The Most And Least Expensive Cities for Electricity in Texas

The variation between Texas’ most and least affordable cities for energy

While the deregulated energy market has many benefits for Texas residents, such as greater autonomy in their electric choice, it also comes with nuances. One notable feature is that where you live directly impacts your rate — consumers from different parts of the state experience different energy costs.

The energy data experts at Choose Texas Power dug into our marketplace data to explore this variation and discover which cities pay the most and the least for power. Find out where your city lands and what factors influence electricity costs near you. This data is for the average purchase price, including utility delivery fees, for each city on our marketplace.

Top five least expensive deregulated cities

Caption: The top five least expensive cities in Texas for energy.

North Richland Hills, a suburb of Fort Worth, ranks as the cheapest city for electricity in Texas. A common trait between these top affordable cities is close proximity to a large city like Houston, Dallas, and Waco. Here’s why our energy experts believe these cities enjoy cheaper electricity:

• Greater competition: Metropolitan areas have a larger population than smaller cities, leading to greater competition between energy providers for your business. Increased competition may drive down the average electricity rates in these areas as providers strive to win customers.
• Modern infrastructure: High-income cities usually have more resources to modernize their infrastructure, making it more affordable to transport electricity to homes and businesses. A more modern system also requires fewer repairs, alleviating consumer bills.

Didn’t find your city listed? Enter your ZIP code on our marketplace to compare current energy rates near you.

The gap between the most expensive and the cheapest cities

San Angelo and North Richland Hills display some key differences that may contribute to their electricity price divide. One factor that stands out is the average household income. North Richland Hills has an average household income of $93,434 per year, whereas San Angelo averages $64,146, according to the U.S. Census Bureau. San Angelo currently falls almost 16% below the median Texas income of $76,292.

Income inequality is a potential factor in electricity price variations across Texas, as higher-income communities often benefit from better access to advanced technologies and resources.

Which communities pay more: urban or rural?

When comparing the highest and lowest paying cities, a common trend shows that rural communities pay more for electricity than urban communities in Texas. This discrepancy is influenced by several challenges rural communities face:

• Less energy-efficient homes: Rural homes are typically older and have a higher carbon footprint. These homes often lack traits like proper insulation or weatherization, which would improve their efficiency.
• Aging electrical infrastructure: Due to low population density, rural communities often struggle with outdated infrastructure that requires frequent repairs. These repairs can result in higher costs for residents through fees and taxes on their bills.
• Low-quality appliances: Households in rural areas usually have below-average incomes, limiting their ability to invest in high-quality household appliances like HVAC systems, washing machines, or renewable power alternatives that would decrease their electricity consumption.
• Transmission and delivery fees: Rural communities can experience higher transmission and delivery fees because they are more spread out compared to urban communities.

Key finding: energy prices shift by usage level

Our data also revealed the most and least expensive cities for energy change, depending on the usage tier. Texas energy plans are typically broken down into three usage tiers: 500 kilowatt-hours (kWh), 1,000 kWh, and 2,000 kWh. Explore how these Texas cities shifted according to usage level.

Low usage, high cost: the 500 kWh usage tier

Here are the most and least expensive cities for the 500 kWh usage tier, according to our marketplace data.

Caption: The highest- and lowest-priced cities for electricity plans at the 500 kWh usage tier.

Our data shows that low usage plans (in the 500 kWh tier) have the highest average price out of all usage tiers. One potential reason for this finding is that energy providers offer fewer incentives, such as bill credits, at the 500 kWh usage tier. In contrast, providers tend to offer more incentives for 1,000 kWh usage customers, causing 500 kWh plans to have a higher average price.

The 500 kWh usage tier also contains several surprising changes from our overall average rankings. Lubbock is one of the most affordable cities for 500 kWh energy plans, despite being one of the most expensive overall cities in Texas for energy. The reason for this shift could be Lubbock’s younger population of college students at Texas Tech University — 21% of the city’s population is between the ages of 20–29. College students typically live in student housing or apartments and have simpler energy needs. This could place more Lubbock consumers in the 500 kWh bracket, creating more competition for energy providers.

The best deal on electricity: the 1,000 kWh usage tier

Explore which cities rank the highest and lowest for purchase price in the 1,000 kWh consumption level.

Caption: The highest- and lowest-priced cities for electricity on 1,000 kWh plans.

The Energy Information Administration (EIA) calculates Texans use an average of 1,146 kWh of electricity per month, making this usage tier the most common. Unsurprisingly, this tier is also the most affordable, as these plans have the most competition. Energy providers offer more desirable rates for 1,000 kWh plans to attract customers and beat their competitors. Bill credit plans also contribute to this usage tier’s low average, since many reward this usage level. Rankings for this usage tier closely follow our overall data rankings.

Buying in bulk: 2,000 kWh usage plans

Find out which cities are the most and least expensive in Texas for high usage plans above 2,000 kWh.

Caption: The highest- and lowest-priced cities for electricity rates on 2,000 kWh plans.

In terms of cost, the 2,000 kWh usage tier falls in the middle — it’s cheaper than 500 kWh plans but pricier than 1,000 kWh plans. The highest-paying cities remain mostly the same as our overall data findings, with the exception of Lewisville entering the ranks. The lowest-paying cities had the most changes from our overall data, indicating that these new cities could have significant competition for high-usage energy plans.

Is the cheapest electricity rate the best option?

You might be surprised to learn that the lowest energy rate does not always lead to the best plan or cheapest power bill. The lowest rate may come with stipulations, like bill credit plans with usage requirements. Be sure to carefully read a plan’s Electricity Facts Label (EFL) and shop according to your typical usage level. If you’re unsure how much energy you use, check your past bills to learn your typical kWh consumption.

Still stuck? Call our energy specialists for help selecting the best plan for your home or business. 

Leverage our price comparison tool

Price comparison tools, like Choose Texas Power, empower consumers to take control of their energy decisions. You can compare electricity rates on our marketplace to find the best deal for your needs. Regardless of how much energy your home uses, we can help you locate an affordable plan aligned with your needs. Simply enter your ZIP code to get started.

Our marketplace is also equipped with educational resources to help you win in Texas’ deregulated energy market. Check out these helpful guides as you shop for your next energy plan:

• How to read your energy bill
• Types of energy plans
• How to reduce your energy bill
• How to choose an energy provider

Wondering where your city ranks?

If you’re curious where your city ranks for electricity pricing, explore the purchase price of these deregulated cities across the Lone Star State.