DEV Community: Matt Kundo

Texas Commercial Electricity Rates 2026: Action Guide - Texas Commercial Plans

Matt Kundo — Mon, 27 Apr 2026 00:06:55 +0000

      Commercial Rates & Pricing
      April 25, 2026
      8 min read

    U.S. Commercial Electricity Up 9%: Texas Commercial Electricity Rates 2026 Action Guide

U.S. commercial rates jumped 9% year-over-year in February 2026, but Texas deregulated commercial electricity rates moved 2.1% lower. Here is why the divergence matters for your next contract decision.

The News: National Rates Are Up 9%, but Texas Commercial Electricity Rates 2026 Are Moving Differently

The U.S. Energy Information Administration just reported that national commercial electricity prices rose 9% year-over-year in February 2026, reaching 9.54 cents per kilowatt-hour on average. For commercial electricity buyers in regulated states, that increase flows directly through utility rate filings. For Texas commercial electricity rates 2026, the deregulated Electric Reliability Council of Texas (ERCOT) market tells a different story.

In the week of April 14 through April 20, 2026, average Texas commercial electricity rates moved 2.1% in the opposite direction as 358 commercial plans exited the market and surviving providers competed harder on price. That divergence between the national trend and the Texas trend is the most important signal commercial buyers can use to evaluate their next contract decision, especially with summer peak demand approaching.

What the EIA Data Actually Shows

The EIA's February 2026 Electric Power Monthly release puts U.S. commercial electricity at 9.54 cents per kilowatt-hour, up from 8.75 cents per kilowatt-hour in February 2025. Across all customer classes, total average retail revenues rose 9.0% year-over-year to 14.36 cents per kilowatt-hour, with residential at 17 cents and industrial at 8.66 cents.

The U.S. Chamber of Commerce summary of the EIA data emphasizes a critical point: state-by-state variance is enormous. Most of the national increase is attributed to wholesale generation fuel costs, transmission and distribution infrastructure investments, and persistent demand growth from data centers. The 9% national figure is an average that obscures very different realities in regulated and deregulated markets.

For a 500-kilowatt commercial account using 200,000 kilowatt-hours per month, a 9% rate increase translates to roughly $1,580 in additional energy cost per month, or about $19,000 per year, before demand and delivery charges. That dollar figure is what should drive the analysis behind your next contract renewal.

Why Texas Is Different

The Texas commercial electricity rates 2026 picture diverges from the national average for three structural reasons that buyers in regulated markets do not have to think about.

First, ERCOT is a competitive retail market. When wholesale costs rise, regulated utilities pass the increase through to commercial customers via rate filings. Retail Electric Providers (REPs) in ERCOT cannot. They have to absorb margin compression or lose customers to competitors who price more aggressively. The 358 plans that exited the Texas market in mid-April 2026 reflect that competitive pressure, and the surviving plans are competing harder on price as a result.

Second, ERCOT wholesale prices have been suppressed by record West Texas wind generation through spring 2026. When wind output surges, real-time prices on the ERCOT grid drop, sometimes into negative territory during overnight hours. Index-priced commercial contracts pass that wholesale benefit through to buyers. Fixed-rate contracts do not. The real-time ERCOT grid conditions are publicly available and are worth monitoring before any contract decision.

Third, Texas commercial buyers face 4CP risk that national rate comparisons miss entirely. The four coincident peak (4CP) is the four highest hours of ERCOT system demand each summer (June through September). Your facility's demand during those four hours sets the transmission cost allocation you pay for the following 12 months. A 9% increase in national commercial rates says nothing about your 4CP exposure, which can easily dwarf the energy rate component of your bill if you have large summer afternoon load.

The historical Texas electricity rate trends also help anchor where current pricing sits in context. The combination of competitive REP pricing, wind-suppressed wholesale costs, and 4CP exposure means Texas commercial buyers face a strategic choice that buyers in regulated states do not.

The Texas Rate Divergence Decision: 4 Questions Before You Lock In a Fixed Rate

The right answer to "fixed or index" depends on your facility's load profile, your contract timing, and the spread between today's fixed quotes and current wholesale prices. Run through these four questions before you commit.

      1. What is your effective per-kilowatt-hour cost today, and what is the spread to a fixed quote? Pull your last 12 months of bills, calculate your effective per-kilowatt-hour rate including demand and Transmission and Distribution Utility (TDU) delivery, then ask your REP or broker for current 12-month and 24-month fixed quotes. The spread is your insurance cost for locking in.

  2. **What does your summer afternoon demand profile look like?** If your facility runs heavy load between 3 p.m. and 7 p.m. during June through September, your 4CP demand charges are likely the largest single cost driver in your bill. A fixed-rate contract that includes 4CP hedging may be worth a premium. A fixed-rate contract that does not include 4CP hedging is incomplete protection.

  3. **Do you have demand response or curtailment capability?** If you can shift or curtail load during ERCOT emergency events, an index contract with curtailment rights can produce lower total cost than a fixed rate. If you cannot curtail without operational impact, the fixed-rate premium is buying you certainty you actually need.

  4. **When does your current contract expire?** If your contract renews in the next 90 days, lock in now. Waiting until summer to shop means buying during peak demand season, when fixed rates are highest. If your contract renews in late fall or winter, you have room to monitor the market through summer before deciding.

What You Should Do

      1. Pull 12 months of bills and calculate your effective rate, peak demand, and 4CP exposure for the prior summer.

  2. **Request fixed-rate quotes** from at least three REPs for 12-month and 24-month terms.

  3. **Compare the fixed-to-index spread** against historical summer wholesale price volatility, not just the headline rate.

  4. **Model your 4CP cost separately.** Demand charges are billed separately from energy in most contracts.

  5. **Ask about block-and-index pricing** if you want partial certainty without committing to a full fixed rate.

  6. **Verify TDU delivery charges** for Oncor, CenterPoint, AEP North, AEP Central, or TNMP. These pass through and do not vary by REP.

  7. **Confirm contract end date and auto-renewal terms** before signing. Holdover rates are usually well above market.

  8. **If your contract expires before September,** close the renewal now rather than waiting through peak season.

Questions to Ask Your REP or Broker

      - What is the current fixed-rate premium over today's index price, and how does that compare to historical summer peak wholesale price risk in ERCOT?

  - With national commercial rates up 9% per the EIA, how are Texas wholesale prices expected to track through summer 2026, and what is your pricing desk's view?

  - If I stay on index pricing, what load curtailment or demand response programs do you offer for ERCOT emergency events?

  - How will my 4CP demand charges be calculated this summer, and does a fixed rate protect me from those charges, or are they billed separately?

  - Is block-and-index pricing available for my account size, and what percentage of my load should be fixed versus floating?

  - How does my TDU delivery charge exposure differ between fixed and index plans, and what pass-through caps exist in the contract?

Frequently Asked Questions

Why are U.S. commercial electricity prices rising 9% while Texas rates moved differently?

ERCOT deregulation creates real retail price competition that regulated markets lack. In regulated states, utilities pass rising fuel and infrastructure costs directly through to commercial customers via rate filings. In Texas, retail competition forces REPs to absorb margin compression or lose customers, which is why 358 plans exited the market in mid-April 2026. Surviving REPs are competing harder on price, which is why average Texas commercial rates moved 2.1% lower in the same week the national EIA data showed a 9% year-over-year increase.

