricity bill in Houston is very high. This is not only due to the hot summers, but it is also because of the humidity, which is very high in the area. The average electric bills in Houston are therefore very high, as the average household uses as much as 1,300 kWh per month. A large portion of this goes towards the A/C, as humid air takes more energy to cool than air with less humidity. 

The average home size in Houston is also among the highest in Texas, which is another reason why the Houston average electricity bill is so high: bigger houses take more power to stay cool in the summer. As the average electric price in Texas is $0.1281 (EIA: November 2021), and the average Houston home uses 1,300 kWh / month, the average electricity bill in the Houston area is $165. 

Dallas

Dallas, on the other hand, is characterized by much lower humidity and 100 sq ft. smaller homes on average. With a monthly energy usage of only 930 kWh and smaller home size, how much electricity is used for A/C and other appliances is much lower. The average electricity bill in Dallas is, therefore, $120 per month. 

Furthermore, Dallas has fewer hot days than Houston and mild winters when most homes turn to natural gas for heating. With a lower number of days that the A/C is running and with a part of the energy needs being taken care of with the help of natural gas (as electric heating is very expensive), an average Houston resident pays less for their monthly electric bill. 

Average Electric Bill In Texas By Square Footage

However, climate and energy usage are not enough if we want to compare the average cost of electricity for a new Texas home. As Texas is a very popular destination to move to in the US, many newcomers find it difficult to estimate electricity usage for their new Texas home. Knowing your electricity usage is important to know, as it can dramatically lower your electric bill. 

For this reason, knowing the average energy usage per square foot is important. Knowing energy usage by square foot gives you a good estimate of how much energy your new Texas residence will use and can give you better control over your power bill. After all, estimated energy consumption is important to know if you want to lower your electricity bill. 

***- energy charge only, excludes recurrent fees 

Why Are Your Bills High?

If you have bought a new home and think that your new bill in Texas is too high, it is time to revise your electricity usage and maybe consider another electricity provider. The average kWh usage in your area can help to orient yourself in comparison to the neighbors, but there is more to it. Energy prices, the type of energy plan you’ve purchased, your location, and average electricity usage all play a role in how high your energy bill is. 

Energy Prices

Energy prices are the single most important contributor to your electricity bill. Electric bills usually contain several fields that explain to a minute detail how your electricity bill is formed. Besides the price of energy, you also pay the transmission fees and taxes, as well as other fees, for example, the green premium, which is used to ensure you get more electricity from green sources than many other states. 

Energy prices comprise: 

• The prices of the energy source (coal, natural gas) and the infrastructure necessary for renewable sources (solar panels, wind turbines, hydro dams, etc.), 
• The power plant prices – building and operating costs, as well as maintenance to ensure the durability of these immense buildings, 
• The TDU charges – Transfer and Distribution Utility takes care of the grid, expand it, and ensures there are no blackouts, 
• Any other fees your power provider may charge. These are usually flat fees and are applied irrelevant to the energy usage. 

Type Of Plan 

The type of energy plan you use also determines how high your electricity bill will be. There are several types of energy plans, all with their pros and cons. Read on to learn more about what type of energy plan is the best for you: 

• The fixed-rate plan offers fixed rates at somewhat higher prices than variable-rate plans, but also the peace of mind against the rising average price of electricity, 
• The variable-rate plan offers variable rates, great for the winter, bad for the summer. Not recommended, 
• Renewable energy plans, somewhat more expensive than regular energy plans, help combat climate change, 
• Other types of plans (no-deposit, prepaid, pay-as-you-go plans, etc.). These plans usually cost much more per kWh of electricity used. The average electricity rate with these plans is usually higher than $0.18

Location

Your location also plays an important role in the average cost of electricity and how high your monthly bill is. Your electricity bill in Texas depends on the average summer and winter temperatures, humidity levels, and wind (the chill factor both during summer and winter influences energy usage). Location, weather, and the energy efficiency of your home all play together to determine your monthly cost for electricity. 

Furthermore, your location also influences the electricity rate you pay because electric delivery does not cost the same in all areas. If you live in an area where there are many energy power plants, it is likely you will pay less for electricity than somebody living in an area far away from power generators. Fuel costs also play a role, so Hawaii electric rates are among the highest in the state, for the fuels have to be transported to Hawaii first and are then used to generate power. This increases average electricity bills. 

Consumer Usage

Finally, your energy rates depend on the consumer usage stated on your electricity plan. Electricity plan options in the US are generally sold in three tiers by energy usage. These tiers include: 

• 500 kWh / month, 
• 1,000 kWh / month, 
• 2,000 kWh / month. 

