Home / Texas Electricity

Who Consumes Most of Texas’ Energy?

Texas has led the United States in energy consumption for six decades and counting. It beats the next-closest state, California, by over 60%, making it an energy-hungry place.

However, headlines like this don’t always tell the whole story. It’s easy to attribute such statistics to a bunch of AC-cooled mansions sucking amperage from the system, but the reality is far more complex. Below, we’ll look at where Texas’ energy goes and how much individual Texans are really using.

The Burden of Energy Production

If you think Texas is just a shameless energy hog, think again: Texas is simply doing some hard work for the rest of the country.

Over half of Texas’ energy consumption goes into industrial use. A large portion of that industry is the energy sector, churning away to create products for the rest of the country to enjoy. Energy sources like natural gas and petroleum don’t suddenly appear in usable form — they have to be processed and refined to be usable. According to the U.S. Energy Information Administration, in 2020, Texas produced a whopping 43% of the entire country’s crude oil and over a quarter of its natural gas.

Even states that don’t produce these substances use them. However, the burden of energy consumption falls on Texas — it’s just that the title “largest energy consumer” doesn’t capture this subtlety.

In terms of industrial energy consumption per capita, though, Texas is saved by its population numbers. States like Louisiana, Wyoming, North Dakota, and Alaska are far ahead of it in per capita industrial energy consumption (though the most populous of these, Louisiana, barely has 15% of Texas’ population).

Energy production is not exactly thankless work, of course. Texas’ energy industry makes up about 10% of its GDP and earns hundreds of billions of dollars each year. In all, the tradeoff is a happy one.

More Stats on Per Capita Energy Use

Texas is actually closer to the bottom of the list than the top when it comes to per capita energy use in the residential and commercial sectors.

Take residential energy consumption. The average Texan burns 62.1 million BTUs per person per year, making Texas 40th on the list. For comparison, North Dakota is number one at 99.8 BTUs, and Hawaii is last on the list at 24.1 BTUs. A lot of this is because Texas has mild winters that don’t require much heating.

In terms of non-industrial commercial energy consumption, Texas is 28th on the list at 57.9 million BTUs per person per year. That is significantly lower than the District of Columbia’s 152.0 million BTUs and North Dakota’s 122.1 million, though it’s higher than Hawaii’s 30.0 million.

Again, these figures are tempered because Texas is the nation’s leader in wind energy. The Lone Star State cranks out around 28% of all wind energy in the country, and its wind power alone produces twice as much electricity as its nuclear stations.

Vault Energy Makes Comparing Texas Electricity Providers Easy

At Vault Energy, our mission is to make it easy to compare Texas electricity providers anywhere, anytime. Find cheap electricity and get the most value for your dollar using our side-by-side comparison tool.

Joining a National Grid — Is It Ever in The Cards for Texas?

Texas’ recent large-scale disaster at the hands of Winter Storm Uri stirred up a good deal of curiosity about the state’s future. Will Texas ever rejoin the national grid?

Today, the issue of tying into the national grid is a divisive subject. For some, it runs contrary to the very essence of Texas’ independent spirit and means more federal regulations, less competitive pricing, and a sacrifice of values. To proponents of the idea, it would mean greater reliability in the event of future catastrophic weather events, more advancements in future national environmental initiatives, and other advantages.

For many, the idea of at least being able to draw on outside power more reliably — the state has just five bridges to external power sources, three of which are to Mexico — would mean that future disasters like the one that took place in February 2021 could be avoided. The event led to increased skepticism around the Electric Reliability Council of Texas (ERCOT), which directly oversees nearly all of the state’s electric load.

It wasn’t just the outages that raised the specter of unification. During the crisis, Texas electric companies’ energy rates skyrocketed to preposterous levels, with some customers receiving electric bills for tens of thousands of dollars for a week’s worth of electricity. It turns out that Texas electricity rates were vulnerable to such a disturbance thanks to the presence of an electricity providers who passed wholesale electricity rates directly on to customers, which despite providing cheap electricity during times of low demand, could not prevent astronomical price hikes during the winter storm when demand soared and supply wilted. This provider is no longer in business in the Texas market.

Proponents argue that the future of the U.S. power grid is one of complete interconnection, in which an end-to-end grid powered largely by green energy provides power wherever it is needed. By remaining isolated, these proponents argue that Texas will continue to impede such progress.