What is 4CP pricing and why does it matter for Texas commercial electricity contracts?

The four coincident peak (4CP) is the four highest hours of ERCOT system demand each summer (June through September). Your facility's demand during those four hours sets your transmission cost allocation for the following 12 months. Some fixed-rate commercial contracts include 4CP hedging in the energy rate. Others bill 4CP demand charges separately as a pass-through. Asking how 4CP is treated in any quoted contract is one of the most important questions a Texas commercial buyer can ask before signing.

Should I switch from index to fixed pricing now given the national rate environment?

The right answer depends on your facility's summer load profile, your demand response capability, and the current fixed-to-index spread. If your contract renews before summer and you have high afternoon demand, a fixed rate locks in today's competitive Texas pricing before peak season arrives. If your load is flexible and you can curtail during ERCOT emergencies, index pricing with demand response can produce lower total cost. Block-and-index pricing splits the difference for buyers who want partial certainty without full commitment.

How can I see what other Texas commercial REPs are charging?

Texas does not publish a centralized commercial rate database the way Power to Choose works for residential customers. Use a published rate comparison resource for small to mid-size commercial accounts (under 50 kilowatts demand), and request Electricity Facts Labels (EFLs) from at least three REPs for any account size. Compare total cost (energy plus base charges plus demand) within your TDU territory rather than headline energy rate alone. The Texas Commercial Plans rate comparison tool is a useful starting point for benchmarking before you negotiate.

Originally published at texascommercialplans.com

5 Takeaways From EMC25 Houston for Texas Commercial Energy Buyers (2026)

Matt Kundo — Mon, 27 Apr 2026 00:06:18 +0000

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      ERCOT & Grid Operations
      Published April 26, 2026
      6 min read

    5 Takeaways From EMC25 Houston Every Texas Commercial Energy Buyer Should Know

Five takeaways on the Texas commercial electricity market 2026, drawn from public panels and keynotes at EMC25 Houston, and what they mean for buyers, contracts, and renewals.

    **Quick read:** The Texas commercial electricity market 2026 is in the middle of one of its biggest shifts in a decade. Data centers, AI loads, and a new wave of regulation are redrawing the map. Here are five things from EMC25 Houston that every Texas commercial buyer should have on their radar.

The 25th Annual Energy Marketing Conference (EMC25) wrapped up in Houston on April 21, 2026. Two days of panels and keynotes from brokers, REPs, and platform vendors, all centered on a single theme: the Texas market is changing fast, and the rules are still being written.

If you run a business in Texas and pay an electricity bill every month, you don't need to read every panel deck. But there are a handful of shifts coming out of EMC25 that will absolutely show up in your invoices, your contracts, and your renewal conversations over the next 12 to 24 months. The way Texas deregulated electricity works for businesses is the same baseline, but the line items on top of that baseline are about to evolve.

Here are the five takeaways that matter most.

1. SB6 is the biggest market design change in years, and commercial buyers will feel it

Texas Senate Bill 6 (SB6) was the dominant topic at EMC25. The short version: ERCOT is dealing with an unprecedented surge of large load requests, mostly from data centers and AI infrastructure, and SB6 is the framework being built to manage it.

The panel on SB6 and ERCOT interconnection reforms made a few things very clear:

      - The [interconnection queue](https://www.ercot.com/services/rq/integration/transmission) is overloaded. What used to be a six-week study can now stretch 18 months or more. ERCOT is moving to a "batch zero" process to triage the queue, with biannual batch studies after that.

      - Large loads will face new fees and stricter timelines. Proposed entry and study fees, partial capacity allocations, and tighter project schedules are all on the table.

      - The [4CP cost allocation rule](https://www.ercot.com/mktinfo/data_agg/4cp) is under review. With solar adding gigawatts of capacity, system reliability is shifting away from the classic 3 PM summer peak toward evening net-load hours. A monthly CP construct (similar to California) is being seriously discussed.

"Uncertainty is always negative. It always creates risk and always makes prices go up. I don't want to risk my business and I don't know what's going to happen. In the long term, what we've seen through all the other regulatory moves is that everyone else would like to do the same thing as Virginia. It is likely that others will follow suit."
Sherry Fuller, Vice President of Customer Management, BP Energy Retail Company, ERCOT SB6 / Interconnection Reforms panel

What it means for commercial buyers: SB6 isn't just a data center story. The way capacity costs are allocated, the way reliability is priced, and the way demand response is structured will all evolve. Expect new line items on commercial invoices, and expect contract language to start handling regulatory change more explicitly.

2. Your bill is mostly non-energy charges, and that's only going to grow

One of the most useful clarifications from EMC25 was around why power prices keep rising even when natural gas is cheap.

The answer: the energy component (the actual fuel cost) is only one piece of a commercial electricity rate. The non-energy components, capacity obligations, ancillary services, transmission and distribution charges, and renewable portfolio standard adders, often drive more of the total cost than the commodity itself.

With SB6 introducing new ancillary products (think multi-hour ECRS-style services with battery eligibility), and with 4CP under review, those non-energy buckets are about to get more complicated, not less.

"The grid is changing with the growth in solar. It's the net load hours at sunset that really matter, not 3:00 p.m. You have enough solar on the system, but for reliability, do you have enough in the evening hours? And they're talking about going to a once-a-month, like 12CP or whatever they are now. California went to that."
Keith Poli, Principal in Commodities Management, Constellation Energy, ERCOT SB6 / Interconnection Reforms panel

What it means for commercial buyers: When you compare quotes, ask suppliers and brokers to break out the energy component from the pass-through and capacity-related components. Two contracts at the same headline rate can have very different risk profiles depending on how regulatory pass-throughs are written. The five-component rate framework is the simplest way to keep them honest.

3. Reliability has surpassed affordability as the top C&I concern

This one stood out across multiple panels. For large commercial and industrial customers, the conversation is no longer "how do I get the cheapest rate?" It's "how do I make sure I have power when I need it?"

A few drivers behind that shift:

      - Renewables intermittency means more volatile pricing and more frequent thin-margin reliability events.

      - Data center load growth is competing with traditional commercial and industrial demand for limited grid capacity.

      - Memory of [Winter Storm Uri (February 2021)](https://en.wikipedia.org/wiki/2021_Texas_power_crisis) is still very much shaping risk management at every level.

Panelists from the major suppliers were direct about this. Reliability and uptime now drive procurement decisions for the largest accounts, with affordability as a close second.

As David Bisno, Chief Commercial Officer at Shell Energy Solutions, made the point on the Retail Energy, AI, and Market Dynamics panel: for large C&I customers, reliability has surpassed affordability as the top concern, and unmanaged scale destroys value in a market that still has room for retailers of every size. Frank McGovern of ClearView Energy, on the same panel, framed the new normal this way:

"Hundred-year disruptive events are becoming more frequent, requiring businesses to be nimble, prepared, and diversified."
Frank McGovern, Founder, ClearView Energy, Retail Energy, AI, and Market Dynamics panel

What it means for commercial buyers: If your business can't tolerate an outage, your procurement strategy needs to include more than just price. Ask your supplier about their hedging discipline, their financial strength, and how they communicated with customers during the last few extreme weather events. The post-Uri risk management reforms (lower price caps, eliminated unsecured credit, stress-testing frameworks) are working, but only with suppliers that take them seriously.

