Why Is My Electricity Bill Going Up?

If your electricity bill has been higher than you expected, you are not imagining it. Texas electricity costs have been rising steadily, and the reasons have nothing to do with your usage habits. Several large structural forces are driving prices up across the entire state. Here is what is actually happening.

What Is Driving Texas Electricity Demand to Record Highs?

Texas electricity demand is rising faster than anywhere else in the country because of AI data center construction. Massive facilities that run artificial intelligence, cloud computing, and streaming services are being built across Texas at an unprecedented pace. Each large data center can consume as much electricity as a small city. The U.S. Energy Information Administration has projected that this surge in demand could push Texas electricity costs up significantly over the next several years, because the grid cannot build new generation capacity fast enough to absorb all the new load.

When demand grows faster than supply, wholesale electricity prices rise. Those increases flow through to retail rates over time.

Why Are Natural Gas Prices Affecting My Texas Electricity Bill?

Most of Texas's electricity is generated from natural gas. The same natural gas is now being exported overseas to Europe and Asia at record volumes through liquefied natural gas (LNG) terminals along the Gulf Coast. Because international markets are paying a premium for U.S. natural gas, less of it stays in the domestic supply, and the price for what remains increases. Higher fuel costs mean higher electricity generation costs, which work their way into retail electricity rates across Texas.

How Does Summer Peak Pricing Add to My Bill?

ERCOT peak pricing refers to the elevated electricity prices that occur on summer afternoons in Texas, typically from June through September, when air conditioning demand reaches its highest levels. Many retail electricity plans include a separate demand charge or peak-hour surcharge that is billed in addition to the base energy rate. These charges can be significant and appear on your bill even if your personal usage has not changed from prior months. The combination of record summer temperatures and record grid demand has made peak pricing more pronounced in recent years.

What Are Transmission and Distribution Charges on My Bill?

Transmission and distribution (T&D) charges are fees assessed by the local utility company — such as Oncor in DFW or CenterPoint in Houston — to maintain and upgrade the poles, wires, and substations that deliver electricity to your home. These charges are separate from the energy rate charged by your retail electricity provider. As the Texas grid expands to accommodate new data centers and population growth, infrastructure investment costs are rising, and a portion of those costs is passed through to consumers via higher T&D rates. In Texas, these charges are set by the Public Utility Commission of Texas (PUCT) and are the same for all customers served by that local utility, regardless of which electricity provider they chose.

What Happens When Your Electricity Contract Expires?

One of the most common reasons electricity bills spike unexpectedly is contract expiration. When a fixed-rate contract ends, customers are typically moved to a month-to-month variable rate unless they proactively re-enroll in a new fixed plan. Variable rates float with wholesale market conditions. In a rising market, this means customers can see immediate and substantial rate increases the month after their contract ends, often without a clear notification from their provider. Customers who are unaware their contract has ended may stay on variable rates for months before noticing the change.

Questions About Your Electricity Service?

If you have questions about your electricity service, your current rate, or your contract status, you can reach our support team at any time through the chat button on this page, or call our electricity provider support line at 866-381-8214. PowerCord Energy is a licensed Texas electricity broker (PUCT Broker Registration BR240257) and operates under the oversight of the Public Utility Commission of Texas.

PowerCord Energy is a licensed Texas electricity broker (PUCT Broker Registration BR240257). PowerCord does not set electricity rates and does not guarantee any specific rate outcome. Electricity prices in Texas's deregulated market fluctuate based on market conditions.