Compare offers from multiple REPs and optimize contract terms for mission-critical loads. Power My Business is not a REP or utility.
Power My Business is a comparison + quote-intake service, not a Retail Electric Provider (REP) or utility.
Texas operates the largest deregulated electricity market in the United States through the Electric Reliability Council of Texas (ERCOT), covering 90% of the state's load. Data centers in ERCOT territory can choose from dozens of Retail Electric Providers (REPs) competing on price, contract terms, and service quality. This competition drives rates 15-30% lower than regulated markets, but only if you negotiate effectively.
Unlike residential or small commercial accounts, data centers require custom contract structures that account for 24/7 continuous operation, high demand charges, power factor considerations, and mission-critical uptime requirements. Standard commercial rates don't reflect the unique load profile of data centers—facilities that accept generic contracts typically overpay by 20-35% compared to those who negotiate custom terms.
The key to reducing data center electricity costs in Texas is understanding the three components of your bill: (1) energy charges (¢/kWh for consumption), (2) TDU delivery charges (transmission and distribution fees), and (3) demand charges (based on peak power draw). Most data centers focus only on energy rates, but demand charges and TDU fees often represent 40-50% of total costs. Optimizing all three components through contract negotiation and operational changes delivers the largest savings.
Data centers operate fundamentally differently from typical commercial facilities, creating unique electricity procurement challenges that require specialized contract terms. Unlike office buildings that consume power primarily during business hours, data centers maintain near-constant load 24 hours a day, 365 days a year. This continuous operation means even small per-kWh rate reductions (0.5-1¢) translate to $50,000-$200,000+ in annual savings for mid-sized facilities.
Data centers typically maintain 80-95% load factor (ratio of average to peak demand), compared to 40-60% for office buildings. This consistent high load makes data centers attractive to REPs willing to offer volume discounts, but only if you negotiate for them. Standard commercial contracts don't include these discounts automatically.
Downtime costs data centers $5,000-$10,000+ per minute in lost revenue and SLA penalties. This makes power reliability non-negotiable. Your electricity contract should include 24/7 account management, emergency support, and clear protocols for grid stress events. Cheap rates mean nothing if your REP can't respond during an outage.
Data centers often expand capacity mid-contract, adding server racks and increasing load by 20-50%. Most standard contracts penalize load growth or require renegotiation at unfavorable rates. Negotiate for "load growth" clauses that automatically adjust rates for expansion, or include early termination rights if you plan to scale.
A single 15-minute demand spike—caused by spinning up new servers, HVAC failures, or backup generator testing—can add $10,000-$30,000 to your monthly bill through demand charge ratchets. Data centers need custom demand structures (ratchet-free pricing, demand caps, or time-of-use rates) that standard commercial contracts don't offer.
These differences mean data centers cannot use the same procurement approach as retail stores or office buildings. You need REPs who understand mission-critical operations, offer custom demand charge structures, provide interval meter data for real-time monitoring, and have experience serving facilities with high power density and continuous load. Generic commercial contracts leave significant savings on the table.
Data centers in Texas can choose from three primary contract structures, each with distinct risk/reward profiles. The right choice depends on your facility size, risk tolerance, energy management sophistication, and budget predictability requirements.
Fixed-rate contracts lock in a single ¢/kWh price for the entire contract term (typically 24-36 months), providing complete budget predictability. You pay the same rate whether wholesale market prices spike to 50¢/kWh during summer heat waves or drop to 2¢/kWh during mild weather.
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Indexed contracts tie your electricity rate to wholesale market prices, which fluctuate monthly based on natural gas costs, renewable generation, and grid demand. Your rate adjusts each month, typically tracking the ERCOT real-time settlement point price plus a fixed adder (e.g., market price + 1.5¢/kWh).
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Block-and-index contracts combine fixed and variable pricing—you fix a baseline percentage (e.g., 70%) of your expected load at a set rate, while the remaining 30% floats with market prices. This balances budget predictability with the ability to capture low off-peak prices.
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Before signing any data center electricity contract, verify these terms:
Understanding what drives your data center electricity costs is the first step to reducing them. Most operators focus only on the headline energy rate (¢/kWh), but four other factors often have larger impact on your total bill. Here's what actually moves the needle:
Your electricity bill has two components: (1) usage charges based on total kWh consumed, and (2) demand charges based on your highest 15-minute power draw (kW) each month. For data centers, demand charges often represent 30-40% of total costs. A facility consuming 500,000 kWh monthly at 8¢/kWh pays $40,000 in usage charges, but if peak demand hits 1,000 kW with a $15/kW demand charge, that adds another $15,000—bringing total cost to $55,000.