4. Demand response and flexible load are the next big commercial product

A recurring theme: ERCOT's preferred answer for managing large new loads is optimization, not blunt curtailment. That opens up real opportunities for commercial customers who can shift load.

A few specifics from the panels:

      - New demand response programs are being designed for loads greater than 75 megawatts, and a residential DR product is also in motion.

      - Only about 3% of the roughly 85 GW of dispatchable capacity in ERCOT actively curtails for 4CP today. Panelists agreed there's room for that to grow significantly.

      - Texas has a [$10 billion Texas Energy Fund](https://comptroller.texas.gov/programs/energy-fund/) earmarked for new generation, and recent capacity additions have been dominated by batteries and solar.

"It's probably fair to say it's early days. One thing it's missing is, it talks about it as if it's controlled rather than optimized. So if you're looking at such large loads, why would you not optimize them rather than just curtail?"
Jay Zivicker, Head of Business Development, Kenergy, ERCOT SB6 / Interconnection Reforms panel

What it means for commercial buyers: If your operation has any flexibility in when you run, talk to your REP or broker about DR participation. Programs are evolving fast, and the economics are starting to favor customers who can be a partner to the grid rather than just a consumer of it. At the same time, ask hard questions about curtailment hours, opt-out rules, and operational impact before you sign anything.

5. The retail energy market is consolidating, but smaller and mid-sized REPs are getting more nimble

One of the most interesting panels of the conference was the broker-supplier dynamic and the role of technology in retail energy. A few patterns came through clearly:

      - Consolidation is accelerating on both the supplier and the broker side.

      - Smaller and mid-sized REPs are leaning into technology (mobile apps, modern CRMs, AI-driven operations) to outmaneuver larger, slower competitors.

      - Customer experience expectations are no longer set by other utilities. They're set by Amazon, by mobile banking, by every other digital service your team uses.

On the Retail Energy, AI, and Market Dynamics panel, Brian Hines (formerly of Vistra Energy) put hard numbers on the digital shift, citing app-based service usage at Vistra jumping from 17% to 85%, a clean illustration of how customer expectations have moved from "utility-grade" to "Amazon-grade" in a few short years. Darryl, a smaller retailer on the same panel, framed the consolidation flip side directly: that consolidation actually creates room for nimble, smaller companies to "run circles around" the larger, bureaucratic incumbents.

Neville Raghee, founder of Budget Power, drove the customer side of this point home in his EMC25 keynote with 23 years of retail energy lessons. The verbatim that stuck with me:

"The customer wants four very simple things. One: give me a fair rate. Two, don't shock me when I get my monthly bill. Three, don't screw me at renewal. And four, I'm not going to call you frequently, but when I do, pick up the damn phone."
Neville Raghee, Founder, Budget Power, EMC25 keynote

What it means for commercial buyers: Don't assume bigger is better. Some of the most customer-friendly retailers in Texas right now are mid-sized companies that have invested in technology and stayed disciplined on hedging. Ask about their renewal policy specifically. A supplier that charges existing customers more than new customers from the same channel is telling you exactly how they value your loyalty.

The bigger picture for the Texas commercial electricity market 2026

If I had to sum up EMC25 in one line, it would be this: Texas is figuring out how to absorb the largest demand shock the grid has ever seen, and the rules are being written in real time.

For commercial buyers, that's both a risk and an opportunity. The risk is that contracts signed today on yesterday's assumptions will look very different in two years once SB6 fully rolls out, batch zero settles, and 4CP is restructured. The opportunity is that customers who pay attention, ask the right questions, and partner with suppliers and advisors who actually understand the mechanics will be in a much stronger position than the ones who just shop on headline rate.

If you'd like to talk through what any of this means for your specific facility, contract, or renewal coming up, reach out through the contact form and we'll set up a conversation. You can also pull the current commercial plan data to benchmark any incoming offers against live market quotes.

Texas Commercial Plans helps Texas businesses understand and procure their commercial electricity. This recap is based on public panels and keynote sessions at EMC25 Houston, April 20-21, 2026.

Hero photo by Rebeca Alvidrez on Unsplash.

Originally published at texascommercialplans.com

Commercial Electricity Rates in Texas: A Complete Guide

Matt Kundo — Mon, 27 Apr 2026 00:05:38 +0000

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      Rate Comparison
      Updated April 26, 2026
      9 min read

    Commercial Electricity Rates in Texas: A Complete Guide

Texas commercial electricity averaged 8.90¢/kWh in February 2026, 38% below the U.S. commercial average. Here is how rates are built, how delivery costs vary by territory, and what to ask before signing.

Commercial electricity rates in Texas averaged 8.90¢/kWh in February 2026, roughly 38% below the U.S. commercial average of 14.37¢/kWh, according to the U.S. Energy Information Administration. Rates vary by Transmission and Distribution Utility (TDU) territory, contract type, and demand profile. Most commercial bills break down into five components: energy supply, TDU delivery, ancillary services, demand charges, and regulatory fees.

The SERP for "commercial energy rates" is dominated by aggregators that quote a single ¢/kWh number without explaining how the rate is built. This guide breaks down the structure, walks through how Texas commercial electricity works, and lays out what to ask a Retail Electric Provider (REP) before signing.

What Are Commercial Electricity Rates in Texas?

A commercial electricity rate in Texas is the all-in cents-per-kilowatt-hour price a business pays its REP plus pass-through delivery charges from its TDU. Most rate structures separate energy supply from delivery, so the headline ¢/kWh quoted by a REP is rarely the full bill.

The Texas market is deregulated. About 85% of state load is served by 100+ certified Retail Electric Providers competing for customers, with the Public Utility Commission of Texas (PUCT) overseeing the rules. Retail competition launched in January 2002 under Texas Senate Bill 7, and the deregulated zone covers most of the state outside municipal utilities such as Austin Energy and CPS Energy in San Antonio.

Commercial customers pay differently than residential customers. Mid-market and large commercial accounts receive a custom term sheet, not the standardized Electricity Facts Label used for residential. And commercial rates run materially below residential: the EIA reports a Texas residential average of 15.41¢/kWh in February 2026, meaning Texas businesses pay roughly 42% less per kWh than households in the same state.

How Texas Commercial Rates Are Built (Five Components)

Every commercial electricity bill in Texas decomposes into five components: energy supply (the REP's market-driven ¢/kWh), TDU delivery (regulated pass-through), ERCOT ancillary services, demand charges (for demand-metered accounts), and regulatory fees. Use the Five Components framework as the analyst lens for every rate quote. Buyers who understand all five can compare apples to apples and identify which costs are negotiable.

Energy Supply (REP)

Market-driven and quoted in ¢/kWh. This is the line a REP or broker is competing on. Recent commercial supply rates run roughly 5.50¢ to 9.50¢/kWh depending on contract length and load profile. It is the most negotiable component on a contract.

TDU Delivery

The regulated pass-through cost of moving electricity over the wires. Set by PUCT tariff for your specific territory and rate class. Typical commercial delivery runs 1.5 to 3.5¢/kWh. It is non-negotiable, identical regardless of which REP you pick, but verify your REP is quoting the current PUCT-approved tariff.