To those opposed to joining the national grid, it comes down to money and independence. Texas electricity providers operate on a grid that does not, at least in the eyes of the law, cross state borders. That makes it exempt from the Federal Power Act’s regulations, which exercises oversight over energy that crosses state lines. This could mean higher electricity rates and greater regulatory pressure on Texas electricity providers.

Opponents also argue that there isn’t compelling evidence that being connected to the larger grid could have prevented the blackouts, as other areas were experiencing the same problem.

However, several days with no electricity, heat, or in many cases, potable water has left a deep imprint on many Texans. With the coming $2 trillion infrastructure bill, it will be interesting to see what position Texas takes for the future.

If you are looking for no-deposit electricity, cheap energy rates, or just the ability to compare electricity rates, look no further than Vault Electricity. We make it easy to find the best cheap electricity available anywhere in Texas.

What You Need To Know About The TXU Free Nights and Solar Days Plan (Updated 2019)

TXU was the first major electric provider in Texas to offer time of day pricing to the public with their introduction of the TXU Free Nights program in Texas. The plan was an immediate hit with consumers. The company later created a Free Weekends plan under the banner of TXU Energy Right Time Pricing. By the summer of 2013 the company had enrolled nearly 100,000 customers in free electricity plans.

TXU’s latest time-of-day pricing plan is TXU Energy Free Nights and Solar Days plan. Under this plan customers get free electricity from 8:00p.m to 5:00a.m. The idea with the Free Nights and Solar Days plan and similar plans offered by TXU and other electric companies is to shift consumption away from the 3pm to 7pm window that sees the most stress put on the state’s electric grid. This is the most expensive time for electricity providers to procure electricity.

Other providers have since introduced similar plans. They all attempt to address a major challenge that the Texas electric grid deals with. Capacity within a grid must be sufficient to cover peak demand periods. In Texas, peak demand is typically during the heat of the day when air-conditioners in homes and businesses are at maximum usage. Other times, particularly at night, most of that power generation capacity sits unused. This is why wholesale electricity prices plummet at night. Anything that spreads electricity usage out more reduces strain on the grid.

How much does TXU charge per kWh during peak hours?

During the non-free hours, as defined by the plan, there is an energy charge of 17.6 cents per kWh* if you live in the ONCOR service area which includes most of Dallas / Fort Worth and other parts of the state. In addition to this there is a TDU passthrough charge.

Predicting what your actual all-in rate will be can be tricky since much depends on not only how much electricity you use but what times of day you use it.

TXU Free Nights Solar Days EFL

As a guideline, TXU’s Electricity Fact Label (EFL) dated March 31, 2019 establishes an average price per kWh of 14.9 cents. This number makes the assumption that you use a total of 1,000 kWh hours. It also makes the assumption that a certain percentage of your usage falls within the “free nights” window as defined by the plan. Of course, your results may vary. If you can shift more of your usage into evening or night time hours, you could lower your effective rate. A greater percentage of usage during the non-free hours would result in a higher effective rate.

Is TXU free nights worth it?

TXU’s time-of-day plans are best suited for consumers who don’t use a lot of their electricity during hours of peak demand or consumers who are willing to change their habits by shifting power intensive activities such as laundry and dishwashing to the hours designated in the plan as free.

Some recommendations TXU makes for getting the most out of the plan’s free hours:

Using timers to control the start time of major appliances such as washing machines and dishwashers
Making use of programmable thermostats
Charging portable devices during free hours
Running pool pumps during free hours

TXU also offers tools using your smart meter to help you analyze your electricity usage and identify ways to lower your electric bill by shifting some of your usage to the free electricity times of day.

* Note: The rates mentioned in this piece are as of March 31 2019. To see up to the minute electricity rates for this and other plans, enter your zip code above.

What time does free nights start for TXU?

The free portion of the plan covers the hours of 8:00p.m to 5:00a.m.

Where does the solar power come from?

As the name implies, the non-free electricity portion of this plan is based on pricing for solar energy. By choosing this plan, you are paying to support solar power facilities. In reality, if you switch to this plan, your power will be coming from the same grid as before. This grid has electricity from a mix of sources that includes both renewable and non-renewable sources.

Identifying any particular kilowatt of electricity that comes off of the grid as solar would be a little like trying to guess what cows your gallon of milk came from. The power for this plan is considered solar because TXU purchases solar credits from solar farms to equal the amount of power you use during the day.