Reduction Strategy: Flatten your load profile by scheduling batch workloads during off-peak hours, implementing battery storage to shave demand peaks, and coordinating HVAC cycling to avoid simultaneous high-load events. These tactics reduce demand charges by 25-40% without cutting actual electricity consumption.
Load factor is the ratio of your average demand to your peak demand. A data center with 800 kW average demand and 1,000 kW peak demand has an 80% load factor. Higher load factors (85%+) indicate efficient, consistent operation and make you attractive to REPs for volume discounts. Low load factors (below 70%) signal spiky, unpredictable load that REPs price at premium rates.
Reduction Strategy: Improve load factor by adding more consistent baseline load (e.g., crypto mining, rendering farms) during off-peak hours, or by reducing peak spikes through the demand management strategies above. A 10-point load factor improvement (70% to 80%) can reduce total electricity costs by 8-12%.
Transmission and Distribution Utility (TDU) charges are non-negotiable fees set by Oncor, CenterPoint, AEP Texas, or TNMP for maintaining the physical grid infrastructure. These charges add 2-4¢/kWh to your bill and vary by TDU territory. Oncor (Dallas-Fort Worth) typically charges 3.2-3.8¢/kWh, while CenterPoint (Houston) charges 2.8-3.4¢/kWh.
Reduction Strategy: You cannot negotiate TDU charges, but you can optimize demand charges within TDU billing structures. Some TDUs use 4CP (four coincident peaks) demand charges—reducing load during ERCOT's four annual peak hours saves $20,000-$100,000 annually for large facilities. Work with your REP to identify these peak windows.
Hidden contract terms often add 10-20% to total costs. Common traps include: (1) demand charge ratchets (your demand charge stays at peak level for 6-12 months even if load drops), (2) power factor penalties below 0.95, (3) automatic renewal clauses that lock you into unfavorable rates, (4) pass-through fees for ancillary services, and (5) early termination fees that make switching impossible.
Reduction Strategy: Negotiate for ratchet-free demand pricing, power factor thresholds above 0.95, 90-day renewal notification windows, and capped early termination fees. Have an energy consultant or attorney review contracts before signing—$5,000 in legal fees can save $50,000-$200,000 over a 3-year contract.
REPs need this information to provide accurate quotes:
Texas operates the Electric Reliability Council of Texas (ERCOT), an independent grid operator managing electricity flow for 90% of the state's load. ERCOT is not a utility, not a REP, and does not sell electricity—it simply coordinates generation and transmission to keep the grid balanced. Data centers in ERCOT territory benefit from deregulation, which allows them to choose from dozens of competing REPs instead of being locked into a single monopoly utility.
Deregulation works through a three-party system: (1) Generation companies produce electricity at power plants, (2) Transmission and Distribution Utilities (TDUs) like Oncor and CenterPoint deliver electricity through physical infrastructure, and (3) Retail Electric Providers (REPs) buy wholesale electricity and sell it to end users like data centers. You choose your REP, but your TDU is determined by your physical location and cannot be changed.
This competitive market structure drives rates 15-30% lower than regulated markets in other states, but only if you actively shop and negotiate. REPs compete on price, contract terms, and service quality—but they don't automatically offer their best rates. Data centers that accept the first quote typically overpay by 20-35% compared to those who compare multiple offers and negotiate custom terms.
Power My Business is not ERCOT, not a utility, and not a REP. We are an independent comparison and quote-intake platform that helps data centers evaluate offers from multiple licensed REPs. We do not generate, transmit, or sell electricity. We facilitate the procurement process by normalizing offers, flagging contract risks, and coordinating the switching process—but the final contract is between you and your chosen REP.
The ERCOT market also means data centers face unique risks during grid stress events. During extreme weather (winter storms, summer heat waves), wholesale electricity prices can spike from $30/MWh to $9,000/MWh (the regulatory cap). Fixed-rate contracts protect you from these spikes, but variable-rate contracts expose you to massive bills. In February 2021, some Texas businesses on variable rates saw monthly bills increase 10-50x normal levels. This is why most data centers choose fixed-rate contracts for budget predictability.
