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Lowest Cost Per Kilowatt Hour in Texas

The electricity market in Texas is competitive and confusing if you aren’t familiar with it. There are tons of different terms and names thrown around such as kilowatt-hour, kWh, rate, REP, and more. What makes things even messier is that most of Texas has deregulated electricity, which means you have the power to choose your own electricity provider.

The key to choosing the right electricity provider is understanding each of the terms involved with your electric plan. However, once you understand the different terms for electricity, your research and schooling are only just beginning. There are more than 120 retail electricity providers in Texas, and many of them offer up to six different plans. That means there are potentially 1,000 electricity plans to choose from, and the only way to make the right choice is to review each one. Doing this could take days, and there’s no guarantee that you’ll make the right choice when it’s all said and done.

If you’re determined to find the lowest cost per kilowatt-hour in Texas, you’ve come to the right place. Contact us to get started with a better, easier way to choose your electricity plan!

What is a Kilowatt?

The first key to finding the lowest cost per kilowatt-hour in Texas on your electricity plan is understanding what a kilowatt is and why it matters. A kilowatt-hour is the standard unit of measurement used by electricity companies when they calculate your monthly energy usage. A kilowatt-hour, or kWh, stands for the amount of electricity you use if you would keep a 1,000-watt appliance operating non-stop for an hour.

So, if you use 1,000 kilowatt-hours of electricity in a month, which is close to the Texas average, it’s the equivalent of running a 1,000-watt air conditioner for 1,000 hours straight. Although it sounds confusing, it’s the best system for calculating monthly energy usage as accurately as possible.

When you’re signing up for your electricity plan, the cost per kWh is the first term you should look at. It represents the rate you’ll pay for every kilowatt-hour of electricity you use. Let’s use the above example where you use 1,000 kilowatt-hours of electricity a month. Now, let’s say that you pay 10 cents/kWh for your electricity. That means your monthly power bill would equal $100 per month.

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How Does Texas Set the Kilowatt Per Hour Rate?

Because electricity is deregulated in Texas, each individual retail electric provider chooses their cost per kilowatt-hour. However, because there are over 120 REPs, these companies can’t simply choose an outlandish number and expect you to pay for their electricity. Instead, deregulation forces them to offer competitive rates and plans. Here are the factors that determine what each REP will charge for their electricity.

  • How much it costs them to produce or purchase the electricity from a power generating plant
  • How much it costs your local TDU to deliver the electricity to your home.
  • What the local electricity competition is like.
  • How much it costs to pay their employees and their own monthly bills and still turn a profit.

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Who has the Cheapest Electricity per kWh in Texas?

If the cost per kilowatt-hour is the only thing you have to worry about when choosing an electricity plan, you’re probably thinking that this shouldn’t be a problem. Unfortunately, there’s more to electricity plans than the rate listed in big, bold letters next to it.

Because the electricity market in Texas entices REPs to offer low, competitive rates, they’re finding new ways to make money. One of their favorites is to have built-in tiers that determine your rate according to how much electricity you use. Here’s an example.

Let’s say that you see an electricity plan with a listed rate of 10 cents/kWh. This rate is nearly three cents lower than the state average in Texas and seems too good to be true. That’s probably because it is.

What you won’t see unless you read the fine print and the usage terms of your plan is that this rate is based on using 2,000 kilowatt-hours of electricity. Here’s how it would look on a table.

Cost per 500 kWhCost per 1,000 kWhCost per 2,000 kWh
20 cents15 cents10 cents

As you can see, you’ll only pay 10 cents/kWh if you use a minimum of 2,000 kilowatt-hours. If you use between 1,000 and 2,000, you’ll pay 15 cents, and if you use less than 1,000, you’ll pay 20 cents. For this reason, it’s vital that you know your average monthly energy usage before pouncing on the first plan you see with a low rate.

What is a Good kWh Rate in Texas?

The average kWh rate in Texas is 12.8 cents. However, that doesn’t mean that any rate less than 12.8 cents is good. Finding the best kWh rate for you depends on your monthly energy usage. As you saw in the example above, your rate will vary according to your usage. If you are the only person in your house or apartment, you likely won’t use more than 1,000 kilowatt-hours, which means you’ll overpay big time on the above plan.

However, if you have a family of four or more people, the odds of using more electricity go up. If that’s the case, the plan listed above is dynamite!

Contact us at EnerGenie if you want to be certain that you’re signing up for the best electricity plan with the best rate. We’ll take your monthly usage into consideration when choosing your plan, which means we’ll find one that fits your needs.

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How to Find the Best Kilowatt Per Hour Rate in Texas

As you can see, there’s a lot more that goes into finding the lowest kilowatt per hour rate in Texas than meets the eye. Even if you know your monthly usage, it’s still tough to find the lowest rate because electricity plans aren’t always structured the same. You might pay more for using over 2,000 kWh or you might pay less. There are also minimum usage fees, early termination fees, and other charges that will get factored into your rate after you sign up.

When you contact us and choose your electricity plan with EnerGenie, you won’t have to worry about any of these things. We have a series of smart algorithms and smart technology that takes every variable imaginable into consideration when choosing your electricity plan. We’ll take everything into account from your location to your energy usage and everything in between when selecting the perfect electricity plan for you.

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