Henry Hub Natural Gas at $3.29 in July 2026 Is Pressuring Texas Commercial Electricity Short-Term Rates

What Happened

Henry Hub natural gas spot printed $3.29 per MMBtu on July 15, 2026, according to Federal Reserve data via Trading Economics. That figure sits above the June 2026 monthly average of $3.15 per MMBtu published in the EIA Henry Hub spot price history, an intra-quarter climb of roughly 4.4 percent.

The gas move is not happening in a vacuum. ERCOT cleared a new 2026 July peak north of 83,000 MW on July 17, 2026, per ERCOT operations messages, and summer scarcity pricing is doing what summer scarcity pricing does. Natural gas sets the marginal ERCOT resource during almost every peak hour, so a 4 to 5 percent gas move at the hub does not stay at the hub.

Impact on Commercial Electricity Buyers in Texas

Answer up front: the shorter your contract, the more of this gas volatility you are absorbing right now. The TxCP Commercial Rate Index for July 20, 2026 covers 660 active commercial plans across the five Texas TDU territories, and the term-band spread is the widest we have tracked this year.

Short-term forwards are absorbing the gas move first. Short-term plans (1 to 12 months) average 11.25 cents per kWh across 448 active offers, with a median of 11.9 cents. Those curves reprice weekly against gas and heat-rate assumptions, so a summer gas print that runs above the June baseline lifts the offer sheet within days.

Mid and long-term forwards are pricing in mean-reversion. Mid-term plans (13 to 24 months) average 8.17 cents per kWh across 87 offers, and long-term plans (24-plus months) average 7.87 cents across 57 offers. That is a 32 percent average discount to short-term today, and roughly a 40 percent median discount at the individual TDU level for buyers in CenterPoint or AEP Central.

The gas-to-power passthrough is asymmetric. A gas rally in a tight summer week feeds short-term power quickly, but a gas selloff in a shoulder month does not fall through as cleanly into locked long-term supply. That asymmetry is why the current curve looks the way it does.

The Gas-to-Power Passthrough Framework

Three questions before you sign

1. Is your business exposed to weekly gas swings, or can it tolerate them? A cold-storage warehouse or a data hall needs a fixed base cost. A seasonal operator with light summer load has more room to ride short-term.
2. How much of your annual usage clears in the June to September peak window? If more than 40 percent of your kWh lands in peak months, short-term exposure this summer will show up in your bill by the second cycle.
3. What does your renewal calendar look like against the winter gas curve? A short-term contract that renews in November or December is renewing into winter heating demand, which historically firms Henry Hub. Timing matters.

What You Should Do

1. Pull a rate quote at both a short-term (12 month) and mid-term (18 to 24 month) horizon this week, not next month. The 32 percent average band is real and is priced today.
2. Ask your provider to break the offer into energy cost, capacity cost, and passthrough charges. The energy component is the gas-sensitive one; the other lines will move more slowly.
3. If your usage is peak-heavy, model both a 12-month renewal at today's short-term average of 11.25 cents and a 24-month lock near the long-term average of 7.87 cents. Even a partial lock changes the bill trajectory.
4. Confirm the offer's index method. Fixed-price offers freeze the gas exposure at signing; heat-rate index offers leave it live.

Questions to Ask Your REP or Broker

1. How does your offer sheet respond when Henry Hub moves 5 percent inside a summer month?
2. What is the current spread between your 12-month and 24-month price at my usage profile and TDU?
3. Which line items on the quote reset with wholesale gas, and which are fixed at contract inception?
4. Is there a blend-and-extend structure that locks part of my volume long and leaves part flexible?

Frequently Asked Questions

Does a 4 percent gas move really change my commercial electricity rate?

On a short-term offer that reprices weekly, yes. Roughly 45 to 55 percent of a Texas retail commercial rate is energy cost, and energy cost is dominated by wholesale gas plus heat rate. A 4 percent gas move can add several tenths of a cent per kWh to a fresh short-term quote inside a summer week.

Are mid-term plans actually cheaper than long-term today?

By median, close. As of July 20, 2026, the mid-term median across 87 plans is 6.91 cents per kWh and the long-term median across 57 plans is 7.11 cents. The averages diverge more because a small number of high-priced long-term outliers pull the mean up. The mid-term band is doing real work in the current market.

Which Texas TDU territory has the softest commercial rates right now?

By median across all terms, CenterPoint territory sits at 7.72 cents per kWh, the lowest of the five. AEP Central follows at 8.0 cents. Oncor sits at 9.25 cents, AEP North at 9.4 cents, and TNMP at 11.85 cents. Every one of those figures is aggregate across dozens of REPs and terms; a specific buyer profile will price differently.

Is this the right week to lock a long-term Texas commercial electricity contract?

The data is directional, not prescriptive. Long-term prices at 7.87 cents average are near the low end of the last 12 months of TxCP scrapes, and the gas curve is drifting up on summer demand. A buyer with peak-heavy usage and a renewal window inside the next 90 days has a defensible case to lock now. A buyer with a fall renewal has more room to wait.

For deeper market context, see our Weekly Market Insights and our Texas commercial rates dashboard.