Data center electricity rates and TDU charges vary by region in Texas. Here's what operators need to know about the four major metro areas:
TDU: Oncor (largest TDU in Texas, covering 400+ cities)
TDU Charges: 3.2-3.8¢/kWh (higher than Houston, lower than rural areas)
Dallas-Fort Worth is Texas's largest data center market, with major hyperscale facilities in Richardson, Plano, and Fort Worth. Oncor's 4CP demand charge structure means reducing load during ERCOT's four annual peak hours (typically summer afternoons) can save $50,000-$200,000 annually for large facilities. DFW benefits from abundant fiber connectivity and competitive REP pricing due to high data center density.
TDU: Austin Energy (municipal utility, not deregulated)
Note: Austin is not in ERCOT's deregulated zone
Data centers in Austin city limits cannot choose their electricity provider—they must use Austin Energy's regulated rates. However, facilities in surrounding areas (Round Rock, Pflugerville, Cedar Park) are served by Oncor and can shop for REPs. If you're considering Austin for a new data center, locate outside city limits to access competitive deregulated rates. Austin Energy's commercial rates are typically 20-30% higher than deregulated market rates.
TDU: CenterPoint Energy (covers Houston metro)
TDU Charges: 2.8-3.4¢/kWh (lowest in major Texas metros)
Houston offers the lowest TDU charges among major Texas metros, making it cost-competitive for data centers despite higher cooling costs due to humidity. CenterPoint uses standard demand charges (not 4CP), so demand management strategies focus on flattening monthly peaks rather than targeting specific ERCOT peak hours. Houston's proximity to natural gas production also provides price stability during wholesale market volatility.
TDU: CPS Energy (municipal utility, not deregulated)
Note: San Antonio is not in ERCOT's deregulated zone
Like Austin, San Antonio operates a municipal utility (CPS Energy) and is not part of the deregulated market. Data centers in San Antonio city limits cannot shop for REPs and must accept CPS Energy's regulated rates. However, facilities in surrounding counties (Bexar County outside city limits, Guadalupe County, Comal County) may have access to deregulated service depending on exact location. Verify TDU provider before signing a lease.
We simplify data center electricity procurement by handling the comparison, negotiation, and switching process. Here's how it works:
Submit your facility details through our online form or call (972) 972-9931. We need your service address, current usage (kWh and kW), and contract expiration date. No bill upload required initially—we can pull your usage data from your TDU if you authorize access.
We analyze your 12-month usage history, peak demand patterns, load factor, and power factor to identify cost reduction opportunities. If you have interval meter data (15-minute usage tracking), we'll identify demand spikes and propose mitigation strategies. This analysis helps us request custom quotes from REPs instead of generic commercial rates.
We request quotes from 5-10 REPs based on your load profile and contract preferences (fixed, indexed, or hybrid). We normalize offers by calculating total ¢/kWh cost (energy + TDU + demand charges) and flag contract terms like demand charge structures, power factor penalties, and early termination fees. You receive a side-by-side comparison showing total annual cost, not just headline rates.
Before you sign, we review the final contract for hidden fees, unfavorable terms, and compliance issues. We flag demand charge ratchets, automatic renewal clauses, pass-through fees, and early termination penalties. If needed, we negotiate with the REP on your behalf to remove problematic terms or improve pricing. This step prevents $50,000-$200,000 in surprise costs over a 3-year contract.
We handle the paperwork and coordinate with your new REP and TDU to ensure a seamless switch. The process takes 30-60 days (1-2 billing cycles) with no physical changes—your TDU continues delivering electricity while your new REP handles billing. We monitor the first 2-3 bills to ensure correct rates and resolve any billing errors immediately.
No Upfront Cost: Power My Business does not charge data centers for comparison or procurement services. We are compensated by REPs when you choose a provider through our platform. This commission model ensures we remain incentivized to find you the best rate—satisfied clients lead to long-term relationships and referrals.
When you work with Power My Business, you receive these deliverables at no cost:
Side-by-side comparison of 5-10 REP offers showing total ¢/kWh cost (energy + TDU + demand charges), contract term, demand charge structure, power factor penalties, early termination fees, and renewable energy options. We calculate total annual cost based on your actual usage profile, not generic estimates.
Plain-English summary of critical contract terms including demand charge ratchets, automatic renewal clauses, pass-through fees, load growth provisions, and early termination penalties. We flag problematic terms and negotiate with REPs to remove or improve them before you sign.
We track your contract expiration date and send renewal reminders 90-120 days before expiration. This ensures you have time to shop for competitive rates instead of being forced into automatic renewal at unfavorable terms. We also monitor market conditions and recommend early renewal if rates are trending upward.