What You Need to Know About The TXU Free Pass Plan (Updated 2020)

TXU is the company that popularized Free Nights and other time of day electricity plans in Texas. Now the electric company that brought you Free Nights and Solar Days has introduced a plan called the TXU Energy Free Pass 12 Plan.

Note: Texas electricity rates change often. The rates referenced in this review are as of July 2020. To compare current TXU rates with other electric companies, enter your zip code at the top of this page.

How does the TXU Free Pass Plan work?

The plan is fairly simple. For each billing period, TXU takes your 7 highest electricity usage days and subtracts those days from your bill. For those days you are charged a 0¢/kWh energy charge and the typical pass through fees associated with Oncor or your local distribution utility are waived.

What is the KWh charge on the TXU Free Pass plan?

In the Oncor service area which includes, Dallas and Fort Worth, the energy charge is 15.7¢/kWh. In addition to that, you will pay the Oncor passthrough fee of 3.577¢/kWh. This brings the total electricity rate to 19.3¢/kWh for the days you pay for.

If you used exactly the same amount of electricity every day of a 30 day billing cycle, your 7 free days would account for 23.3% of your total electricity usage.

TXU publishes an average electricity rate of 13.9¢/kWh for 1000 kWh of usage in the Oncor delivery area. To arrive at this number, they assume that 33.1% of your electricity usage occurs during your 7 free days.

Every household is different. Its hard to predict exactly what your final average electricity rate would be.

The table below shows TXU’s published 1000 kWh average electricity rate for each delivery area including the 7 free days. It also includes the energy charge plus TDU pass through charge for the non-free days of the plan.

TXU Free Pass Electricity Rates
City (TDU)	1000 kWh Average Rate	Non-Free Day Rate
Dallas (Oncor)	13.9¢/kWh	19.3¢/kWh
Houston (Centerpoint)	14.9¢/kWh	20.9¢/kWh
Lewisville (TNMP)	14.9¢/kWh	19.9¢/kWh
Abiliene (AEPN)	13.9¢/kWh	19.1¢/kWh
Victoria (AEPC)	14.3¢/kWh	19.8¢/kWh

Is the TXU Free Pass plan a good deal?

The challenge for consumers is to shift their electricity usage habits to take advantage of the free periods. With Free nights or mornings plans, consumers can change when they do their laundry or wash their dishes. They can change their pool timers or do other things to plan their daily electricity-intensive chores at the right time.

It’s a little more difficult, however, to shift electricity usage to specific days of the month. Summer is approaching in Texas which means A/Cs are about to be running all day every day. You can’t just shove all of your air conditioning into 7 days of the month.

For most consumers, this plan would act somewhat like a free weekends plan. If you work during the week, you should be adjusting your thermostat to use less electricity to cool your home during the days when you are working. On the weekend, when you are more likely to be home, you probably want to keep the thermostat at a more comfortable temperature. You’re also more likely to do energy intensive household chores like laundry during the weekend. This adds together to make the weekends likely your highest electricity usage days.

What else do I need to know about the Free Pass plan?

The plan comes with a 12 month contract commitment
The cancelation fee is $150
It has a base charge of $9.95 per month plus a pass through base charge from your TDU of between $3.42 and $10.53 depending on where you live.
The plan has a renewable energy content of 6%

Texas Senate Passes Electricity Reform Bill

It took nearly five hours of debate, but on Tuesday, March 30, the Texas Senate finally signed off on a slate of legislation known as Senate Bill 3. Drawn up in response to the devastating power outages that left much of the state freezing during the worst winter storm in the state’s recent memory, this sweeping overhaul of the electric grid received unanimous support in the Texas Senate before advancing to the House.

According to top lawmakers in the Senate, SB 3 fixes many of the problems exposed by the storm. Among its mandates is that transmission lines, power generators, pipelines, and natural gas facilities receive weatherization upgrades to handle extreme weather. Many were unable to operate when temperatures reached the single digits.

What Caused This to Happen?

Predictably, the period in which this bill was formed has been rife with finger-pointing. First came a wave of blame against renewables, which many decried as responsible for the calamity. The two culprits were the intensity of the cold — which affected all fuel types equally — and the fact that Texas has its own isolated power grid and cannot receive help from other states during outages.

Those in the natural gas industry have pointed out that the power outages were responsible for the natural gas shortage, which caused more power outages to occur. They argue that weatherization would not correct the root of the issue — a point the Senate Bill addresses by delegating the decision around natural gas to the Texas Railroad Commission (which oversees the oil and natural gas industry in Texas).