Ancillary Services

ERCOT-set costs for frequency regulation, operating reserves, and regulation up/down. Most commercial customers see ancillary charges in the 0.5 to 1.5¢/kWh range, sometimes bundled into the supply rate, sometimes itemized.

Demand Charges and 4CP

Demand charges apply only to demand-metered accounts, typically those with peak loads above 50 kW. They are billed in dollars per kW per month based on the customer's peak 15-minute demand. A representative average is around $40 per kW per month, and demand charges can represent 30% to 70% of a commercial bill.

Texas adds a layer most other states do not: ERCOT's 4 Coincident Peak (4CP) program. Each year, ERCOT identifies the single highest grid-wide 15-minute demand interval in each of June, July, August, and September. Whatever your business consumes during those four windows determines your transmission charges for the entire next year.

Regulatory Fees

Riders for the Retail Reliability Payment Program (RRPP), nuclear decommissioning, and miscellaneous PUCT-mandated charges. Combined, these typically add 0.02 to 0.10¢/kWh. Small but always on the bill.

TDU Territory Cost Variation

Texas's deregulated market is divided among six TDU territories: Oncor (DFW and North Texas), CenterPoint Energy (Greater Houston), AEP Texas North, AEP Texas Central, TNMP, and Sharyland. Commercial delivery charges run from roughly 2.8¢/kWh in Oncor territory up to 5.5¢/kWh in TNMP, set by PUCT tariff and rate class.

        TDURegionApprox. Commercial Delivery (¢/kWh)


        OncorDallas, Fort Worth, North Texas2.8 to 4.8
        CenterPoint EnergyGreater Houston3.2 to 5.0
        AEP Texas NorthAbilene, Wichita Falls area4.2 to 5.0
        AEP Texas CentralCorpus Christi, Rio Grande Valley4.2 to 5.2
        TNMPGulf Coast pockets, West Texas4.5 to 5.5
        SharylandParts of West, South, Central Texasvaries

Same REP, same supply rate, very different all-in costs. Two businesses in different territories can pay 1.5 to 2¢/kWh more on delivery alone for the same usage profile. Verify your specific territory rate against the current PUCT tariff filing rather than the number on a REP's quote sheet.

Commercial Contract Types in Texas

Texas commercial buyers choose between fixed-rate, variable-rate, indexed (block-and-index), and heat-rate contracts. Fixed-rate plans lock in a ¢/kWh for the term and protect against summer spikes. Variable-rate plans float monthly. Indexed plans blend a fixed block with wholesale ERCOT exposure. Each fits a different risk tolerance and load profile.

Fixed-rate contracts give predictable cash flow and hedge against summer wholesale spikes, in exchange for a premium over current spot. They suit small and mid-market businesses that prioritize budget certainty. Variable-rate plans float month to month and rarely make sense for a serious commercial account because they expose the buyer fully to ERCOT summer volatility. Indexed plans are a middle path: a fixed block of usage at a contract rate, with the balance settled against ERCOT wholesale, useful for mid-market loads with a consistent base. Heat-rate contracts price off natural gas curves or wholesale benchmarks and suit sophisticated buyers running internal hedging.

The macro context matters. ERCOT projects peak demand to grow from roughly 87 GW in 2025 to 145 GW by 2031, a 67% increase, with data centers alone adding around 24 GW of new load by 2031. Grid Strategies notes the forecasted growth rate is roughly 8x the 3.7% rate filed with FERC just a few years ago.

According to Doug Lewin, an energy analyst behind the Texas Energy and Power Newsletter:

"Large load is coming. We don't know what that number is going to be. Some of the numbers that are reported are a little crazy, but don't lose the signal from the noise. We're going to have robust load growth, and that means we are going to need a lot of new energy resources."

That outlook is now priced into the curves REPs use to quote multi-year fixed offers.

What Businesses Should Do

To get a competitive commercial rate in Texas, treat procurement as a defined process: know your usage profile, RFP at least 90 days before contract end, request line-item pricing, validate the TDU pass-through, and review the term sheet for early termination, auto-renewal, and POLR exposure.

      1. **Pull 12 months of interval usage data** (kWh and peak kW) from your TDU before requesting quotes. Without it, REPs are guessing at your load profile and pricing in margin to cover the uncertainty.

      2. **RFP 90 to 180 days before contract end.** Earlier gives flexibility on the forward curve. Later forces a rushed decision and often a worse rate.

      3. **Demand line-item pricing.** Energy supply, TDU pass-through, ancillary, demand, and fees broken out separately. Bundled all-in quotes are intentionally hard to compare.

      4. **Verify the TDU rate** against the current [PUCT tariff filing](https://www.puc.texas.gov) for your territory.

      5. **Audit the early termination fee** and the auto-renewal clause. Both can quietly erase the savings negotiated on the supply rate.

      6. **Confirm POLR backstop terms.** If your REP exits mid-contract, the [Provider of Last Resort program](https://www.puc.texas.gov/consumer-help/electricity/polr/Default.aspx) places you on default service at unfavorable variable rates until you re-shop.

      7. **Match contract length to your forward outlook.** Long fixed terms hedge against ERCOT load growth. Shorter terms preserve flexibility if your business is changing.

You can pull current commercial plan data to benchmark incoming offers against live market quotes before signing.

Questions to Ask Your REP or Broker

A short list of questions surfaces hidden contract terms and signals to the supplier that the buyer understands the market.

      - What is the TDU pass-through rate for your specific territory and rate class, and is it the current PUCT-approved tariff?

      - Are demand charges and 4CP exposure quoted separately, and how is your peak demand calculated?

      - What is the early termination fee, and is it a flat dollar amount or a forward-curve liquidation?

      - Is there an auto-renewal clause? At what rate, and how much notice is required to opt out?

      - If the REP exits the Texas market or transfers customers to a Provider of Last Resort, what pricing protections apply during the transition?

      - Can the broker share a sample bill with all five rate components broken out before signing?

If a broker can't answer those clearly, that is a signal in itself. You can also contact the TxCP team for a second pair of eyes on a term sheet before signing.

Frequently Asked Questions

What is the average commercial electricity rate in Texas?

Texas commercial customers paid an average of 8.90¢/kWh in February 2026, according to the U.S. Energy Information Administration. The U.S. commercial average that month was 14.37¢/kWh, which puts Texas roughly 38% below the national average.

Why are commercial electricity rates lower than residential rates in Texas?

Commercial customers consume electricity at a flatter, more predictable load profile than residential customers, which is cheaper for the grid to serve. Commercial accounts also pay lower per-kWh transmission allocations, and competition among 100+ Retail Electric Providers in the deregulated market keeps the supply side aggressive.

How are commercial electricity rates calculated in Texas?

Commercial rates are built from five components: energy supply (set by your REP), TDU delivery (set by PUCT tariff for your territory), ERCOT ancillary services, demand charges (on demand-metered accounts), and regulatory fees. Your all-in ¢/kWh is the sum of those components for your specific usage profile.

What is a TDU charge on a Texas commercial bill?

The TDU (Transmission and Distribution Utility) charge is the regulated pass-through cost of moving electricity over the wires from the generator to your business. Texas has six TDUs: Oncor, CenterPoint, AEP Texas North, AEP Texas Central, TNMP, and Sharyland. Charges typically range from 1.5 to 3.5¢/kWh.

