Texas Has the Wildest Electricity Market in America. Here's How to Read It.

Grid Getter is partnering with WattTrim, a Texas electricity broker that audits your plan against your real smart meter data. We asked the WattTrim team to explain the Texas market to everyone who doesn't live in it, and to the many people who do and still find it confusing. — Josh

If you live in Phoenix, your electric company is SRP or APS and that's the end of the conversation. If you live in Dallas or Houston, you get to pick from dozens of companies and well over a thousand plans, and a fair number of those plans cost more in real use than their advertised price suggests.

I've been paying Texas electric bills since long before I started WattTrim. In 2014 I put solar on my house, signed a fixed-rate contract, and later found out the plan only paid me about 3 cents for every kWh I sent back to the grid. Between that and the solar loan, I was paying more than I had before the panels went up. I spent the next decade pulling my own smart meter data into spreadsheets trying to understand where the money went. WattTrim is what came out of those spreadsheets.

So here's how the market works, from someone who has been burned by most of it.

Three companies touch every kWh

Texas opened retail electricity to competition in January 2002. Since then, in most of the state's big metros, the power on your bill passes through three separate businesses:

1. A generator makes it and sells it into the wholesale market run by ERCOT.
2. A transmission and distribution utility (TDU) owns the poles, wires and meter, and moves it to your house.
3. A retail electric provider (REP) buys it, packages it into a plan and sends you the bill.

You only get to choose the third one. The TDU is set by your address. There are six of them in the competitive market: Oncor (most of Dallas–Fort Worth), CenterPoint (Houston), AEP Texas Central, AEP Texas North, TNMP and Lubbock Power & Light.

And plenty of Texans get no choice at all. Austin Energy and CPS Energy in San Antonio are city-owned and never opted in, and the same goes for most electric co-ops. If you're in one of those areas, this whole post is a curiosity, and you have a single rate schedule like everyone else in the country.

The part of your bill nobody can shop

The TDU's charges get passed straight through to you, whichever REP you pick. As of fall 2026, Oncor charges about $4 a month plus roughly 6 to 7 cents per kWh just for delivery. CenterPoint is about $4.90 a month plus a similar per-kWh charge. The Public Utility Commission resets these a couple of times a year, and lately they've mostly gone one way.

That matters because a lot of plans advertise an energy charge that leaves delivery out. A plan that says "9.9¢" can easily land at 16 or 17 cents once Oncor's share is added. When you compare plans, compare the all-in price on the Electricity Facts Label (EFL), which every plan is required to publish. The EFL shows the average price at 500, 1,000 and 2,000 kWh of monthly use, delivery included.

Those three numbers are where the games start.

The plan zoo

A shopper in Houston can choose between plans that work in completely different ways. A few of the common ones:

Fixed-rate plans are what most people should start with. One energy charge for 12, 24 or 36 months, plus the TDU pass-through. Boring, and that's a compliment.

Bill credit plans are the trap I see most. The plan knocks a flat amount off your bill, say $100 or more, but only if you use at least 1,000 kWh that month. That credit makes the 1,000 kWh price on the EFL look fantastic. Miss the threshold and you lose all of it. We worked an example in our post on the Texas bill credit trap: on one real plan, 950 kWh produced a bill of $186.20 and 1,000 kWh produced a bill of $67.00. Fifty kWh, a difference of $119. A household that uses 1,600 kWh in August and 800 in March will win the credit some months, lose it others, and pay a lot more over the year than the headline suggests.

Minimum usage fees are the mirror image. Use less than some threshold, often 500 or 1,000 kWh, and you pay an extra fee. Small apartments and solar homes get hit hardest, because a solar home's metered usage can drop far below that line in spring.

Free nights and free weekends plans charge nothing for energy during a set window, commonly 9 p.m. to 6 a.m. The catch is the daytime rate, which is higher than a normal fixed plan to make up for it. The TDU's per-kWh delivery charge still applies at night, so "free" means no energy charge, not a free kWh.

Variable-rate plans let the provider change the price month to month. You'll mostly end up on one by accident, which brings me to the most expensive mistake in Texas.

When your contract ends, the meter keeps running

When a fixed contract expires and you don't pick a new one, you don't lose power. You roll onto the provider's month-to-month rate, which is often far higher than what you were paying. Your provider has to send you an expiration notice, but it shows up as one more email, and a lot of people miss it. I've seen households pay the rollover rate for a year without realizing.

