Texas Electricity Market Update: Q2 2026

The Short Version

-Texas residential electricity rates sit at approximately 15.41¢/kWh in Q2 2026, roughly 13% below the national average of 17.65¢/kWh and slightly lower than the 15.87¢/kWh reported at the end of Q1. 

-The Texas grid enters summer 2026 with an 18.3% planning reserve margin and more operating battery storage capacity than any other grid in the United States.

-ERCOT is preparing for a potential record summer peak of 92,211 MW, driven by data center load additions and a hotter-than-average forecast. 

-Solar is on track to exceed coal generation annually in ERCOT for the first time in Texas history. 

-Oncor and Centerpoint both received PUCT approval in April 2026 for a rate increase of approximately $7.00 and $5.10 per month respectively for typical residential customers in their service areas.

Summer is here, and ERCOT’s numbers tell a clear story: the Texas grid is bigger, faster-changing, and more consequential to Texans’ wallets than at any point in its history. As of Q2 2026, retail electricity rates have decreased slightly from Q1’s 15.87¢/kWh to approximately 15.41¢/kWh, reflecting the typical spring softening in wholesale prices. The market context surrounding that number, however, is anything but calm.

ERCOT is projecting a summer 2026 peak demand of 92,211 MW, about 8% above the all-time record of 85,464 MW set in August 2023. Solar generation is crossing a milestone no Texan has ever seen: on an annual basis, it will generate more electricity than coal for the first time. Battery storage has grown so fast that ERCOT now holds more operating storage capacity than California. 

Oncor and Centerpoint customers are absorbing the first significant delivery rate increase in years, approved by the PUCT in April, landing on bills before the hottest months arrive.

This update covers what each of those developments means for how Texas electricity is priced, produced, and delivered over the next 90 days.

In This Update

1. What Are Texas Electricity Rates in Q2 2026?

2. Solar Overtakes Coal: What ERCOT’s Generation Mix Looks Like in Summer 2026

3. Record Summer Peak Demand: What Is Driving ERCOT Load Growth?

4. Oncor, CenterPoint, and ERCOT: Major Utility and Grid Updates in Q2 2026

5. Common Questions About the Q2 2026 Texas Electricity Market

What Are Texas Electricity Rates in Q2 2026?

Texas residential electricity rates averaged approximately 15.41¢/kWh in Q2 2026, according to EIA data. A modest decline from the 15.87¢/kWh reported in March 2026, consistent with the seasonal pattern of spring prices softening before summer demand pushes rates back up. The national average has risen to 17.65¢/kWh, meaning Texas remains approximately 13% below the U.S. mean.

Within ERCOT, rates vary by service territory. AEP Texas North customers are seeing rates near 16.70¢/kWh, while CenterPoint Energy customers in Houston average closer to 14.93¢/kWh. These differences reflect both the energy charge and the delivery charge attached to each provider territory, and they will widen further as Oncor’s newly approved rate adjustment takes effect this summer.

At the wholesale level, spring typically brings the lowest prices of the year as moderate temperatures reduce demand and solar output peaks during long daylight hours. Forward summer on-peak contracts for ERCOT hubs, however, are pricing in significant heat-driven spikes. Natural gas at approximately $4.00/MMBtu continues to anchor summer peak-hour pricing, since gas-fired plants remain the marginal resource when the grid is at full stretch. Forward summer on-peak contracts at Texas hubs have been trading well above $50/MWh.

The gap between the best available fixed-rate plan and an expired or holdover variable plan remains the most direct lever on a residential customer’s bill. In the Energy Ogre member base, that spread frequently exceeds $30 to $50 per month, regardless of which direction market rates are trending at the aggregate level.

Sources: EIA Electric Power Monthly (April 2026); ElectricChoice.com Electricity Rates by State (June 2026); EnergyBot TDU Charges Texas (March 2026); EIA Short-Term Energy Outlook (April 2026)

Solar Overtakes Coal: What ERCOT’s Generation Mix Looks Like in Summer 2026

The headline in ERCOT’s generation mix this quarter is not a modest uptick in renewables. The EIA projects that, for the first time in Texas history, solar will generate more electricity than coal on an annual basis in 2026, with solar on track to produce approximately 78 billion kWh versus coal’s estimated 60 billion kWh. The gap will only widen.

