Why This Question Does Not Have a Single Answer
Renters in Texas often assume the question of who pays electricity is settled by state law. It is not. Texas does not mandate that landlords include electricity in rent for standard residential leases. The obligation flows from the lease contract, not a statute. That means two renters living in the same apartment complex can have different electricity arrangements depending on when they signed and what their individual leases say.
This explainer covers four common electricity arrangements in Texas rentals, what each one means for the renter’s budget and legal exposure, how to read a lease for the relevant clauses, and what to do when an arrangement goes wrong.
The Four Arrangements You Will Encounter
1. Renter Sets Up Their Own Account Directly with a REP
This is the most common setup in single-family rentals and newer apartment complexes in deregulated Texas markets (Houston, Dallas-Fort Worth, and most of the state outside city-owned utilities and electric co-ops that have not opted into competition (Texas Utilities Code §§40.051 and 41.051) and outside the non-ERCOT areas like El Paso Electric territory and the Panhandle/South Plains Xcel (SPS) territory).
Under this arrangement, the renter contacts a retail electricity provider (REP), establishes service in their own name, and pays the REP directly. The landlord has no role in the electricity billing chain after move-in.
What the renter controls:
- Choice of REP and plan
- Contract length and rate type (fixed vs. variable)
- The timing of enrollment
What the renter is responsible for:
- Paying deposits if their credit history requires one
- Any early termination fees if they break a fixed-rate contract before the lease ends
- Setting up service before move-in to avoid a gap that could trip the breakers
This arrangement carries the most exposure and the most opportunity. A renter who shops carefully can lock a rate well below what a landlord-managed account might carry. A renter who does not shop carefully can land on a variable-rate plan that swings significantly month to month.
2. Landlord Pays Electricity and Folds It into Rent
Some landlords, particularly in older multifamily properties with shared or master-metered systems, pay the electricity bill and price it into rent. The renter has no direct relationship with the REP and no itemized electricity bill.
This arrangement creates several risks the renter should understand:
No usage visibility. Without an itemized bill, the renter cannot verify what the landlord actually paid versus what they were charged. Texas law does not require a landlord who folds master-metered electricity into rent to give renters a usage breakdown, though the landlord must follow Texas Utilities Code Chapter 184 and the PUCT rules under it if the property uses submeters or bills tenants a separate allocated electricity charge.
Rent increases as a proxy for rate increases. If the landlord’s electricity costs rise, the landlord can pass that through at lease renewal as a rent increase. The renter cannot negotiate the electricity rate directly.
No REP choice. The renter has no say in which provider or plan the property is on. If the landlord is on an inefficient plan, the renter pays for that inefficiency indirectly.
The upside is simplicity. One payment, no enrollment, no deposit requirement. For renters with thin credit files, this can lower move-in costs substantially.
3. Landlord Pays Electricity and Bills Renter Through Submetering or RUBS
Submetering and Ratio Utility Billing Systems (RUBS) are two mechanisms landlords use to allocate electricity costs back to individual tenants without each tenant having a direct REP account.
Submetering installs a separate meter for each unit. The landlord reads meters and bills each tenant for actual unit consumption. Under PUCT rules (16 TAC §25.142), the owner may not impose extra charges above what the retail electric provider or utility bills the property — no deposit, no reconnect charge, no administrative markup — and the only add-on generally permitted is a one-time late penalty of up to 5% on a delinquent account, and only if the written lease states the exact dollar or percentage amount.
RUBS allocates a portion of the master-meter bill to each unit based on a formula rather than actual unit usage. For electricity, PUCT rules allow the formula to use each unit’s share of square footage, its share of metered usage, or a combination; any other method needs PUCT approval (16 TAC §25.141). Renters in efficient units can end up subsidizing neighbors with poor consumption habits.
Texas does regulate these arrangements. The PUCT has rules under 16 TAC Chapter 25, Subchapter G (§25.141 for central-system/non-submetered master-metered allocation and §25.142 for submetering), that govern submetering and RUBS. Key protections include:
- Landlords using submeters cannot charge more per kilowatt-hour than the rate the landlord itself pays
- Renters must receive itemized bills when submeters are used
- Landlords must maintain submetering equipment in working order
If a landlord is billing through RUBS without disclosing the methodology, or charging above their own per-unit cost via submeter, that is a PUCT-addressable violation.
4. Mixed Arrangements in Multi-Use Properties
Some properties, particularly mixed commercial-residential buildings or older converted properties, run electricity through unusual configurations. Common rooms, hallways, and exterior lighting may sit on a commercial account while individual units have their own residential service. In rare cases, a renter’s unit may be wired to a shared breaker panel that also serves another unit.
These arrangements are legally murkier. A renter who discovers their unit is metered with a neighbor’s should request a written explanation from the landlord and, if unsatisfied, contact the PUCT’s Consumer Protection division.
Reading Your Lease for the Relevant Clauses
No Texas statute assigns the electricity bill when a lease is silent; the tenant protections in Property Code Section 92.301 apply only where the landlord has expressly or impliedly agreed in the lease to pay for the utility. Renters should look for specific language.
Phrases that place responsibility on the renter:
- “Tenant shall establish utility service in Tenant’s name prior to occupancy”
- “Tenant is responsible for all electricity charges during the lease term”
- “Utilities not included”
Phrases that place responsibility on the landlord:
- “Landlord shall provide electricity as part of rent”
- “Utilities included”
- “All-inclusive rent”
Phrases that signal a submeter or RUBS arrangement:
- “Electricity billed as actual use” or “allocated utility charges”
- References to a utility addendum or separate utility billing agreement
If the lease references a separate utility addendum, request that addendum before signing. It should specify whether billing is by submeter or RUBS, the administrative fee if any, and the billing cycle.
