The Long-Term Discount on Texas Commercial Electricity Contracts Just Disappeared

Texas commercial electricity pricing for long-term contracts has quietly increased above mid-term contracts, reversing a pricing relationship that had held for months. As of the July 8, 2026 catalog pull, long-term commercial plans priced at an average of 10.44 cents per kWh, while mid-term plans averaged 9.52 cents. That is a 0.91 cent premium for locking in longer, on a base that used to be the cheapest tier in the catalog.

The shift is recent. Three weeks ago the long-term average sat near 8.97 cents, roughly 8 percent below mid-term. The long-term tier has since repriced upward by more than 16 percent while mid-term drifted slightly lower.

The context around the shift is a market that also lost 303 plans in the last 24-hour scrape and gained 105 new contracts in the same window. Active commercial plans across the five Texas TDU territories now sit at 624, down from about 656 in late June. The catalog is churning and thinning at the same time.

Where the curve stands today

Averages across the current active commercial catalog:

Short-term (12 months or less): 426 plans, average 11.83 cents per kWh, median 12.50 cents.
Mid-term (13 to 24 months): 91 plans, average 9.52 cents per kWh, median 8.80 cents.
Long-term (25 months or more): 57 plans, average 10.44 cents per kWh, median 8.00 cents.

The medians tell a slightly different story than the averages: the median long-term contract still prints below mid-term (8.00 vs 8.80 cents). The gap has opened at the average, driven by a handful of long-term contracts pricing at the high end of the range (up to 19.1 cents per kWh in the current dataset). In other words, the cheapest long-term deals are still the cheapest deals in the market, but the typical long-term contract is no longer a clear discount over mid-term.

How much long-term repriced

The two data snapshots, three weeks apart, show the long-term tier moving up while mid-term moved the opposite direction:

June 22, 2026: long-term average 8.97 cents, mid-term average 9.75 cents.
July 8, 2026: long-term average 10.44 cents, mid-term average 9.52 cents.

That is roughly a 1.47-cent lift in the long-term average, or about 16 percent. Mid-term moved in the opposite direction, about 2 percent lower. The relationship between the two tiers flipped in that window.

The count moved too. Long-term is now 57 active plans (down from 62), and mid-term is 91 (down from 109). Both tiers thinned, but long-term thinned less on a percentage basis while repricing more sharply. The remaining long-term inventory is skewing higher.

What could be driving the shift

Three plausible drivers, none exclusive:

Summer risk premium

ERCOT is running its summer window with a reduced reserve buffer relative to prior summers. Retail providers pricing a 24-month or 36-month contract today are effectively selling forward power through two summer peaks. When wholesale forward curves for those summer months move up, longer contracts have to reprice to reflect it. Short-term plans, which do not have to cover next summer, absorb less of that premium.

Catalog thinning

The July 8 scrape retired 303 commercial plans in one 24-hour window, and 220 more were flagged as at-risk. When shelves thin, the cheapest plans tend to be the first to go (they are the most-shopped and the fastest to exhaust their block). The plans that survive on the shelf skew higher. That is likely what is showing up in the long-term average.

Provider caution on multi-year commitments

With PUCT still working through 2026 reliability rulemakings and ERCOT market design conversations still open, providers may be building conservatism into their multi-year price signals. Mid-term contracts, which mostly cover 18 to 24 months, escape the tail of that uncertainty.

What it means for commercial buyers

For a commercial shopper choosing contract length in July 2026, the practical read is straightforward:

The long-term discount is no longer automatic. Two months ago, taking a 36-month plan would have anchored below what mid-term was offering. Today, the average long-term quote will land above the average mid-term quote.
The cheapest long-term deals still exist. The long-term median at 8.00 cents per kWh is still the lowest median in the market. Buyers willing to shop the tail of the distribution can still lock a below-market long-term rate. It just is not the default anymore.
Mid-term is doing the work long-term used to do. Mid-term plans at a 9.52-cent average, 8.80-cent median, and 91 active plans are covering the space of a moderate commitment at a moderate rate. For buyers who want more than 12 months of price certainty without committing three years to a market that is repricing, mid-term is the current sweet spot.
Short-term stays the most expensive tier. At an 11.83-cent average and 12.50-cent median, month-to-month and 12-month plans are still pricing well above longer commitments across all TDU territories.

How to verify current bands

Aggregate per-TDU medians from the July 8 catalog pull:

Oncor: 9.40 cents per kWh (146 plans)
CenterPoint: 9.90 cents per kWh (138 plans)
TNMP: 10.06 cents per kWh (126 plans)
AEP Central: 10.43 cents per kWh (112 plans)
AEP North: 12.50 cents per kWh (102 plans)

Buyers in AEP North continue to pay the largest territory premium in the state, and Oncor buyers see the widest set of below-market options. These bands cover all contract lengths combined; the term-length inversion described above sits inside these territory numbers.

The catalog will keep moving. TxCP re-scrapes the 27 active REPs daily, and another 220 plans are currently flagged as at-risk of removal in the next window. Commercial buyers timing a renewal or a new contract in Texas should expect the rate curve to keep repricing across the summer.

Data notes

All rates in this article are averages and medians across the July 8, 2026 TxCP active-plan catalog for commercial usage bands, aggregated at the TDU and contract-length levels. Individual retail electric provider quotes will vary. No per-provider or per-plan rates are published here. Historical comparison uses the June 22, 2026 catalog snapshot.