Solar

Solar exceeded coal generation in ERCOT on a monthly basis in March 2026 and is forecast to maintain that lead through November. ERCOT is expected to account for approximately 40% of all new U.S. solar capacity additions in 2026. The single largest project coming online this year is the Tehuacana Creek 1 Solar and BESS project at 837 MW, the largest solar photovoltaic project expected to reach commercial operation in the country in 2026.

Midday wholesale prices continue to be suppressed by solar output. Generators averaged 24 GW between noon and 1 p.m. during summer 2025, up from 12 GW at the same hour in summer 2023. Natural gas’ midday share dropped from 50% in 2023 to 37% in 2025 as a direct result. This structural shift benefits customers on time-of-use plans oriented toward off-peak hours and creates increasing volatility between low midday prices and high evening prices.

Battery Storage

ERCOT now holds approximately 18.9 GW of installed battery capacity ahead of summer 2026, nearly triple the amount operational two years ago. By Q2, ERCOT surpassed California’s CAISO to become the grid with the most operating battery storage in the United States, representing about 37% of total U.S. capacity. More than 6,000 MW of new storage came online in the past year alone. Battery systems now power up to 10% of Texas load at peak discharge moments.

Battery discharge has become a primary resource for managing the evening ramp as solar production drops off. From approximately 7:00 p.m. to 10:00 p.m., battery output covers a significant portion of peak net load, reducing the reliance on natural gas at exactly the hours when generation costs are highest.

Natural Gas and Coal

Natural gas remains ERCOT’s largest source at approximately 42 to 43% of total generation, with its role increasingly concentrated in peak hours and cold-weather reliability. Coal continues to decline as older units retire without replacement. New thermal plant development remains thin: only 972 MW of new thermal capacity is expected online by summer 2026, versus nearly 23 GW of new solar. The retirement of coal is not a reliability risk in 2026, given the reserve margins in place, but it does concentrate weather-driven risk on natural gas supply performance during extreme events.

Sources: EIA Today in Energy: Solar vs. Coal in ERCOT (May 2026); S&P Global Battery Storage Report Q2 2026; ERCOT CDR Report (December 2025); CleanTechnica (May 2026); EIA Solar Generation Forecast (January 2026)

Record Summer Peak Demand: What Is Driving ERCOT Load Growth?

ERCOT’s official summer 2026 peak demand forecast is 92,211 MW, released in early June by the grid operator. That number sits approximately 8% above the all-time ERCOT record of 85,464 MW set in August 2023. 

The plausible peak range runs from 90,500 MW to 98,000 MW, depending on how hot July and August turn out to be. Texas summer power demand could jump nearly 10% from last year if the hotter scenario materializes.

From May through September 2026, ERCOT expects nearly 2 GW of new large energy users, primarily industrial facilities, data centers, and cryptocurrency miners, to come online. These additions arrive on a grid already absorbing the load from 342 data centers currently operating in Texas, drawing 7.6 GW continuously, with DFW accounting for the highest concentration.

The Long-Term Demand Picture

On April 15, 2026, ERCOT released a preliminary long-term load forecast for the 2026 to 2032 period, projecting that peak demand could theoretically reach 367,790 MW by 2032 if all interconnection requests in the queue were to materialize. Data centers account for approximately 93% of the large load requests currently under review. Non-cryptocurrency data centers alone represent 149,258 MW in the queue for 2029.

PUCT officials, in a review session on April 17, 2026, described the 367,790 MW figure as likely an overestimate, since not every queued project reaches operation. Texas Tribune reporting from that session noted the forecast is preliminary and subject to significant downward revision. 

Even at a fraction of the projected volume, however, the load growth trajectory is unlike anything the U.S. grid has encountered in modern energy history.