What is missing can matter as much as what is present. A lease that says “utilities included” without specifying electricity, water, and gas separately leaves room for dispute. Renters should request written clarification from the landlord before signing, and preserve that clarification in email.
The Deregulation Layer Texas Renters Miss
Most of Texas sits on the grid run by ERCOT, which also handles retail switching for about 8 million premises in the areas open to competition. In deregulated areas, renters who carry their own accounts have the ability to choose from dozens of competing REPs. That choice is meaningful.
LightCompanies currently tracks 34 REP profiles under active coverage. Among the plans LightCompanies has reviewed (11 plan reviews published as of the September 2026 research cycle, with EFL math done in-house), 10 flagged as high-gimmick — meaning their effective per-kWh rates diverged significantly from the advertised rate once bill credits, minimum usage thresholds, and tiered pricing were applied.
The practical implication for renters setting up their own accounts: the advertised rate on a plan is not the rate most renters will pay. The Electricity Facts Label (EFL) that every Texas REP is required to publish shows the effective rate at three usage levels — 500 kWh, 1,000 kWh, and 2,000 kWh per month. Renters should match their actual average usage to the closest tier, then compare that rate across providers rather than comparing headline numbers.
For renters in properties where the landlord controls the electricity account, this choice is unavailable. That is a real cost of convenience that does not appear in the rent figure.
What Happens When the Landlord Fails to Pay
This is the scenario that causes the most acute harm. If a landlord is paying electricity under an all-inclusive arrangement and stops paying the bill, the REP will eventually disconnect service. The renter loses power through no fault of their own.
Texas law addresses this. Under Texas Property Code Section 92.008, a landlord may not interrupt or cause the interruption of utility service the tenant pays for directly unless the interruption results from bona fide repairs, construction, or an emergency. And under Section 92.301, if the utility has cut off service — or has given the tenant written notice that service is about to be cut off — because the landlord did not pay a utility bill the lease obligated the landlord to pay, the renter may pay the utility to reconnect or avert the cutoff and deduct that amount from rent, terminate the lease by written notice with move-out within 30 days of the date the tenant got the utility’s notice of a future or actual cutoff, whichever is sooner, and recover actual damages.
If service is disconnected because a landlord failed to pay:
- Document the disconnection in writing immediately. Take timestamped photos of any disconnection notice on the meter.
- Contact the REP directly. Explain that you are a renter and that service is in the landlord’s name, and ask whether you can start service at the address in your own name.
- Send written notice to the landlord by certified mail demanding service be restored.
- If service is not restored within a reasonable period, consult a Texas tenant’s rights attorney or contact a local legal aid organization. Texas RioGrande Legal Aid and Lone Star Legal Aid both handle landlord-tenant cases for people who qualify.
Filing a complaint with the PUCT is appropriate if the landlord operates a submetering system and fails to maintain service or bills in violation of PUCT rules. The PUCT Consumer Protection Division complaint line (1-888-782-8477) is a public resource; the informal complaint process does not require an attorney.
Deposit Obligations When a Renter Opens Their Own Account
When a renter sets up a direct REP account, the REP may require a deposit. PUCT rules cap residential electricity deposits at the greater of one-fifth of your estimated annual bill or the sum of your estimated bills for the next two months (16 TAC §25.478(e)). The company must also refund the deposit, with interest, once you have paid 12 consecutive monthly bills without a late payment (16 TAC §25.478(j)).
Credit history drives deposit requirements. Renters with limited credit history, past REP collections, or recent bankruptcies should expect deposit requests. This is worth factoring into move-in cost planning alongside the rental security deposit.
PUCT rules require a company to skip the deposit if you are 65 or older and not behind on any electric bill, or if you are a certified victim of family violence; companies may also accept your payment history from a prior electric company, which is why a credit-reference letter helps (16 TAC §25.478(a)). Renters who have paid on time with a previous provider should request a payment history letter before switching providers or moving.
Checklist Before Signing or Moving
This list applies regardless of which of the four arrangements above applies to a given property.
- Read the lease’s utility section. If it is ambiguous, get written clarification.
- Ask whether electricity is metered to the unit individually or through a master meter.
- If RUBS or submetering applies, ask for the utility addendum and the PUCT-required disclosure.
- Estimate your expected monthly usage from prior bills or ask the landlord for the unit’s trailing 12-month usage history. If the unit is submetered or billed through an allocation formula, PUCT rules require the landlord to keep 12 months of tenant billings open for inspection or to state the unit’s average monthly bill for the prior calendar year in the lease (16 TAC §§25.141 and 25.142). If the landlord simply pays the bill, no law requires them to share it, but many will.
- If you are setting up your own account, pull EFLs for at least three REPs and compare effective rates at your expected usage level, not the advertised rate.
- If the landlord pays electricity, assess what happens to your budget if rent increases at renewal. Factor in that you have no direct rate negotiation lever.
- Confirm the date service must be active to avoid a gap at move-in.
The Core Distinction That Resolves Most Disputes
The question renters most often ask is framed as a rights question: who is supposed to pay? The accurate frame is a contract question: who does this lease assign payment to, and what remedies exist if that party defaults?
Texas gives renters meaningful protections when landlords fail their utility obligations, particularly around disconnection and submetering overcharges. But those protections only engage after a problem occurs. The lease is the document that determines the probability of a problem in the first place.
Reading it before signing is not a technicality. In Texas’s deregulated market, it is the decision that sets the financial parameters for the entire tenancy.