When is the Best Time to Shop for Electricity in Texas?

Key takeaways:

• August is the cheapest month to shop for energy, with an average purchase price of 16.67 cents per kilowatt-hour (kWh).
• January is the most expensive month, averaging 17.47 cents per kWh.
• Choose Texas Power partners with the best power companies in Texas to connect our shoppers with affordable energy plans year-round.

The best and worst months to buy electricity in Texas

According to our marketplace data, August is the best month to buy electricity in Texas, while January is the most expensive.

This data from the past two years documents the average purchase price of electricity on our marketplace, including utility delivery fees. While certain months are more expensive than others, shoppers can find affordable rates year-round on Choose Texas Power. Shop rates as low as 7.4 cents per kWh from top providers like APG&E, Gexa Energy, TXU Energy, and more.

How weather conditions impact energy prices

Extreme weather in Texas exposes vulnerabilities in the power grid. Both winter and summer in Texas can bring severe weather patterns, such as hurricanes, snowstorms, tornadoes, and flash floods. These storms often cause damage to electrical lines, challenging the power grid and increasing energy costs. Consider how the combination of these two factors drives up the cost of electricity:

• Electricity demand: When the weather reaches uncomfortable temperatures, like heat waves in summer or cold snaps in winter, electricity usage skyrockets across the state. This creates a higher demand for power that the Electric Reliability Council of Texas (ERCOT) struggles to meet. Demand increases often lead to price spikes as power companies work to supply enough electricity.
• Power grid strains: Increased demand and dangerous weather conditions expose vulnerabilities in the power grid and can damage critical components like transmission lines and power plants. The cost of repairs and improvements is often distributed amongst consumers in the form of higher Transmission and Distribution Utility (TDU) fees.

Winter price spikes analysis

Winter Storm Uri in 2021 is an unfortunate example of how Texans have experienced some of the highest electricity rates during the winter. When the storm hit, a cold snap shut down the power grid, leaving millions without power in below-freezing temperatures. Texas’ aging infrastructure was not weatherized properly to operate during the cold storm. As a result, electricity generators couldn’t produce enough power to supply the demand, leading to multiple component failures. Consumers contended with shockingly high electricity prices as supply dwindled and utilities worked to repair the power grid.

Fall and spring bring relief for energy shoppers

Moderate electricity rates during fall and spring also support the connection between Texas weather patterns and electricity prices. Here’s how they correlate:

• Milder weather means energy consumption and demand are lower.
• Lower energy demand decreases the strain on the power grid, allowing electricity to move across the grid with ease.

Fall and spring could be a good time to browse electricity rates near you. Enter your ZIP code on our marketplace to discover your options.

Understanding August’s unexpected low prices

A surprising finding in our data showed that August ranks lowest for average electricity rates, despite consistently being the hottest month in Texas. However, some deeper analysis of consumer behavior could explain this anomaly.

High summer energy consumption

Considering August is the hottest month of the year, many Texans’ energy bills increase as they use more air conditioning. One hypothesis from our experts is that consumers shopping for new plans during this month may be more eager to select the cheapest plan available to offset their recent high summer electricity bills.

Peak moving season means more energy shoppers

Another potential reason for August’s low purchase price could be that summer is a popular season to move. Between all the costs associated with moving, many shoppers in this transition may lean towards the cheapest rate possible. The number of customers locking in the lowest rates possible could be a contributor to August’s low price average. If you are moving to Texas, check out our moving guide for tips on how to save on your electricity bill.

The lowest rate does not always mean lower bills

The cheapest electricity plan does not always lead to a lower energy bill. Deregulated energy plans are not one-size-fits-all — in fact, some plans are designed to benefit certain consumers over others. Here’s our advice to secure affordable energy bills.

• Prioritize compatibility: Read your past bills to determine your average usage and shop for plans that match your consumption range. Our marketplace lets you filter by home size to narrow your options.
• Be aware of usage requirements: Although bill credit plans offer saving opportunities, they need to match your average monthly usage to be beneficial. Check the Electricity Facts Label (EFL) to ensure the usage requirements align with your monthly patterns.
• Consider the contract length: Select a contract length that matches your lifestyle. If you need flexibility, opt for a short-term plan. However, longer contracts offer more predictable bills for those in long-term living situations.

Not sure what type of plan is best for you? Call the number on your screen to speak with one of our specialists and get matched with the right plan.

Price variations by usage tiers

Because energy rates vary by usage level, it’s important to consider how average prices differ based on which usage tier you fall into. Here’s the price per kWh for each month at the 500, 1,000, and 2,000 kWh usage levels.

Key variations across usage tiers:

• 500 kWh tier: December was the cheapest month; July was the most expensive.
• 1,000 kWh tier: August was the cheapest month; January was the most expensive.
• 2,000 kWh tier: August was the cheapest month; May was the most expensive.

Tips for shopping during an expensive month

If your contract ends during an expensive month, you may be stuck shopping while prices are high. Luckily, we have some tips to help you secure an affordable plan when rates are peaking :

• Compare your options: Use our marketplace to compare prices in your area. Rates may be high, but it’s important to weigh your options instead of jumping on the cheapest one. The best plan will align with your usage patterns.
• Explore bill credit plans: Bill credit plans offer a discount on your monthly electricity bill if you use a certain amount of energy. If the usage requirements match your energy patterns, these plans are a great way to attain cheap monthly energy costs.
• Consider a month-to-month plan: Month-to-month energy plans allow customers to cancel and switch providers at any time. This could be a good strategy to wait out an expensive month and switch once the shoulder season brings more favorable prices. While you may be subject to peak pricing, you can cancel with no penalty once prices drop.