Most U.S. states get their power from one of two major American power grids. Texas is an exception, operating with a state-specific power grid that has brought it a certain degree of notoriety. Together with deregulation, this makes for a unique energy market in Texas.
These factors can impact your electricity bill, especially if you have a larger home. Learn more about Texas power usage, what it costs to power bigger houses, and how you can save both money and energy.
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Understanding the Energy Market in Texas
A comprehensive discussion of power usage in the Lone Star State must begin with two subjects: the unique Texas power grid and its deregulated approach to electricity generation.
The Texas State Grid
Let’s begin with the state’s grid. The electric grid in the U.S. is partitioned into sections called “interconnections.” There’s one interconnection serving the West, another serving the East, and a final one serving Texas.
The story of how the grid in Texas came to stand on its own begins early in the 1900s, when regulators sought to impose a bevy of different laws controlling how power generation and power usage occurred, which companies could sell electricity and at what price, etc.
Displaying the independence for which they would become famous, Texans decided that this wasn’t how they wanted to proceed, and they instead decided to operate their own grid. The companies responsible for energy production in Texas merged together to share power, refusing even to be exporters to neighboring states.
Getting to Know ERCOT
The main grid operator in Texas is the Electric Reliability Council of Texas, known more commonly as ERCOT, which is overseen by the Public Utility Commission of Texas (PUCT) and the state’s legislature.
Today, ERCOT’s 52,700 miles of transmission lines feed more than 86,000 megawatts of capacity from various kinds of power plants to over 26 million subscribers. In all, this is about 90% of the electricity usage in Texas, and includes urban centers like Dallas, Houston, and Fort Worth.
Geographically, ERCOT covers about three-quarters of the state. In the western parts of Texas, there are areas that are covered by the Western Interconnection, and likewise in the East, there are big sections that belong to the Eastern Interconnection.
But most of the land and the people are served by ERCOT whose primary energy source is natural gas, a fossil fuel. But Texas also enjoys ample renewable energy resources; 29% of its electricity comes from wind and just shy of 10% comes from solar. A non-negligible fraction (4%) comes from nuclear.
ERCOT came to national attention during the winter storm of February of 2021. The extreme weather caused blackouts that affected 4.5 million Texans, and there were 246 deaths as a result. Extreme weather events like this are bound to continue as climate change worsens, and in the years since the winter storm, ERCOT has taken steps to winterize the grid to guard against future outages.
Retail Electricity Providers
Because most of the Texas energy market is deregulated, the majority of Texans have the power to choose from multiple competing retail electricity providers (REPs) rather than being forced to buy from a single local provider.
There are more than 130 REPs in Texas, and they all offer different plans. This is yet another factor in your energy bill costs, including your specific plan, your energy usage, and your home size. The Public Utility Commission of Texas (PUCT) has created the Power to Choose website as a free resource for Texas residents.
Pro tip: Learn how to use the Power to Choose website to find the best options for your energy needs.
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Do Bigger Homes Use More Electricity?
At first glance, it might seem fairly obvious that energy consumption would be higher for bigger homes than for smaller ones. Surely, if an air conditioner has to cool twice as much space, that’s going to translate to roughly twice as much electricity used.
However, the story is somewhat complicated by the fact that building standards and energy efficiency increase over time. It’s possible for homes to get bigger on average while still requiring less energy if they’re using higher-efficiency HVAC systems and appliances, for example.
Weather can also have an impact. If winters are warmer than they were 20 years ago, less heating is required to maintain a comfortable temperature inside the structure.
How Can You Lower Your Power Usage in a Big Home?
If you’re moving into a larger home, congratulations! But you might be concerned about your future power bills. Fortunately, there are many things you can do to keep expenditures down.
You can unplug appliances you’re not using to avoid energy vampires and switch them out for more energy-efficient appliances.
You can turn off lights whenever you leave the room and change over to light bulbs that use less energy while lasting far longer. It helps to learn more about different types of light bulbs to make informed decisions.
Pro tip: Check out our other article for more tips to lower your energy bill.
How Much Energy Does a Large Home Use?
The electricity bill for a large home will depend on many factors, including when it was built (older homes will tend to have more lax standards around energy efficiency), the kinds of appliances that are installed (older appliances tend to be less energy efficient), and the energy usage of the occupants (you’re going to need more power if you like to weld in your garage).
That said, we can arrive at some basic estimates. According to data from the U.S. Energy Information Administration (EIA), in 2021 the average annual energy use for a single-family detached home was roughly 12.25 kilowatt hour (kWh) per square foot.
