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If you run a small business in Texas, electricity is probably one of your biggest operating costs and one of the least examined. Most owners set it up when they open and never think about it again. Here’s how small business electricity in Texas works, and where that hands-off approach quietly drains your margins.
Key takeaways
- Business plans can include demand charges, which are based on your peak usage, not just total kWh.
- Contract terms for commercial customers are more flexible, and more negotiable, than residential plans.
- Restaurants, retail, salons and medical offices tend to have the most to gain from a review.
- Watt Panda reviews commercial bills for free and handles the switch around your schedule.
Commercial vs. residential electricity: what’s different
Commercial pricing is more complex. Your costs can depend on:
- Peak demand: the most power you draw at any one moment
- Load profile: what hours and days you use the most electricity
- Contract length and start date
- Demand charges from your utility for larger accounts
Most owners don’t see these details clearly on their bills, which means many are on plans that don’t match how their business actually runs.
The demand charge problem
For larger commercial accounts, utilities bill demand charges based on your highest usage in a short window, often measured in kW. Equipment that draws a lot of power at once, like HVAC systems, commercial refrigeration, compressors and kitchen equipment, can set that peak. For some businesses, demand-related charges are a significant part of the bill.
You can’t negotiate the utility’s demand rates, but you can manage your peak, for example by staggering equipment start-up times, and make sure your plan structure fits your load. Watt Panda will flag demand charges if they’re affecting you.
Industries that often overpay
- Restaurants and food service (refrigeration and cooking equipment)
- Retail stores (long hours of lighting and HVAC)
- Salons and spas (hot water, dryers and styling tools)
- Medical and dental offices (equipment-heavy and climate-sensitive)
- Auto repair shops (compressors, lifts and shop lighting)
Easy wins for any small business
- Put HVAC on a schedule that matches business hours
- Switch to LED lighting and add occupancy sensors in back rooms
- Keep refrigeration coils clean and door seals tight
- Know your contract end date. Commercial contracts can roll over too. Timing matters.
What Watt Panda does for small businesses
We review your commercial bill the same way we do residential bills, with extra attention to demand charges, usage patterns and contract terms. Then we compare plans from our provider network that fit how your business uses energy and handle the switch with no disruption to your operations. The service is free to you.
Helpful official resources: Public Utility Commission of Texas
Stop overpaying. Send us one bill.
We read the fine print, compare plans from our network of Texas electricity providers, handle the switch, and keep an eye on your renewal date. It’s free to you.
- $0 to you, ever
- No monthly membership
- Real people in Houston
Frequently asked questions
Can small businesses choose their electricity provider in Texas?
Yes. Businesses in competitive areas can choose a retail electricity provider, just like households.
What is a demand charge?
A charge based on the highest rate of power your business draws during a billing period, rather than your total usage. It mainly applies to larger commercial accounts.
How long are commercial electricity contracts in Texas?
Commonly 12 to 36 months, and sometimes longer. Start dates and terms are often more flexible than residential plans.