Texas Commercial Electricity Rates: Summer 2026 ERCOT Market Outlook
Summer 2026 wholesale forward electricity curves in the ERCOT North and Houston load zones are exhibiting elevated risk premiums. Driven by surging industrial and data center demand, alongside tightening generation reserve margins during peak August heat, Texas commercial energy buyers renewing standard fixed-price contracts this spring should expect forward supply prices to clear 15% to 20% higher than historical 2024-2025 settlement averages.
Executive Impact
- →Rising Base Demands: ERCOT\'s seasonal load forecasts continually adjust upward. Preliminary modeling suggests base grid demand could approach or exceed 86.4 GW on extreme heat days, eroding excess generation reserves.
- →Ancillary Cost Passthrough: Beyond pure energy costs (LMP), retail suppliers are heavily baking the anticipated costs of ERCOT Contingency Reserve Service (ECRS) inherently into commercial fixed rate offers.
- →Houston Zone Constraint: C&I facilities located in the ERCOT Houston zone face specific transmission congestion premiums, pricing noticeably higher than West and South zones.
Analyzing the ERCOT 2026 Summer Forward Curve
Texas operates an energy-only wholesale market. Rather than paying power plants simply to exist (a capacity market design used by PJM and ISO-NE), ERCOT allows prices to spike as high as $5,000/MWh during periods of scarcity. Retail Electricity Providers (REPs) must hedge this catastrophic risk by purchasing energy futures and derivatives for the summer months.
As we enter Q1/Q2 2026, the wholesale market correctly interprets tightening grid margins. The forward trading blocks for July and August 2026 delivery in the core ERCOT North and Houston hubs carry steep contango curves—a warning sign that traders lack confidence in the grid's ability to maintain high margins during extended +105°F heatwaves.
Projected C&I Rate Impact
A typical commercial manufacturing facility or large retail box operating in Dallas (ONCOR territory) or Houston (CenterPoint territory) depends on a blend of energy, ancillary services, and transmission to achieve their final rate.
| Pricing Component | Historical Standard (¢/kWh) | Projected Summer 2026 Trend |
|---|---|---|
| Wholesale Energy (Forward Swap) | 3.80¢ - 4.50¢ | +18% Premium |
| Ancillary Services (ERCOT) | 0.95¢ - 1.25¢ | Volatile (Driven by ECRS) |
| Retail Supplier Margin / Risk | 0.40¢ - 0.70¢ | Expanding slightly |
*EIA commercial baseline rates average 9.13¢/kWh in Texas, but forward contract renewals are heavily influenced by the facility's specific hourly load profile (e.g., heavily air-conditioning driven vs. flat 24/7 manufacturing).
Strategic Corporate Procurement Moves
Commercial buyers holding contracts expiring between May and September 2026 are highly exposed. Going onto a month-to-month variable rate during an ERCOT summer is effectively gambling against the weather.
Securing a 24-month or 36-month fixed-rate agreement today allows facilities to "blend" the expensive summer 2026 risk premium across the lower-priced shoulder months and outer years (2027/2028), significantly suppressing the immediate hit to operational budgets.
Source: ERCOT SARA Reports, ICE NGX, CME Group.
Protect Your Summer 2026 Operations
Are you renewing a Texas commercial contract before August? Compare local fixed-rate options for your facility to avoid peak summer volatility.