What Does the Bill Contain?

The bill lacks any detail on how the required upgrades will be funded. Because of the high expenses involved in retrofitting power plants with weatherization equipment, it remains to be seen how energy providers will incorporate the various types of upgrades into their business models.

One area of improvement is the banning of all indexed retail electric plans. Customers with such plans purchased electricity from Texas electric companies at wholesale prices, a strategy that delivered cheap electricity during normal times but that, during the cold spell, led to astronomical electricity rates. Some bills soared as high as $15,000 or more over a week. One of these electricity providers, Griddy, declared bankruptcy in mid-March.

Another portion of SB 3 mandates the creation of a statewide emergency alert system that would keep Texans abreast of future energy blackouts. It also calls for the formation of the Texas Energy Reliability Council (TERC) to coordinate electric companies, regulators, and natural gas facilities and providers to make sure gas distribution is reliable.

Lawmakers used the opportunity to make operations more expensive for renewable energy providers, which Senator Charles Schwertner of Georgetown called “unreliable” in a recent statement. While he claims that too many government subsidies for renewables have created an unfair market advantage for those energy sources, it should be noted that the government subsidizes fossil fuels to the tune of around $20 billion per year.

Will SB 3 Protect Cheap Texas Electricity Rates?

In summary, SB 3 addresses many of the core problems behind Winter Storm Uri’s devastating effects. Though many of the political maneuverings within it are thinly veiled, such is par for the course in any new legislation. It will be fascinating to follow the rollout of this bill and to see how energy companies react.

To compare electricity rates and energy rates from Texas electricity providers, visit Vault Electricity, where we make it easy to find the best electricity plan available.

The Disaster that Shook the Texas Electricity Market

By now, the whole worlds know about the disaster that struck the Texas electricity grid when winter storm Uri struck the state in February. There is no sugar coating it. The debacle in February represented a failure of every level of the Texas electricity structure. One of the world’s major energy hubs was unable to keep its citizens from freezing in their homes.

The Texas wind energy sector is one of the largest in the world but struggled to operate under the severe and prolonged freezing temperatures. But wind was not the only or even the major contributor to the failure of the grid to supply enough power to keep the lights on for Texans. The entire grid infrastructure was caught unprepared and under-winterized.

Texas still gets its largest portion of electricity from natural gas powered plants. These failed in large numbers too along with coal and even nuclear power. The winter blast affected all of these sources in different ways. They all failed when they were needed most, leaving grid operators facing a nightmare scenario. As the temperatures plummeted and demand for electricity skyrocketed, power plants began failing in rapid succession. This was setting up a black swan scenario that could have resulted in a catastrophic failure that could have resulted in massive damage to the state’s electricity grid. Residents could have been without power for months as much of the grid would have to be rebuilt.

In order to prevent the grid from succumbing to a cascading catastrophic failure, grid operators had to take the drastic step of off loading demand from the grid immediately early in the morning of February 15^th. And they had just moments in which to do it. With snow covering virtually the entire state from Dallas to Houston to the border, they began cutting power to homes and businesses. This action may have saved the grid from long term damage but it began a days long stretch of misery for Texans who would not be able to keep their homes warm.

Wholesale Electricity Rates Soar

The Texas electricity market is structured to incentivize private energy producers to build enough capacity to support the states’s electricity needs. This is done by using the free market as a mechanism to set prices high enough in times of high demand to make it worth while for companies to invest in new power production.

Wholesale electricity rates update in real time to reflect the current demand for electricity within the marketplace. On a typical mild spring night in Texas, the prices in the wholesale electricity market bottom out – often coming close to zero. On hot summer afternoons, the spot price for electricity in Texas typically spikes. The maximum allowable rate in the Texas electricity wholesale market is $9,000 per megawatt hour. Over time the average price is around $50 per mWh. This translates to about 5¢ per kWh.

One of the roles of Retail Electricity Providers (REPs) in Texas is to smooth out the prices by taking on the risk of volatility in the wholesale market while offering a more consistent rate to end users of electricity.

Shocking Electricity Bills for Some

The most sensational aspect of the misery suffered by Texans that week were the eye popping electricity bills reported on social media and evening news reports. There were reports of electricity bills of over $16,000 for just a few days of electricity. This however was not the experience of the typical Texas electricity consumer. These bills reported in the media were largely, if not exclusively, from customers of the electricity provider Griddy Energy.