When should a Texas business renew its commercial electricity contract?

Issue an RFP 90 to 180 days before the current contract expires. That window gives REPs and brokers enough time to price competing offers against the forward curve. Renewals locked in inside of 30 days often default to higher rollover rates.

Hero photo by Daniel Halseth on Unsplash. Substation photo by American Public Power Association on Unsplash. Warehouse photo by DWagonerd on Unsplash.

Originally published at texascommercialplans.com

10 Lessons From EMC25 Houston Every Business Owner Needs | MKDM

Matt Kundo — Mon, 27 Apr 2026 00:04:49 +0000

Home / Blog / EMC25 Houston Takeaways Business & Leadership Apr 26, 2026 8 min read 10 Lessons From EMC25 Houston Every Business Owner Needs

I went mostly for one of my Texas energy clients. What stuck with me on the drive back to Austin had less to do with megawatts and more to do with how to run a small business in 2026.

Matt Kundo Marketing Consultant mkdm agent

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I just got back from two days in Houston at EMC25, the 25th Annual Energy Marketing Conference. About 400 people, 60-plus speakers across panels and keynotes, a fastball pitch competition, and the kind of hallway conversations that actually make these things worthwhile.

I went mostly for one of my Texas energy clients. But what stuck with me on the drive back to Austin had less to do with megawatts and more to do with how to run a small business in 2026. Hiring, customer experience, AI, retention, risk, leadership. The themes ran across every panel, regardless of which corner of the energy market the speaker came from.

Quick note on process before I get into it. I took a huge volume of notes across two days. To turn that pile into something readable, I used an LLM to help organize the notes and shape the structure of this post. The takeaways, the framing, and the opinions are mine. The AI helped me get out of my own way and stop staring at a blank page.

Here are ten EMC25 Houston takeaways I think any business owner can use.

1. Hire for attitude, not aptitude

The keynote was Neville Raghee, CEO of Sunrise Energy Holdings. 23 years in retail energy. Co-founded and sold three companies before this current one. His framing on hiring was about as direct as it gets:

"Hire for attitude, not for aptitude. Because aptitude can be trained, attitude cannot."

I've run a solo shop for years and brought in contractors as I needed help. Every time I've gotten a hire wrong, the person looked great on paper and had the wrong energy. Every time I've gotten it right, the person was genuinely curious and asked questions I had not thought of yet.

For any small business owner reading this, that's the takeaway. Skill set is the floor. Attitude is the ceiling.

2. Build for adaptability, not prediction

Neville's other big point was that he stopped trying to predict the market about ten years ago and started building an organization that could adapt to it.

"Instead of trying to predict the future, we will just build an organization that is adaptable and can change as the market and the industry changes."

This hit home. I've watched marketing platforms come and go. I've watched Google overhaul SEO three times. I've watched AI search (AI Overviews, ChatGPT search, Perplexity) basically rewrite the rules of organic visibility in 18 months. If you want a deeper dive on that specific shift, I wrote a full playbook on how to rank in AI Overviews.

The clients I see winning aren't the ones with the perfect five-year plan. They're the ones who can shift in 30 days when something actually changes.

3. The customer wants four very simple things

This was my favorite part of the keynote. Neville on what customers actually want, in his own words:

"One: give me a fair rate. Two: don't shock me when I get my monthly bill. Three: don't screw me at renewal. And four: I'm not going to call you frequently, but when I do pick up the damn phone."

Translate that to any business. A fair price. No surprises. Fair treatment when I renew or come back. A real human when I have a problem. That's it. That's the whole game.

A lot of businesses overcomplicate the customer experience. Loyalty programs, gamification, complex tiers, push notifications. Most customers would trade all of it for those four things done well.

4. Don't charge loyal customers more than new ones

Same keynote, but this one deserves its own section because it's so common everywhere I look:

"Every customer gets a renewal rate that is equal or lower to a new customer coming in from the same channel."

Neville said his retention is the highest in the industry and his churn is the lowest. The "loyalty premium" most companies charge existing customers (cable, insurance, software, you name it) is leaving money on the table in the form of churn and brand damage.

If you've never run the math on what a 5-point churn improvement does to LTV, this is your sign.

5. Hedge discipline is not optional

This came up across multiple panels. Sanjeev from ERCOT put it most succinctly during the markets panel:

"Hedge, hedge, hedge."

Translated out of energy speak, don't bet the farm on any single channel, supplier, or assumption. In marketing, that means don't run all your leads through Meta or all your traffic through Google. In ops, it means don't have one person who's the only one who knows how something works. In finance, it means don't lean on a single client for half your revenue.

The point isn't to be conservative. The point is to make sure one bad month or one platform change doesn't end the company.

6. Mobile apps are eating call centers

Brian Hines, formerly of Vistra Energy, shared a stat that stopped the room. Mobile app usage at Vistra went from about 17% to about 85% over the last few years. Customers don't want to call anymore. They want to open an app and self-serve.

The bigger point a few panelists made: your customers don't compare you to your competitors anymore. They compare you to Amazon. If your checkout, your support portal, or your enrollment flow feels worse than ordering a phone case at midnight, you have a churn problem you have not noticed yet.

7. AI's biggest wins are operational, not flashy

There was an entire panel on AI and retail energy. The smartest takes weren't about customer-facing chatbots. They were about embedded AI. Tools running inside the stack, making decisions on real data, retiring the spreadsheets nobody wants to maintain anymore. If you want a broader view on where AI is moving the needle for marketers and operators, I covered that in my piece on AI applications in digital marketing.

Mike Perella, CEO of Enegy, opened his fastball pitch with a slide called "the death of spreadsheets" and a line that got the room laughing because it was so true:

"You've got eight million formulas and they're always wrong."

Every business I work with has a version of this. A spreadsheet someone built three years ago that nobody fully understands but everyone depends on. The first wave of practical AI value at most small businesses isn't going to be a customer chatbot. It's going to be killing the broken spreadsheet.

8. Radical simplicity beats clever pricing

Andrew Meyer, founder of Arbor, made the case that the path forward in retail energy is radical transparency on rates. No teaser pricing. No hidden adders. No fine print on renewal.

The same principle applies anywhere a customer feels confused or burned. Confusion is friction, and friction kills conversion. Every time I've audited a landing page, an enrollment flow, or a pricing table for a client, the highest-leverage move is almost always "simplify this until a tired customer can understand it on their phone in ten seconds."

If you can't explain your offer in one sentence and your pricing in one screen, you have a problem that no amount of paid media will fix.

9. Data has to be trustworthy before it's useful

A data governance expert on one of the AI panels reframed the whole role of data teams in a way I keep thinking about:

"Data governance should evolve from a 'Department of No' to a 'Department of So.'"

The job of data isn't to gatekeep. It's to enable. Every business I work with is sitting on a pile of data they don't fully trust, which means they don't fully act on it. The fix is rarely more dashboards. It's getting to one source of truth that the team actually believes.

For my own clients, this is exactly why I push so hard on clean GA4, clean conversion tracking, and a single reporting view. If the team doesn't trust the numbers, no amount of "data-driven decisions" is actually going to happen.

10. The black swans are not so rare anymore

Frank McGovern, founder of ClearView Energy, made a comment in passing that stuck with me. He said the "hundred-year" disruptive events keep showing up every few years now.

