The Average Price of Electricity in Texas is Increasing. Here's Why!


If you've been paying attention to your monthly utility bills, you likely noticed that it’s been increasing steadily. From 2020 through 2021 and part of 2022, the average electricity rate in Texas was between 11 and 12 cents/kWh. However, from mid-2022 to our current date, the average prices for electricity in Texas have increased to around 13 cents/kWh. 


While a mere penny might not seem like a huge deal, it adds up in a hurry. Rather than paying $115/month for 1,000 kilowatts of electricity, most Texans are now paying closer to $130. That's nearly an extra $200 per year! If you’re wondering why this is happening and what's causing the steady increase in electricity prices, GoodCharlie Energy has the answers. 

  1. Are Texas Electricity Rates Really Rising? 
  2. Is the Trend of Rising Rates New? 
  3. Why are Electricity Rates Rising in Texas? 
  4. How to Avoid Increasingly High Electricity Costs
  6. Why are Electricity Rates Rising in Texas_
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  8. Are Texas Electricity Rates Really Rising? 

No matter how you want to look at the situation, Texas's electricity rates are rising. On the low end, Texans should expect to pay at least $5 to $10 more per month for electricity. On the high end, however, that number can rise to between $50 and $100. It all depends on where you live, who your electric provider is, and the type of plan that you choose. Contact us at GoodCharlie Energy to find out how to avoid these price hikes. 

Is the Trend of Rising Rates New? 

While rates might be rising higher and faster than we’re used to, rising electricity rates aren’t a new trend. Starting in 2000, electricity rates have always increased and decreased according to the economy and other factors. In 2006, the average rates were actually higher than they are now despite the present inflation. 

In 2012, during a period of relative stability, average electricity rates were at their lowest since deregulation, coming in at just below 11 cents/kWh. While prices went back up to 13 cents in 2014-2015, they came back down to 11 cents in 2016 and 2017. Since then, rates have steadily risen and fallen at a very slow clip. Thanks to our current economic status and other factors, however, rates are rising again, but faster than we're used to. 

The Average Price of Electricity in Texas is Increasing

Why are Electricity Rates Rising in Texas? 

While rising electricity rates are nothing new in Texas, the current rate of increase is faster than usual and somewhat unexpected. Here’s why electricity rates are steadily rising throughout Texas. 

It All Started With Deregulation 

As we said before, rising rates are nothing new, and it all started when Texas deregulated its electricity in 2002. Since then, electricity rate trends have been like a rollercoaster, going up and down periodically. However, the current upswing is happening quickly and aggressively, so deregulation isn’t the only reason. 

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There's More Demand

One of the main reasons that electricity rates are rising in Texas is because of the law of supply and demand. Ever since Covid started, people have been flooding to Texas because of the Covid-friendly regulations. 

While we’re a welcoming state and love having new people move here, more people means more electricity. Power-generating companies simply couldn't keep up with the influx of people, which led to too many people and insufficient electricity. As a result, rates have been steadily increasing. 

Natural Gas is Hard to Come By

The second leading factor for rising electricity prices is that it’s more expensive to create. While Texas produces more electricity from renewable resources than any other state, nearly 50% of our power comes from natural gas. While we produce some of our natural gas, a good chunk of it comes from Russia.

Unfortunately, ever since Russia invaded Ukraine, we haven’t been importing natural gas from them. As a result, there simply isn’t enough natural gas to go around, and the supply that we do have is more expensive because it’s become a commodity. 

More Expensive for REPs 

Because electricity is more expensive and difficult to generate, it’s also more expensive for REPs to purchase. Therefore, because REPs are paying more for the wholesale cost of electricity, they charge more on the resale end. While higher rates don’t affect existing customers on a fixed-rate plan, they do affect new customers or those on a prepaid or month-to-month plan. 

Higher Delivery Costs 

The fifth factor leading to increasing electricity rates in Texas is that transmission and distribution utility companies are charging more to deliver electricity to homes and businesses. TDUs are responsible for managing the power lines, poles, meters, and cables that carry electricity to your home. Unlike REPs, the companies that deliver electricity are state and government-owned and can increase prices whenever they please. 

Through a combination of inflation, increasing wages, and high gas prices, it’s more expensive than ever to deliver electricity. This means that your REP has to pay more money to the TDU, which leads to you paying a slightly higher rate. 

The Power Grid is Aging

The final factor causing higher electricity rates in Texas is the  fact that the power grid is getting older and weaker. Most of the current power grid was built in the 1950s and 60s, making it more than half-a-century old. As a result, it isn’t powerful enough to keep up with the increasing power demands of Texas. 

The aging power grid is also experiencing more breakdowns and needs more repairs than it used to. Because the grid is managed by TDUs and the state government, the cost of repairs has the same trickle effect as that of delivery costs. They charge more money from REPs, which means REPs have to raise their rates. 

Are Texas Electricity Rates Really Rising_

How to Avoid Increasingly High Electricity Costs

If you want to avoid getting hammered with increasing electricity rates in Texas, you should sign up for a fixed-rate electricity plan from GoodCharlie Energy. When you sign up for a fixed-rate plan, your rates will stay the same throughout the duration of your contract. This means that if you sign up for a three-year plan at a rate of 13 cents/kWh, your rate will stay at 13 cents/kWh for the next three years. 

Texas electricity rates are on the rise, and nobody knows when they're coming back down. Lock yourself into a reliable, fixed-rate electricity plan from GoodCharlie Energy to avoid these unwanted increases. 

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