Which tier you should use depends on your average home electricity usage and correlates to the electricity rate you will be paying. The higher the usage, the lower the rate per kWh. Likewise, the lower the usage, the higher the rate pay per kWh of energy you use. 

Common Factors Affecting Energy Usage

As no two homes are alike, neither are their electricity bills. The average energy use of a household depends on a number of common factors affecting energy usage. These factors include the number of occupants, home design, energy source, and home age. Let’s read on to learn more about how these factors affect the energy used in your household and how you can save energy. 

Number of Occupants

The number of occupants is a no-brainer when it comes to the energy used in a household. The higher the number of occupants, the higher the energy use. All members of a family need to shower and have common necessities, such as light, appliance use, and A/C and heating needs. Furthermore, it takes more time and power to do the laundry, cook food, and clean after a larger number of occupants. An average US adult uses around 2,500 kWh of electric energy per year. 

Home Design

Your home design also affects your energy use. In Texas, where extreme temperatures have a significant impact on your electricity bill, houses painted in lighter colors with lighter roofs spend less electricity than homes in darker colors. This is because the lighter colors reflect more sunlight back onto the street and do not heat as much. 

Furthermore, your home design includes insulation, window, and door size, as well as any other features that may make your home spend less energy, such as the landscaping near the house (provides shading), special UV-reflective windows, or passive ventilation. These factors all work together to increase the energy efficiency of your home and protect you against price spikes during peak hours. 

Energy Source

The energy source you use in your home can significantly influence the prices you pay for electricity. If you use natural gas in the winter for heating and for hot water, your cost of electricity will be lower, as a part of your energy needs are taken care of through a different energy source. Likewise, if you use electricity for all your needs, your electric bill will be higher. 

Some new energy-efficient solutions try to bridge the gap in pricing between different energy sources. Air-source and water-source heat pumps, for example, are a big investment but can reduce your energy needs by over 90% for both heating and cooling. Furthermore, they can also cool your home for a fraction of the price, for as long as your area does not charge for underground water use. 

Home Age

Your home and appliance age is the sole most important factor affecting the cost of electricity you pay for. Home age combines all other factors, such as insulation quality, home design, and energy source, into one. In general, the older the house, the less energy efficient it is and the higher the energy bill every month. If you happen to live in an old house, ensure you invest money into insulation and high-quality windows and doors, as they can keep cold air in and hot air out much more efficiently than old windows and doors. 

Choosing The Best Electric Plan For You

When choosing the best electric plan for you, there are several other factors to consider. The cents-per-kilowatt price is just a part of the equation, so go through your exact energy use and take note of details, as they can help you save on your power bill. Factors to consider when choosing the best electric plan for you to include: 

1. Your average monthly energy use, 
2. The times you use the most electricity, and
3. The source of electricity you want to pay.

Your average monthly energy use will help you determine which energy tier you should purchase: 500, 1,000, or 2,000 kWh per month. Choosing the wrong tier can cost you a lot of money. Choosing the right tier will give you peace of mind in knowing that you won’t be paying electricity for a large house when in fact, you live in a two-bedroom apartment. 

Knowing the time you consume the most electricity can help you choose the plan suited for your needs. Many energy providers offer electricity plans which come with free nights or free weekends. If you use the most energy during these periods of time, you can benefit by choosing these energy plans. 

How Can I Estimate My Electricity Bill?

Your electricity bill is easy to estimate if you know your previous energy use. Energy use in a residential home fluctuates seasonally, meaning that your energy use in December of the current year will be similar to the energy use in December last year. However, in case you’ve purchased a new appliance or a device, your energy use is likely to increase. 

Furthermore, your energy use can increase if you change your life habits. In case you start spending more time in-house or change the way you heat your space or water, you are likely to see a change in the energy bill as well. In case you are moving into a house with the same set of appliances, you are likely to be spending the same amount of kWh every month as in your old house. 

Importance Of Estimating Electric Bill 

It is important to estimate your electric bill before moving into a new home. Before moving, you can ask the previous owner about their energy use. Ask to see their electricity bill and compare the appliances they have to those you would like to use. You are likely to use the same amount of energy, but understand that how much power you consume also depends on: 

• The number of family members, 
• Energy use habits, 
• The number and power of appliances, etc. 

FAQs

Conclusion

If you’ve started browsing the electricity market (especially in deregulated parts of the Texas energy market), you may have noticed that the Lone Star State electricity rates are among the lowest in the US. However, in Texas the average electric bill is still high. This is due to two reasons: Texas homes are bigger than in the rest of the US, and Texas electricity has a higher consumption due to the very hot weather. To ensure your electric bill does not interfere with your budget, you should estimate your energy consumption per square foot and start from there. Follow out comprehensive tips and ensure an energy-safe future for you and your family. 

Updated on 04-12-22