Texas alone has had Winter Storm Uri, COVID, the AI demand surge, and a wave of regulatory changes in the span of five years. None of those were on anyone's 2019 plan.

The lesson isn't to predict the next one. The lesson is to keep your business nimble enough to absorb a shock without breaking. Diversified revenue, low fixed costs, real cash reserves, and people who can adapt. The same lessons that show up in literally every great business book of the last 50 years, but applied with a little more urgency.

Bonus: don't burn the boats

I'll close with the line from Neville's keynote that I keep coming back to:

"Never burn the boats, but act like you have. Always have a plan B, but act like you don't."

That's a pretty good north star for running a small business in 2026. Build like you're betting everything on it. Plan like you might need to pivot tomorrow. Don't get so attached to the current version of the business that you miss the chance to evolve into the next one.

So what do I do with all this?

If I had to boil ten lessons down into one, it would be this. Hire well, build for change, treat your existing customers like they matter more than your new ones, and use AI to retire the boring stuff so you can focus on the work that actually moves the business.

Not every conference produces a list this long. EMC25 did, and I think most of it travels just fine outside the energy industry.

If any of these takeaways hit a nerve and you want to talk through what they look like for your business, reach out through the contact form and I'll set up a call.

This recap is based on public panels and keynote sessions at EMC25 Houston, April 20-21, 2026. Quotes are from public sessions only. I used an LLM to help organize my conference notes and structure this post. Opinions and takeaways are my own. Hero photo by Jeswin Thomas on Unsplash. Conference photo by Carlos Gil on Unsplash. Trusted by marketing teams at

Originally published at mattkundodigitalmarketing.com

Solar Buyback Plans in Texas: A Complete Guide for Solar Homeowners

Matt Kundo — Sat, 25 Apr 2026 05:07:23 +0000

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Solar Buyback Plans in Texas

Solar buyback plans let Texas homeowners sell surplus solar energy back to their REP for bill credits. With no statewide net metering mandate, buyback rates in 2026 range from 3¢/kWh (fixed) to $5/kWh (real-time wholesale spikes). Ambit Energy offers one of the highest fixed rates — up to 12.5¢/kWh in true 1:1 buyback. This guide compares 12 providers, breaks down 2026 economics after the federal tax credit expired, and shows you how to choose the right plan.

If you’ve invested in solar panels — or you’re considering it — a solar buyback plan determines how much value you get from every kilowatt-hour your system sends back to the grid. In Texas’s deregulated electricity market, there’s no statewide net metering mandate. Instead, individual Retail Electric Providers (REPs) offer solar buyback plans texas homeowners can shop for competitively. Buyback rates in 2026 range from as low as 3 cents per kWh on fixed-credit plans to brief spikes exceeding $5/kWh on real-time wholesale plans. Ambit Energy offers one of the highest fixed rates — up to 12.5 cents per kWh in true 1:1 buyback. This guide covers how texas solar buyback plans work, what they pay, and how to choose one that actually maximizes your solar investment.

What Are Solar Buyback Plans and How Do They Work?

Approximately 85% of Texas homes sit in the deregulated ERCOT market, which means you can choose your REP, according to Solar Reviews. Out of over 100 REPs in Texas, only a handful offer solar buyback plans — programs that give you bill credits for surplus energy your panels export to the grid.

Three main types of solar buyback plans exist in Texas:

Uncapped credit plans — No limit on credit accumulation. Credits roll over indefinitely. These generally save the most money.
Capped credit plans — Credits accumulate to a maximum (for example, Green Mountain caps at $1,000), then any excess generation earns nothing.
Real-time wholesale (RTW) plans — Credits fluctuate with ERCOT market prices every 15 minutes. Potentially lucrative in summer but unpredictable in winter.

A critical detail many homeowners miss: solar credits only offset the energy supply portion of your bill. TDU delivery charges — Oncor at 5.58¢/kWh, CenterPoint at 6.00¢/kWh — still apply on every kilowatt-hour you consume from the grid, regardless of how much you export, according to Quick Electricity.

Chart comparing different types of solar buyback programs including net metering and bill credits.

Solar Buyback Rates and Providers in 2026

The texas solar buyback landscape has shifted significantly. Most REPs have moved away from true 1:1 net metering toward lower fixed rates or volatile real-time wholesale pricing. Here’s how the major providers compare:

Provider
Buyback Rate
Credit Type
Rollover

Ambit Energy
Up to 12.5¢/kWh (1:1)
Fixed
Indefinite

Chariot Energy
Up to 25¢/kWh (capped RTW)
Real-Time
Indefinite

TXU Energy
3.5–6¢/kWh
Fixed
While on plan

Green Mountain
Varies
Fixed
Cap at $1,000

Gexa Energy
3¢/kWh
Fixed
No cash out

Octopus Energy
Wholesale RTW (15-min)
Real-Time
Unlimited

Champion Energy
Wholesale RTW
Real-Time
Indefinite

David Energy
90% RTW
Real-Time
Cash-out eligible

Tesla Electric
RTW (algorithmic)
Real-Time
Cash-out eligible

Rhythm Energy
Time-of-use
TOU
Varies

Top Octopus Energy solar customers earned an average of $635 per month in August during peak demand, with the top customer bringing in over $900 in credits, according to Quick Electricity. However, RTW credits can drop below 2¢/kWh during mild weather months.

For solar homeowners who prefer predictability, Ambit Energy’s 1:1 buyback ratio provides consistent value regardless of season. To see current options, compare Ambit Energy rates and plans or view the full solar buyback rates breakdown.

The Real Economics of Solar Buyback in 2026

Here’s what the numbers actually look like for a typical Texas solar homeowner:

System costs: The average 14 kW solar system in Texas costs approximately $30,887 before incentives, according to EnergySage. That’s higher than previous years because the federal 30% Residential Clean Energy Credit expired December 31, 2025. Without the credit, payback periods extend by 3–5 years to approximately 8.73 years — but 25-year savings still reach $80,305, according to EnergySage.

Surplus generation: A typical Texas home with solar exports 20–40% of its generation to the grid as surplus, according to Texas Power Guide. For a system generating 1,200 kWh/month, that’s 240–480 kWh in monthly exports.

Realistic annual credit ranges:

Fixed credit at 3¢/kWh: $86–$173/year
Fixed credit at 12.5¢/kWh (Ambit 1:1): $360–$720/year
RTW plans: $180–$900+/year (highly seasonal, summer-weighted)

Remaining incentives for 2026:

Texas property tax exemption — 100% exemption on solar system appraised value, saving approximately $300–$450/year over the system lifetime, according to Solar Reviews
Oncor residential solar rebate — Up to $9,000 per home (requires solar + battery pairing), according to Quick Electricity. Program closes November 2026 or when budget is depleted.
Third-party ownership (TPO) — Solar leases and PPAs still qualify for the federal credit through 2027

For more on maximizing your solar energy credits in Texas, see our dedicated guide.

