How should a small business pick an electricity plan in Texas?
Start with your usage, not the advertised rate. Then compare plans at a usage level close to yours, and read the term, cancellation fee and renewal rules before you sign.
If your peak demand is under your utility's threshold, you are on the simpler delivery rate. Above it, demand charges apply and a per-kWh rate alone will not give you the bill.
Who counts as "small"?
Texas uses two different lines, and they are easy to mix up.
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.
- For contract protections: the PUCT defines a small commercial customer as a business with peak demand under 50 kW in any 12-month period (rule 25.471).
A business can be over the delivery line and still be "small commercial" for protections. Look up both on your bill.
Step 1: Know your usage
Pull 12 months of bills. Write down monthly kWh and, if shown, peak demand in kW or kVA. Usage can swing by season, so a single month can mislead.
If you are new, use a similar business as a guide. EIA data puts the median restaurant at about 3,058 kWh a month per 1,000 sq ft, and the median office at about 842 (CBECS 2018, national). Those are rough.
Step 2: Compare at your usage
A plan's Electricity Facts Label (EFL) is the standard fact sheet. For small commercial customers it must show the average price at 1,500, 2,500 and 3,500 kWh a month. Use the one closest to you.
If demand charges apply, the label assumes a 30 percent load factor. Your own load factor may differ, and so will your bill.
On AskTexasEnergy, a price under the demand threshold is all-in: energy plus delivery plus fees. Over the threshold we show energy plus delivery and note that demand charges are extra. Today, business plans in the Houston area at 5,000 kWh a month show 10.0¢ to 13.1¢ per kWh all-in (energy, delivery and fees), checked October 14, 2026. If your business peaks above 10 kVA, CenterPoint demand charges are extra.
Step 3: Check the term
A longer fixed term holds your energy price longer. It also holds you longer. Ask what happens if you move, close or want to switch.
Texas rules block providers from offering small commercial customers a plan whose price is tied to the market (an indexed product). A fixed price stays fixed for the term. Delivery charges can still change.
Step 4: Ask about early cancellation
Find the early cancellation fee in the EFL and the Terms of Service. Ask whether it is a flat amount or depends on months remaining.
Small commercial customers cannot be charged an early termination fee in the 14 days before a fixed contract ends.
Step 5: Know the renewal rules
The provider must send a final expiration notice at least 14 days before a small commercial fixed-rate contract ends. If no notice is sent and you do not choose a new plan, the provider must keep you on the fixed terms until it sends one.
Put the end date on your calendar anyway. Start shopping well before the end date.
Step 6: Read rebate conditions
A bill credit (rebate) usually applies only in a stated usage range. If your usage falls outside it, you may not get it. Ask for the exact range and test it against your 12 months of bills.
What to ask for
Before you enroll, ask for the EFL and the Terms of Service. Check the product type, the term, the cancellation fee, how your price can change, and any demand charge description.
Frequently asked questions
Q: What is a small business for electricity in Texas?
A: For contract protections, a business with peak demand under 50 kW in any 12 months. For delivery charges, your utility's line: 10 kVA at CenterPoint, 10 kW at Oncor.
Q: What is an EFL?
A: The Electricity Facts Label. It lists the average price at set usage levels, the term, fees and how your price can change. For small commercial customers, it shows prices at 1,500, 2,500 and 3,500 kWh a month.
Q: Should I pick the longest term?
A: Not by default. A longer term holds the energy price longer but also holds you to the cancellation fee. Choose the term that fits how long you will stay at the location.
Q: What if my contract ends and I do nothing?
A: If you got the notice and do nothing, you move to the provider's default month-to-month plan, often at a higher price. If no notice was sent, they must keep you on your fixed price until they send one.
Q: Does the quoted price include demand charges?
A: Not always. Ask whether it includes delivery and demand charges. Our prices under the threshold are all-in. Above it, they are energy plus delivery, with demand charges extra.
Q: How do I see my peak demand?
A: Look for a kW or kVA line on your bill. Oncor also points customers to Smart Meter Texas for checking demand.
Enter your ZIP to see plans at your usage on the next page.
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