Senate Bill 6: Still Taking Shape

SB 6 continues to modify how large loads connect to ERCOT. Facilities drawing more than 75 MW must agree to curtail during grid emergencies, contributing demand response alongside conventional resources.

The $100,000 interconnection fee and the requirement to disclose duplicate queue applications elsewhere in Texas are gradually filtering phantom load entries out of planning forecasts, making ERCOT’s projections more grounded over time.

Grid Reliability for Summer 2026

ERCOT’s planning reserve margin for the peak load hour this summer is 18.3%, according to the December 2025 CDR Report. More than 58 GW of new generation came online since summer 2025, including 16.4 GW of solar, 14.7 GW of battery storage, 6.7 GW of natural gas, and 1.6 GW of wind. 

Energy experts at the University of Houston and elsewhere have assessed this as a materially stronger grid than what entered summer 2021 or 2023. Localized constraints in western ERCOT remain a risk when high demand coincides with low wind output and transmission congestion, but the statewide reliability picture is improved.

Sources: Houston Public Media: ERCOT Predicts Record Summer Energy Demand (June 2026); Fox 7 Austin: Texas Summer Power Demand (June 2026); ERCOT Long-Term Load Forecast Release (April 15, 2026); Texas Tribune (April 17, 2026); NPR: Can Texas’ Power Grid Handle Data Centers? (May 2026); ERCOT CDR Report (December 2025)

Oncor, CenterPoint, and ERCOT: Major Utility and Grid Updates in Q2 2026

Oncor: Rate Increase Approved April 2026

On April 17, 2026, the Public Utility Commission of Texas approved Oncor Electric Delivery’s base rate increase, affecting approximately 3.8 million homes and businesses in Dallas-Fort Worth and surrounding regions. For a typical residential customer using 1,000 kWh per month, the increase amounts to approximately $7.00 per month, a roughly 4.7% rise in total monthly costs.

About 45% of the approved increase is designated for recovering costs from severe weather grid damage. Because the new rates apply retroactively to January 1, 2026, Oncor is authorized to collect a temporary catch-up surcharge through the end of 2026 to recover the revenue gap between January and the April approval date. Oncor customers should expect their delivery charges to reflect this during the summer billing cycle.

Oncor’s $47.5 billion, five-year capital plan for 2026 to 2030 remains the largest driver of long-term delivery cost pressure in the DFW market. The plan is oriented primarily toward data center interconnection and 765-kV transmission backbone construction, both of which are designed to support the grid load additions now flowing through ERCOT’s queue.

CenterPoint Energy

No major CenterPoint delivery rates increased change took effect  in Q2 2026. Centerpoint customers can expect to pay $5 more per month for delivery charges. The next scheduled rate adjustment for CenterPoint customers is September 2026, when TDU charges update on their semi-annual cycle. 

CenterPoint customers in Houston continue to see rates in the 14.93¢/kWh range, somewhat below the statewide average, partly because they are not absorbing the same retroactive catch-up surcharge that Oncor customers face this quarter. CenterPoint’s previous storm recovery charges, covering Hurricanes Beryl and Francine and Winter Storm Enzo, remain on customer bills as approved in early 2026.

ERCOT: Summer Operations and Market Structure

ERCOT enters summer 2026 with materially improved operational posture. The Real-Time Co-Optimization Plus Batteries (RTC+B) market design, launched December 5, 2025, is now fully operational, co-optimizing energy and ancillary services every five minutes with battery state-of-charge as a live dispatch input. 

Early data from the Independent Market Monitor indicates the redesign is reducing inefficient dispatch and dampening price spikes during the evening storage transition. ERCOT’s two new internal organizations, Interconnection and Grid Analysis and Enterprise Data and AI, launched in January 2026, are now actively processing the record volume of large-load applications. 

The 765-kV Eastern Backbone transmission project, spanning approximately 1,108 miles at an estimated cost of $9.4 billion, remains on track for a 2030 to 2032 in-service date. Near-term transmission costs appear in delivery charges; the long-term benefit is reduced congestion and improved grid resilience.