In the state of Texas, the average home is 2,170 square feet, so we would expect such a home to use 26,582 kWhs per year. There’s no set-in-stone definition of what counts as a “large” home, but for the sake of argument, let’s say it’s roughly 1.5 times as large as the average home. That would mean in Texas, a large home is 3,255 square feet and, assuming the same kWh per square foot numbers apply, uses 39,875 kWhs annually.
FAQs About Texas Power Usage
In the remaining sections, we’ll tackle some common questions people have about the way power is generated and used in Texas.
What’s the Name of the Electric Grid in Texas?
Unlike most other U.S. states, Texas has an independent, standalone grid. It’s operated by the Electric Reliability Council of Texas, which is better known by its acronym, ERCOT.
While ERCOT isn’t responsible for overseeing every kWh in Texas, it’s responsible for overseeing most of them. As much as 90% of the electric load in Texas is managed by ERCOT, and 75% of the geographic area of Texas is within its purview.
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How Much Energy Is Texas Using?
Based on figures from ERCOT, Texas was expected to require at least 86,000 megawatts (MW) for the hot summer months of 2021. A single MW of electricity is enough to power around 200 homes in Texas when power demand is at its peak, whereas 1 MW is enough to power 1,000 homes elsewhere in the United States.
Where does all this energy come from? As the ERCOT figures show, Texas is a prolific user of natural gas, which accounts for a little over half (51%) of the electricity generated in the state. Wind power comes in second, making up an additional 24.8% of all energy production. Coal (13.4%), nuclear (4.9%), and solar (3.8%) make up the remainder.
What’s the Average Cost of Electricity in Texas?
There are a few ways to tabulate the average cost of electricity in Texas. Here are a few factors that will affect the bottom line:
- The specific region
- Whether it’s an industrial or residential property
- How many kWhs are being used on average (most retail electricity providers charge less per kWh the more electricity is used)
While this is just a short list, the Public Utility Commission of Texas shows that the most common Texas energy plans generally range from around 10 cents to 18 cents per kWh.
Where Are Some of the Best Texas Neighborhoods to Buy Homes?
There are a number of wealthy neighborhoods in Texas, each sporting a range of estates available for sale (if your bank account can handle it!). Here are some that consistently top the richest cities list.
Southlake: Southlake has become a popular destination for major corporations, such as Neiman Marcus and Sabre Holdings, which might be why the average income is a very respectable $100,000 annually. It might also be why the average home price is $1.1 million.
Alamo Heights: With just 8,500 people nestled away in a community that’s surrounded by the broader San Antonio metropolis, Alamo Heights is a gem. It’s popular in part because it has the amenities of a bigger city while offering easy access to the nearby Natural Bridge Caverns, a major regional attraction. With a median home price of a little over $600,000, it’s more affordable than some of the other places mentioned here.
Coppell: Though, like the other entries, Coppell has excellent public schools and rock-bottom rates of poverty and crime, its real claim to fame is being 10 minutes away from the Legoland Discovery Center. It also has one of the lowest median home prices for this list at $414,000.
Heath: The cost of living in Heath is a bit on the high side (1.4 times the national average), but if you’re looking for reasonably-priced living accommodations and a peaceful suburban feel, Heath delivers in spades.
Highland Park: Highland Park is the single richest city in Texas, and is located in the middle of Dallas. Its residents can enjoy long, scenic bike rides after they patronize the myriad local specialty shops, but they can also expect a home to set them back $2.4 million.
Keller: The Dallas-Fort Worth suburb of Keller sports great schools and some of the state’s lowest crime rates. The median home price is $697,000, making it comparable to Alamo Heights in terms of expensiveness.
Why Is Texas So Hot?
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There are a number of geographic and meteorological factors that determine how hot a given place is.
Texas is in the southern part of the country. All things being equal, the closer you are to the equator, the warmer it’ll tend to be, so it’s no surprise that Texas is much warmer than, say, Colorado, Montana, or Vermont.
Then, there’s the fact that humidity tends to be pretty high in many areas of Texas. Higher humidities can make it feel hotter than the actual temperature, which contributes to the sense that much of Texas seems extremely warm.
Finally, there’s the fact that Texas is getting warmer over time because everywhere is getting warmer over time due to climate change. This isn’t likely to let up, and there are even forecasts that predict the heat index (how hot it feels when you factor in both temperature and humidity) could reach 125 degrees Fahrenheit shortly after 2050.
Getting a Handle on Power Usage in the Lone Star State
Texas is a warm southern state whose power needs are met by one of the only standalone grids in the United States. Though most of Texas’s electricity comes from natural gas, the Lone Star State is also a major user of renewable energy, predominately wind and solar, with a healthy dose of nuclear power thrown in for good measure.
Learn more about the Texas grid to get a better handle on the subject, and if you’re looking for energy plans in Texas, we have resources for that too.
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