Griddy built their business by removing the safeguards provided by traditional electricity providers and exposing their customers directly to the prices of the wholesale electricity market. Customers paid Griddy a monthly membership fee to gain access to the wholesale rate for electricity.

Most of the time this worked out great for Griddy customers because most of the time wholesale rates are lower than the rates one will find on fixed rate plans from Texas electric companies. But when things went terribly wrong on the Texas electricity grid these consumers found themselves trapped. They had no choice but to pay up to $9 kWh for electricity or turn their power off and freeze.

For some perspective, a home that uses 2000 kWh of electricity in a month may expect an electric bill of about $200 if we assume an electricity rate of 10¢ kWh. If that same consumer had to pay $9 kWh, it would result in an electricity bill of $18,000!

For unsuspecting consumers, gambling on the wholesale electricity market was like canceling your homeowners insurance. In most months you would save money because most of the time insurance isn’t used. You could save money every month and could save money for years. But when disaster strikes you could end up paying a ruinous amount of money. Note: As of February 26^th Griddy has been barred by ERCOT from participating in the Texas electricity market. Their customers have been transitioned to other electric providers.

The vast majority of residential electricity users in Texas are on fixed rate electricity plans (or at least plans where rates are bound within a certain range). This means that even as the wholesale electricity market shot to 180 times its typical price, electricity rates on bills stayed within the expected range. For most Texans their electricity bill might be higher than normal to reflect higher usage during that period but will not be thousands of dollars higher than usual. Ironically, some consumers may not see their bills go up at all since they were without power much of the time when temperatures were at their worst.

Covid and Texas Energy Bills

How has the pandemic affected home-energy use?

Last March, Americans left their offices, gyms, and schools behind to enter a period of quarantine at home. While many regions have largely reopened, a significant number of Texans still work remotely or attend school online. This trend has increased waistlines and exacerbated online shopping habits — not to mention adding pressure on home utilities. As the United States approaches a full year of this pandemic, how has the new normal affected home-energy use?

Utility usage has decreased, but not for families.

Overall, energy use in Texas has decreased throughout COVID-19’s extended stay — largely due to closures in the commercial and industrial economies. But some of these traditional big business energy costs have shifted to individual workers and students. People power laptops, routers, and cell phone chargers now exclusively at home. Texas residential energy bills now absorb eight or more hours of electricity — formerly provided through employers and schools. Homeowners have also taken on the additional resource burden for new safety habits like washing hands and cleaning surfaces frequently.

With big industry off the grid, the decreased demand for electricity will hopefully keep utility costs stable. But, Americans have faced income challenges throughout the pandemic. Many have lost jobs or left jobs to care for others at home. Although commuting and dining-out costs have decreased, these savings get gobbled up by the additional at-home energy and water usage.

Extreme weather and high temperatures piled more stress on summer 2020. Southern states, especially, relied heavily on home air conditioning; heating and cooling costs contribute the most to high utility bills. Winter 2020, projected to bring mild temperatures, may bring some relief to Texas utility bills.

What can Texans do to save?

If people pay more than their normal share in energy costs, what can be done, especially with winter on the way? Many relief programs have been questioned with the ever-changing tide of politics. Individuals can research their local utilities for possible assistance or forgiveness, but no guarantee exists. Some companies provide prepay options that could mitigate financial unpredictability. Others incentivize energy-saving strategies like free LED lighting or home assessments, but plenty of at-home options exist that Americans can implement on their own.

Easy energy-saving tips to combat Covid-costs:

Effective strategies can limit electricity use without compromising at-home comforts. First, turn the thermostat down, especially at night. Turning the thermostat down by even one degree can contribute to a lower utility bill. Consider down comforters and flannel pajamas for holiday gift ideas. Second, turn down the water heater. More people at home means more hot water use, especially for showers and dishes. This can increase dramatically over the holiday season. Third, unplug appliances when not in use. Computers, televisions, and phone chargers use electricity even when not switched on. Implement a power strip and turn these off with the flick of a button.

Get some control back.

The year 2020 has been chaotic. Don’t let surprise utility bills contribute to stress and anxiety. Americans can create a better sense of control over their immediate home environment with some basic energy-saving tricks.

Compare The Lowest Electricity Rates In Your Area