Do businesses pay more for electricity?
Per kWh, usually not. In Texas, businesses paid an average of 8.47¢ per kWh in July 2026. That average also includes areas without retail choice, such as city-owned utilities and co-ops, so it is not a shopping-market price. Homes paid 15.88¢. Across the U.S., it was 14.53¢ for businesses and 18.31¢ for homes (EIA, Electric Power Monthly, Table 5.6.A).
Business bills are bigger because businesses use more power. Some also carry a charge that home bills do not: a demand charge.
| July 2026, ¢ per kWh | Texas | U.S. |
|---|---|---|
| Residential | 15.88 | 18.31 |
| Commercial | 8.47 | 14.53 |
Why the averages differ
The EIA price is total revenue divided by total kWh. For commercial customers that revenue includes energy charges, demand charges and other charges. So the gap is not a result of leaving charges out.
Three reasons are commonly given for the gap. The EIA data does not break them out, so treat them as context:
- Size. A larger account spreads fixed charges over more kWh.
- Steady use. Many businesses use power across the working day. Their load is easier to serve than a home's evening peaks.
- Contract type. Power to Choose, the state's shopping site, says business shopping is often a negotiated purchase. The price can reflect your size and term.
These are not a promise about your bill. Divide your last bill's total by its kWh to see your own effective rate.
Delivery charges work differently
Delivery is set by your local utility under a tariff the PUCT approves. It does not change when you switch providers.
CenterPoint moves you to demand charges after one month above 10 kVA; Oncor after three months above 10 kW in a rolling year, or one reading above 12 kW. Full details in our guide to commercial electricity rates in Texas.
Contract terms matter more than they do at home
Texas gives small businesses some protections. A "small commercial" customer has a peak demand under 50 kW in any 12-month period (PUCT rule 25.471). For these customers:
- The provider must send a final expiration notice at least 14 days before a fixed-rate contract ends.
- A contract with an early cancellation fee cannot charge it in the 14 days before the contract ends.
- Providers cannot offer a plan whose price is tied to the market (an indexed product).
Larger accounts do not get all of these protections. Read your contract's term, cancellation fee and renewal terms before you sign.
A note on rebates
Home plans often advertise a bill credit (rebate) that applies only at certain usage. If a business plan offers one, ask which usage range it covers and what happens outside it.
Frequently asked questions
Q: Do businesses pay more per kWh than homes in Texas?
A: Not on average. In July 2026 the Texas commercial average was 8.47¢ and the residential average was 15.88¢ (EIA).
Q: Why is my business bill so large?
A: Businesses use more kWh. If your peak is above 10 kVA (CenterPoint) or in Oncor's over-10 kW class, a demand charge adds to it.
Q: What is the demand charge threshold in Texas?
A: It is set by your delivery utility. CenterPoint uses 10 kVA and Oncor uses 10 kW, measured over your highest 15 minutes in the month. Oncor moves you only after three months over 10 kW in a rolling year, or one reading over 12 kW.
Q: Can I go back to the lower rate schedule after crossing the threshold?
A: Only after a stretch below it. Oncor says your load must stay at or below 10 kW for 12 consecutive months. CenterPoint's tariff keeps you on the higher schedule for at least 12 months.
Q: Does switching providers change my delivery charges?
A: No. Delivery is set by your utility and is the same for every provider. Switching changes the energy price and contract terms.
Q: Is there a difference in contract protections?
A: Yes. Small commercial customers (under 50 kW peak) get set notice and renewal rules. Larger accounts get fewer.
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