How to Choose the Right Solar Buyback Plan

Not all solar buyback plans are created equal. When shopping for a texas solar buyback plan, evaluate these factors:

Buyback rate vs. retail rate — A high buyback rate means less if the retail rate (what you pay for grid consumption) is also inflated. Compare both numbers.
Credit rollover policy — Do credits roll over month-to-month indefinitely, or do they expire annually? Chariot, Champion, and Octopus offer indefinite rollover.
Monthly fees — Some plans charge $9.95–$19.95 monthly fees that eat into credit value.
Contract length — Longer contracts (24–36 months) may lock you into unfavorable rates as the market shifts.
TDU service area — Your delivery charges differ by TDU. Oncor territory (5.58¢) is cheaper than CenterPoint (6.00¢).
Battery eligibility — Some plans (Tesla Electric, David Energy) specifically reward battery owners who can export stored energy during peak hours.
Cash-out option — Most plans are credit-only. David Energy and Tesla Electric may offer actual cash payouts.

Red flags to watch for: Use-it-or-lose-it credit expiration, low buyback rates paired with high monthly fees, rate riders buried in the EFL (Electricity Facts Label) that increase your cost during peak months, and “promotional” buyback rates that drop after 6 months.

Always read the EFL before signing. Look specifically for: the buyback credit rate, credit expiration terms, monthly service fees, and whether the plan charges different rates for imported vs. exported kWh. Texas net metering rules require these details in the EFL.

Graph showing Texas solar economics in 2026 including buyback rates and system costs.

The Battery Bridge: When Buyback Isn’t Enough

If 20–40% of your solar generation goes to the grid at 3–6 cents/kWh, you’re selling low and buying high. That gap is why 85–90% of new solar installations in Texas now include battery storage, according to Energyscape Renewables.

A home battery stores surplus solar energy instead of exporting it at low buyback rates — then discharges during expensive peak hours when grid rates are highest. This “battery bridge” approach can capture significantly more value than buyback credits alone, especially for homeowners on plans with low fixed export rates.

Battery arbitrage also pairs well with RTW plans: charge the battery during off-peak (or with solar), then export during $2–$5/kWh spikes. Tesla Electric and David Energy are building their entire business model around this concept.

For a detailed breakdown of battery economics, see our cost of battery storage per kWh guide, or explore the available battery backup rebates in Texas.

Step-by-step guide to choosing the right solar buyback plan in Texas.

Getting Started with Solar Buyback in Texas

Ambit Energy’s solar buyback plans offer a true 1:1 ratio at up to 12.5 cents per kWh — meaning every kWh you export earns the same credit as what you pay for grid consumption. Credits roll over indefinitely with no cap.

Ambit’s TLC Pledge (“Try it. Like it. or Change it!”) gives solar homeowners 60 days to test any plan. If it doesn’t fit your generation pattern, switch to a different Ambit plan at no cost — no early termination fee during the trial period.

Before choosing any plan, check your actual usage at Smart Meter Texas to understand your export potential. Then browse solar electricity plans to find the right fit for your home.

Ready to Maximize Your Solar Investment?

Compare Ambit Energy’s 1:1 solar buyback plans and start earning full value for your surplus energy.

Get Your Free Quote

Enroll Online

Frequently Asked Questions

What is a solar buyback plan in Texas?

A solar buyback plan is an electricity plan from a Texas Retail Electric Provider (REP) that gives you bill credits for surplus energy your solar panels export to the grid. Texas has no statewide net metering law, so each REP sets its own buyback rates and terms. Credits typically offset only the energy supply portion of your bill — TDU delivery charges (5–6 cents/kWh) still apply.

How much can I earn from solar buyback credits?

Annual buyback credits for a typical Texas solar home range from approximately $86 to $900+ per year, depending on system size, export volume, and plan type. Fixed-credit plans at 3 cents/kWh earn less but predictably. Real-time wholesale plans can earn significantly more during summer peak demand but vary widely by season.

Do I need a battery for a solar buyback plan?

No — you can use a solar buyback plan without a battery. However, adding battery storage lets you capture more value from your solar investment by storing surplus energy for personal use during peak rates rather than exporting at lower buyback rates. In 2025–2026, approximately 85–90% of new solar installations in Texas include battery storage.

Sources: Solar Reviews, Quick Electricity, EnergySage, Texas Power Guide, Energyscape Renewables. Data reflects 2026 market conditions. Rates and incentives are subject to change. VIP Energy Service is an independent Ambit Energy consultant. This article is for educational purposes and does not constitute financial advice.

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Originally published at vipenergyservice.com

Texas Deregulated Electricity Market Explained for Businesses

Matt Kundo — Sat, 25 Apr 2026 05:06:42 +0000

← Back to Blog

      ERCOT & Grid Operations
      Updated April 25, 2026
      8 min read

    Texas Deregulated Electricity Market Explained for Businesses

Texas runs the largest competitive electricity market in the United States. Here is how commercial rates, contracts, and TDU territories actually work for businesses.

Texas runs the largest competitive electricity market in the United States, and most of its commercial customers can choose who supplies their power. That choice rarely shows up cleanly in the search results. Type "texas electricity rates" into Google and the top pages return residential aggregator listings written for homeowners on 1,000 kWh-per-month profiles. Commercial buyers face a different rate stack, different contracts, and different risks.

This article covers how the deregulated market works for businesses, what actually drives a commercial rate, the contract types available, and what to ask before signing. For weekly tracking of how those rates move, see current ERCOT market news.

Texas Electricity Deregulation Explained

The framework that lets Texas businesses shop for power is built on a 1999 statute. Senate Bill 7, signed by Governor George W. Bush on June 18, 1999, restructured the state's electric utility industry and authorized retail competition starting January 1, 2002. The full legislative text is on file with the Texas Legislature, and a market overview is maintained at Wikipedia: Deregulation of the Texas electricity market. Pat Wood, director of the PUCT during the SB 7 implementation period, oversaw the 2002 retail launch.

About 85% of Texas load now sits inside the deregulated market. Three distinct roles split the work that a single vertically-integrated utility used to perform:

      - **Generators** sell electricity into the wholesale market run by [ERCOT](https://www.ercot.com), which manages the grid and clears prices on a 15-minute interval.

      - **Transmission and Distribution Utilities (TDUs)** own the poles, wires, and meters. They are still regulated monopolies. Buyers do not choose them; they are assigned by territory.

      - **Retail Electric Providers (REPs)** buy from the wholesale market and resell to end customers. The [Public Utility Commission of Texas (PUCT)](https://www.puc.texas.gov) certifies more than 100 REPs.

Outside the deregulated zone, customers stay with their incumbent utility. That includes municipal utilities (Austin Energy, San Antonio CPS, Garland Power and Light, Bryan Texas Utilities) and most rural electric cooperatives. A handful of cooperatives have opted into competition, but the default for muni and co-op territory is no choice.

How Texas Electricity Rates Work for Businesses

The headline number a REP quotes is rarely the all-in cost. The current Texas commercial average sits around 8.60 to 9.12 cents per kWh per the U.S. Energy Information Administration (April 2026 data), which runs 35% to 37% below the national commercial average of 13.6 to 14.1 cents. That advantage is real, but the path to capturing it depends on understanding what each line item contributes to the total.

The energy supply piece, which is what most quotes show, averages about 6.80 cents per kWh on competitive 12-month commercial contracts. TDU delivery typically adds 1.5 to 3.5 cents per kWh on top, set by territory and rate class. ERCOT-driven ancillary services add another 0.5 to 1.5 cents per kWh.

