Texas Electricity Prices in 2026: What Rising Rates and Winter Grid Risks Mean for Your Power Bill

Texas electricity prices are expected to stay elevated into 2026, with forecasts showing modest price increases and continued winter grid risks. For households and small businesses, that makes planning ahead more important than ever.

Understanding why electricity rates are rising—and what ERCOT’s winter outlook actually means—can help you choose the right power plan and avoid unnecessary bill increases.

Where Texas Power Prices Stand Now

Most Texans currently pay about 14–19 cents per kilowatt-hour (kWh) for residential electricity, depending on their provider, usage level, and contract term. That’s significantly higher than in 2020, and higher than many people realize.

Why bills feel higher:

• Electricity generation costs have increased

• Transmission and distribution fees are higher

• Extra grid reliability costs are now built into retail electricity plans

Looking ahead, forecasts suggest Texas electricity prices could rise another 3–5% from 2025 to 2026. Longer-term projections show prices up nearly 30% between 2020 and 2030 if current trends continue.

For consumers, that means the decisions you make now—especially around your electricity plan—can affect your bills for years.

Why Electricity Rates Are Still Rising Into 2026

Several long-term factors are keeping Texas power prices under pressure:

Rapid population and economic growth Texas continues to add residents and businesses, driving record electricity demand and forcing new investment in power plants, transmission lines, and grid management.

Lingering costs from past winter storms Winter storm-related expenses and grid reliability reforms didn’t disappear. Those costs are now spread across customer bills.

Volatile natural gas prices Natural gas fuels a large share of Texas electricity generation. When gas prices fluctuate, wholesale power prices—and retail electricity rates—often follow.

Ongoing investment in wind, solar, and batteries Texas leads the nation in renewable energy and battery storage, but building and maintaining this infrastructure still costs money, contributing to higher overall rates.

What ERCOT’s Winter Outlook Really Says

ERCOT’s December Monthly Outlook for Resource Adequacy (MORA) indicates that Texas should have enough electricity to meet demand during a normal winter. Battery storage is playing a growing role in covering evening peaks and sudden demand changes.

However:

• Severe cold snaps remain a risk

• Multi-day freezes can strain power plants and natural gas supply

• Emergency alerts and conservation requests are still possible

While improved weatherization and batteries have reduced risk, the system is not immune to extreme weather. For consumers, that means lower—but not zero—risk of price spikes during major winter events.

How to Protect Your Household or Business

In this high-price, high-uncertainty environment, a few smart moves can make a big difference:

Lock in a fixed-rate electricity plan Fixed-rate plans can protect you from future price increases. Historically, spring and fall offer some of the best shopping conditions—but comparing plans now can still save money versus staying on an expensive default rate.

Improve energy efficiency Weatherization, insulation upgrades, smart thermostats, and shifting heavy electricity use away from peak hours can lower total usage and reduce bill impact.

Pay attention to ERCOT and utility alerts Winter conservation requests and demand-response programs can help stabilize the grid and sometimes offer bill credits or incentives.

Take Action Before 2026 Rate Pressures Build

Texas electricity prices are unlikely to return to pre-2020 levels, and most forecasts point to continued increases into 2026 and beyond. The best way to stay ahead is to act before higher rates are locked in.

👉 Enter your ZIP code now to compare electricity plans and find the best fixed-rate options available in your area.