Put a reminder in your calendar a month before your contract ends. It's the easiest money in Texas electricity.

Why the wholesale market is so wild

Behind the retail chaos sits ERCOT, which runs the grid for about 90% of the state. Two things make it unusual.

First, it's mostly an island. ERCOT has only limited connections to the grids around it, so when Texas is short on power, it can't lean much on its neighbors.

Second, it's an "energy-only" market. Generators mostly get paid for the electricity they produce, not for standing by. The way ERCOT signals that it needs more power is by letting the price go very high during shortages. Wholesale power that usually trades at a few cents per kWh can spike to the cap, which today is $5 per kWh.

During Winter Storm Uri in February 2021, the cap was $9 per kWh and prices sat there for days. Customers of Griddy, a retailer that passed wholesale prices straight through, got bills in the thousands of dollars for a few days of power. That spring the Legislature passed HB 16, which bans plans indexed to wholesale prices for residential customers. Since then, every retail plan has a price set in advance. Your provider carries the wholesale risk, and that risk is priced into the plans you're offered.

Solar: no net metering, so read the fine print

Texas has no statewide net metering rule for the competitive market. Whether you get credit for the power your panels export, and how much, is up to your REP. Buyback plans range from a few cents per kWh, like the 3 cents I got in 2014, to plans that credit exports at the full retail energy rate. Some credits roll over but can never be cashed out. Some cap how much you can earn. Some of the best buyback plans have a higher import rate that eats the difference.

The general rule for most Texas solar homes is that a kWh you use yourself is worth more than a kWh you export, often two or three times as much. That's where batteries come in.

Where a home battery fits

A battery turns Texas's messy rate structures into something you can work with.

On a free nights plan, a battery can charge during the free window and run the house through the expensive daytime hours. Here's a rough example for a 13.5 kWh Powerwall. Say delivery adds 6.5¢ at night and the all-in daytime price is 22¢. Charging takes about 15 kWh because of losses, so it costs about $1 in delivery charges. The 13.5 kWh you then use during the day would have cost about $3. That's roughly $2 a day, or about $60 a month, before solar is counted. Your numbers will differ, so run them from your own EFL.

On a solar buyback plan with a weak export rate, the battery stores your midday surplus for the evening instead of selling it for pennies.

Batteries can also earn money from the grid itself. ERCOT has been running a pilot that lets aggregated home batteries bid into the wholesale market as virtual power plants, and as of September 2026 it had 293 MW of qualified capacity, including fleets of residential Powerwalls. Some retail plans pay you for letting them dispatch your battery during price spikes. Those credits are real, but compare them against what the same plan charges you for everything else.

Pick the plan from your data, not the label

Every home in the competitive market has a smart meter that records usage in 15-minute intervals, and you can get that data free through Smart Meter Texas. That's 96 readings a day. Two homes that each use 1,000 kWh a month on average can have completely different best plans, because one uses most of its power in the afternoon and the other runs its pool pump at night, or because one swings from 700 kWh in April to 2,000 in August.

That's the whole idea behind WattTrim. We take your Smart Meter Texas history and price it against more than 1,500 Texas plans, month by month, including bill credits, minimum usage fees, time-of-use windows and solar buyback. The audit is free. If you'd like us to keep watching after you switch, our monitoring service is $4.99 a month and alerts you when a better plan shows up or your contract is about to roll over. We're a licensed Texas electricity broker, and we earn commissions when someone enrolls through us, but a provider can't pay to rank higher.

If you're on a battery in Texas, your plan and your battery settings should be chosen together. The right plan makes the battery worth more, and the right battery schedule decides whether you actually collect.

This post was written by the WattTrim team. WattTrim is a licensed Texas electricity broker (PUCT No. BR260145).

A note from Josh: if you've picked a free nights or time-of-use plan in Texas, Grid Getter can keep your Powerwall on it. Set a Battery Threshold rule for the free window (for example, between 9 p.m. and 6 a.m., charge from the grid to 100% if the battery falls below 80%) and a Peak Time rule for the expensive hours, and Grid Getter checks them against your battery's actual state every minute. You enter the windows from your EFL yourself, and you can change them whenever you switch plans. More on the approach in Dynamic Electricity Pricing and Your Home Battery.