Oncor Implements Rate Increases for East Texas Residents

Quality Cool Air, a locally owned HVAC contractor based in Palestine, Texas, has issued a winter energy advisory for East Texas residents amid rising electricity costs. The advisory comes as Oncor, the transmission and distribution utility serving much of North, Central, and East Texas, has implemented significant rate changes and a temporary surcharge.

On April 17, 2026, the Public Utility Commission of Texas approved a final order in Oncor’s comprehensive base rate review, adopting a settlement among parties. This order authorized an increase of approximately $560 million over Oncor’s 2024 test-year adjusted revenues, with the new rates taking effect on June 1, 2026. For a residential customer using 1,000 kilowatt-hours (kWh) per month on a retail plan priced at 15 cents per kWh, the base rate change adds about $4.64 per month, or roughly 3 percent.

A temporary surcharge was implemented by Oncor on August 1, 2026, to recover the difference between the rates in effect from January 1 through June 1, 2026, and the newly approved rates. Oncor estimated this surcharge at approximately $3.63 per month for the same 1,000-kWh residential customer.

On April 23, 2026, Oncor filed its first request under the Unified Tracker Mechanism, a process established by the Texas Legislature to review certain transmission and distribution investment costs together. Oncor estimated that, if approved as filed, the request would add approximately $3.85 per month, or about 2.5 percent, for a residential customer using 1,000 kWh per month. Oncor reported a 2026 capital expenditure budget of approximately $9.0 billion, roughly 25 percent above its actual 2025 capital spending, as it responds to rising demand across its territory.

The higher delivery charges reflect a utility investing heavily in a fast-growing grid. Because Texas’s competitive electricity market separates power delivery from retail supply, Oncor does not bill households directly. Retail electric providers collect Oncor’s delivery charges and pass them through on customer bills. As a result, delivery-related increases apply in the Oncor service area regardless of which retail electricity plan a household chooses.

Electricity prices are rising nationally as well. In its October 2026 Short-Term Energy Outlook, the U.S. Energy Information Administration reported that the average U.S. residential electricity price was 17.3 cents per kWh in 2025 and projected averages of 18.2 cents in 2026 and 18.7 cents in 2027. A hot summer drove up electricity use for cooling, with residential electricity consumption in the third quarter of 2026 increasing 6 percent compared with the same quarter a year earlier. The EIA also projected that wholesale electricity prices across the 11 trading hubs it tracks would average $52 per megawatt-hour in 2026, 11 percent higher than in 2025, citing weather events including Winter Storm Fern and high summer temperatures.

Quality Cool Air is urging East Texas residents to treat their heating and cooling equipment as one of the largest controllable costs in the household budget. According to the U.S. Energy Information Administration, space heating and air conditioning together account for more than half of the energy used in American homes. When the price of each kilowatt-hour rises, the efficiency of the equipment consuming those kilowatt-hours has a direct effect on the monthly bill.

The federal HVAC tax credit, known as Section 25C, previously allowed homeowners to claim 30 percent of the cost of qualifying improvements, up to $2,000 per year for qualifying heat pumps and up to $600 each for qualifying central air conditioners and gas furnaces. The One Big Beautiful Bill Act, signed July 4, 2025, as Public Law 119-21, terminated the credit for property placed in service after December 31, 2025. Equipment installed in 2026 does not qualify for the Section 25C credit. Homeowners who completed qualifying installations in 2025 may still be able to claim the credit on their 2025 federal tax returns using IRS Form 5695, and they should consult a tax professional about their specific situation.

Quality Cool Air is encouraging homeowners to base decisions on a professional evaluation of their current system rather than on age alone. The company advises several steps homeowners can take to reduce wasted energy this winter, including replacing or cleaning air filters, reviewing thermostat programming, having the ductwork evaluated, scheduling a professional inspection before the first hard freeze, and keeping the outdoor unit clear.

For commercial properties, the same cost pressures affect businesses across East Texas. Retail shops, offices, restaurants, and other commercial properties often operate rooftop units, split systems, and commercial refrigeration equipment for long hours, making efficiency losses more costly.