Sources: Utilities For My Home: Oncor Rate Increase April 2026; PUCT Rate Case Approval (April 17, 2026); EnergyBot TDU Charges Texas (March 2026); ERCOT RTC+B Market Implementation

Common Questions About the Q2 2026 Texas Electricity Market

Why is my electricity bill higher this summer than last summer?

Several factors are overlapping in Q2 2026. If you are an Oncor or Centerpoint customer, a PUCT-approved delivery rate increase of approximately $7.00 and $5.00 respectively per month took effect with a catch-up provision covering January through April. 

Summer usage typically runs 20 to 40% higher than spring usage for most Texas households. And if your contract expired and you rolled onto a variable or holdover rate, the gap between that rate and the best available fixed plan can add another $30 to $60 per month on top of the usage increase.

Is the Texas grid reliable enough to handle summer 2026?

ERCOT’s planning reserve margin entering summer 2026 is 18.3%, and more than 58 GW of new generation capacity came online in the past year alone, including 16.4 GW of solar and 14.7 GW of battery storage. Energy experts have broadly assessed the grid as materially stronger than it was in 2021 or 2023. 

Localized risk remains in western ERCOT and during extreme cold events, when natural gas supply performance becomes the critical variable. Summer reliability, supported by expanded solar and battery resources, is generally considered improved.

What does it mean that solar is now generating more electricity than coal in Texas?

For the first time on an annual basis, ERCOT is projected to generate approximately 78 billion kWh from solar in 2026, compared to roughly 60 billion kWh from coal. This milestone reflects a structural shift years in the making: solar’s share of ERCOT generation grew from 4% in 2021 to over 12% by 2025, while coal has declined steadily as older plants retire.

 For consumers, the most direct impact is continued suppression of midday wholesale prices during high-solar periods, which is one reason fixed-rate plans locked in during spring often capture favorable forward rates.

How does data center growth affect my electricity bill?

The 410,000+ MW of large load interconnection requests in ERCOT’s queue are reshaping the grid’s long-term cost structure. More demand requires more transmission infrastructure, which is recovered through delivery charges paid by all customers regardless of provider. 

Data center growth also drives wholesale price increases during summer peak hours, since these facilities run continuously and cannot curtail load the way residential customers can. Senate Bill 6 requires new large loads above 75 MW to curtail during grid emergencies, a partial offset that did not exist in prior years.

When is the best time to lock in a fixed electricity rate in Texas?

Spring is historically the most favorable window to secure a fixed-rate contract, because wholesale forward prices are typically at their lowest before summer heat drives demand and prices up. For most Texans, the February-to-May period offers the best combination of plan availability and forward-contract pricing.

If your contract expires in summer or fall 2026, Energy Ogre is monitoring the available plan inventory on your behalf and will switch you at the optimal moment.

Summary

Summer 2026 arrives with a mixed picture for Texas electricity consumers. Rates have softened from Q1 but remain elevated compared to two years ago. The grid is better equipped than it has been in recent memory, with a record battery fleet and a landmark solar milestone. 

At the same time, Oncor customers are absorbing the first significant delivery rate increase in years, and the data center demand wave is not a temporary phenomenon. The structural forces reshaping ERCOT’s load profile are long-term commitments, not one-summer anomalies.

The decisions that determine what you actually pay this summer, which provider, which plan, which contract length, were largely made months ago. Energy Ogre monitors those decisions continuously, not once a year, so members are never left exposed when market conditions shift.

See How Much Energy Ogre Can Save You

About This Analysis

Energy Ogre is a Texas-based electricity management service that monitors the ERCOT competitive electricity market on behalf of its members. Energy Ogre is compensated exclusively by its members and not by retail electricity providers, making it one of the only independent sources of market analysis for Texas residential electricity consumers. 

This quarterly market update is produced by Energy Ogre’s in-house market analysis team using data from the EIA, ERCOT, utility filings, and proprietary member plan data.

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