If your clients require carbon-neutral operations, we can match you with REPs offering 50-100% renewable energy through Renewable Energy Certificates (RECs) or direct power purchase agreements (PPAs) with wind/solar farms. Renewable energy often costs the same or less than fossil fuel-based electricity in Texas.
No. Power My Business is not a Retail Electric Provider (REP) and does not sell electricity. We are a comparison and quote-intake platform that helps data centers evaluate offers from multiple licensed REPs in Texas. We facilitate the procurement process but do not supply power directly.
No. We are neither a REP nor a utility. Power My Business is an independent comparison service. The utility (TDU) delivers your electricity through physical infrastructure, while REPs supply the energy. We connect you with REPs and help you compare contract terms, but we do not own generation assets or transmission lines.
Most data centers choose fixed-rate contracts (24-36 months) for budget predictability and protection against wholesale market volatility. Variable rates expose facilities to price spikes during grid stress events. Large facilities (5+ MW) may use hybrid contracts—fixing 70-80% of load and leaving 20-30% variable to capture low off-peak prices.
Fixed-rate contracts lock in a single ¢/kWh price for the contract term, providing budget certainty. Indexed rates fluctuate monthly based on wholesale market prices, offering potential savings but high volatility risk. Block-and-index contracts fix a baseline percentage (e.g., 70%) at a set rate while the remainder floats with market prices, balancing predictability and flexibility.
Demand charges are based on your facility's highest 15-minute power draw each month and can add $5,000-$20,000+ to monthly bills. Data centers with high peak-to-average ratios pay 2-4¢ per kWh in demand charges. Load balancing, workload scheduling, and battery storage can flatten demand peaks and reduce these charges by 25-40%.
Begin shopping 90-120 days before your current contract expires. REPs offer better rates when they have time to compete for your business. Waiting until 30 days before expiration limits your options and forces you to accept higher rates. For large facilities (2+ MW), start 6 months early to negotiate custom terms.
Negotiate for: (1) Custom demand charge structures (ratchet-free or demand caps), (2) Power factor penalty thresholds above 0.95, (3) Early termination clauses if you plan expansion, (4) 24/7 account management and emergency support, (5) Interval meter data access for real-time monitoring, (6) Renewable energy options if required by clients.
We need: (1) 12 months of electricity bills showing usage (kWh) and demand (kW), (2) Service address and TDU provider (Oncor, CenterPoint, AEP, TNMP), (3) Current contract expiration date, (4) Expected load growth or changes, (5) Power factor data if available, (6) Renewable energy requirements if applicable.
Switching takes 30-60 days (1-2 billing cycles) after contract approval. The process involves no physical changes—your current TDU continues delivering electricity while your new REP handles billing. For mission-critical facilities, coordinate the switch to occur at month-end to avoid mid-cycle billing complications.
Most contracts allow 10-20% load variance without penalties. If your facility expands beyond this threshold, notify your REP immediately. You may need to renegotiate your contract or add a separate meter for new capacity. Some contracts include "load growth" clauses that automatically adjust rates for expansion.
Switching mid-contract typically requires paying early termination fees (ETFs), which can range from $5,000-$50,000+ depending on remaining contract length and facility size. Review your current contract for ETF terms. In rare cases, a new REP may buy out your contract if they expect long-term business from your facility.
We normalize offers by calculating total ¢/kWh cost (energy + TDU + demand charges) based on your actual usage profile. We flag contract terms like demand charge structures, power factor penalties, early termination fees, and renewal clauses. You receive a side-by-side comparison showing total annual cost, not just headline energy rates.
No. Power My Business does not charge data centers for comparison or quote-intake services. We are compensated by REPs when you choose a provider through our platform. This commission model ensures we remain incentivized to find you the best rate, as satisfied clients lead to long-term relationships.
Yes. Many Texas REPs offer 50-100% renewable energy contracts through Renewable Energy Certificates (RECs) or direct power purchase agreements (PPAs) with wind/solar farms. Renewable energy often costs the same or less than fossil fuel-based electricity in Texas due to abundant wind and solar resources. We can match you with REPs offering green energy options.
During grid stress events (extreme weather, generation shortfalls), ERCOT may issue conservation appeals or implement controlled outages. Data centers on standard commercial contracts are typically in the same priority tier as other commercial facilities. Some REPs offer interruptible load contracts—you agree to reduce load or switch to backup generators during emergencies in exchange for 10-20% lower rates.
Ready to reduce your data center electricity costs by 20-35%? Submit your facility details and we'll provide a comparison of offers from multiple Texas REPs within 24 hours. No upfront cost, no obligation.
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