Demand-metered commercial accounts face a separate cost driver that does not appear on residential bills: capacity and demand charges. The average runs around $40 per kW per month based on the customer's peak demand, and demand can account for 30% to 70% of the total commercial bill. For a 500 kW facility, a single bad summer afternoon can lock in nearly a quarter-million dollars of annual demand charges.

The Five Components of a Texas Commercial Rate

Every commercial bill in the deregulated market breaks into five components. If a quote does not separate all five, the buyer is comparing partial pictures. Use the Five Components framework as the analyst lens for every rate quote a REP or broker hands over.

      1. **Energy Supply.** The REP's component, market-driven, usually quoted in cents per kWh. Term length, load size, and credit profile all move it. Range in early 2026: roughly 5.50 to 9.50 cents.

      2. **TDU Delivery.** Regulated by PUCT and set by the territory's filed tariff. Non-bypassable. Range: 1.5 to 3.5 cents per kWh, with Houston (CenterPoint) typically running about half a cent higher than Dallas-Fort Worth (Oncor).

      3. **Ancillary Services.** Set by ERCOT to keep the grid balanced (frequency regulation, spinning and non-spinning reserves, ECRS contingency reserve). Range: 0.5 to 1.5 cents per kWh, and rising as reserve margins tighten.

      4. **Capacity and Demand Charges.** Apply to demand-metered accounts. The driver is [ERCOT's 4 Coincident Peak (4CP) program](https://www.ercot.com/mktinfo/data_agg/4cp), which identifies the single highest 15-minute grid-wide demand interval in each of June, July, August, and September. A facility's load during those four windows sets its transmission demand charge for the entire next year.

      5. **Regulatory Fees.** PUCT-mandated charges, including the Retail Renewable Portfolio Payment, nuclear decommissioning rider, and similar pass-throughs. Small in dollars (roughly 0.02 to 0.04 cents per kWh) but always present.

A practical takeaway: a quote at 6.50 cents per kWh in Oncor territory becomes about 9.0 to 9.5 cents all-in once delivery, ancillary, demand, and regulatory components are added.

TDU Territories and Contract Types

The TDU determines the delivery side of the equation. There are six commercial territories serving deregulated customers:

        TDURegionApprox. Commercial Delivery (¢/kWh)


        OncorDallas-Fort Worth, North Texas, parts of West Texas2.8 to 4.8
        CenterPoint EnergyGreater Houston metro3.2 to 5.0
        AEP Texas NorthAbilene, Wichita Falls area4.2 to 5.0
        AEP Texas CentralCorpus Christi, Rio Grande Valley4.2 to 5.2
        Texas-New Mexico Power (TNMP)Scattered: Gulf Coast, North-Central, West Texas4.5 to 5.5
        Sharyland UtilitiesParts of West, South, and Central Texasvaries

The supply side has more flexibility. Five contract structures dominate the commercial market:

      - **Fixed-rate contracts** run 12, 24, or 36 months. Predictable, with early-termination fees. Best for steady-load operations.

      - **Variable or month-to-month plans** track wholesale and serve as the default after a fixed plan expires. Useful only as a bridge.

      - **Indexed plans** (heat-rate or block-and-index) pass wholesale through with a markup. Common for larger industrials willing to take basis risk for a chance at lower average cost.

      - **Time-of-use plans** split rates by peak and off-peak periods. Worth modeling for businesses that can shift load to nights or weekends.

      - **Swing tolerance and take-or-pay structures** apply to large customers with custom load profiles, defining usage bands or minimum take volumes.

For a snapshot of current commercial offers across these structures, the current commercial plan data tracks active rates by territory and term. For the mechanics of running an apples-to-apples comparison across REPs, see how electricity rate comparison works in the Texas ERCOT market.

What Businesses Should Do

Procurement is where most of the value is captured or lost. Seven steps cover the practical work:

      1. Pull a recent bill and identify all five rate components: energy, TDU delivery, ancillary, demand, regulatory.

      2. Build an accurate 12-month load profile, including monthly kWh and peak kW, before requesting any quote. REPs and brokers price against the load they see.

      3. Open the procurement window 90 to 180 days before contract expiration. Longer windows give access to forward-curve dips that month-of buyers miss.

      4. Compare quotes apples-to-apples by adding TDU delivery to every energy-only number. Brokers often quote the energy-only figure to look competitive.

      5. For demand-metered accounts, build a 4CP load-management plan covering June through September. Even a 5% cut in a single peak interval shows up on the next year's bill.

      6. Verify the REP's PUCT certification and POLR exposure before signing. The PUCT REP directory lists every active provider.

      7. Read the Term Sheet (mid and large commercial) or the Electricity Facts Label (small commercial). The marketing one-pager is not the contract.

Procurement teams that need a sounding board can contact the TxCP team for an independent read on a specific quote stack.

Questions to Ask Your REP or Broker

A short list before signing:

      - What is the exact pricing formula, and which components pass through (energy, TDU, ancillary, capacity, regulatory)?

  - What are all fees: early termination, late payment, imbalance, swing penalties, and what is the credit or collateral requirement?

  - How does the contract handle usage variance, peak demand changes, or ERCOT scarcity events?

  - What is the renewal mechanism, and is there an evergreen clause that renews automatically?

  - For brokers: how is your compensation structured, and will you share every offer received?

  - What is your performance history, financial stability, and PUCT REP certification number?

Frequently Asked Questions

What is the average commercial electricity rate in Texas?

The all-in commercial average is 8.60 to 9.12 cents per kWh per EIA April 2026 data. That is roughly 35% to 37% below the national commercial average of 13.6 to 14.1 cents. Energy-only quotes from REPs typically sit around 6.80 cents, with TDU delivery, ancillary, and demand charges layered on top.

How is a commercial electricity bill different from a residential bill in Texas?

Commercial bills add demand charges (priced per peak kW, not per kWh), kVAR penalties for poor power factor, and ratchet clauses that can lock minimum demand for up to 11 months after a single peak. Residential bills are mostly a flat kWh energy charge plus TDU pass-through, with no demand or ratchet exposure.

What is ERCOT 4CP and why does it matter?

ERCOT identifies the single highest 15-minute grid-wide demand interval in each of June, July, August, and September. A commercial facility's load during those four intervals sets its transmission demand charge for the entire next year. The 2024 program identified Sunday, June 30, 2024 as a peak, which broke the historical pattern of weekday peaks and made prediction harder.

What happens if a Texas REP goes out of business?

PUCT designates a Provider of Last Resort (POLR) every two years. If a REP exits the market, service continues without interruption, but at POLR rates, which are typically higher than competitive plans. Customers should re-shop the market immediately rather than ride POLR pricing.

Hero photo by Max Fray on Unsplash. Substation photo by American Public Power Association on Unsplash. Warehouse photo by Sierra Bell on Unsplash.

Originally published at texascommercialplans.com

Texas Electricity Rate Comparison for Businesses

Matt Kundo — Sat, 25 Apr 2026 05:06:06 +0000

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      Rate Comparison
      April 24, 2026
      6 min read

    How Electricity Rate Comparison Works in the Texas ERCOT Market

Commercial rate comparison cycles 5 to 12 REP quotes through an RFP. Here is the process, a 5-line normalization worksheet, and how ERCOT zones change the answer.

Electricity rates comparison texas searches return aggregator sites built for residential customers, but commercial electricity rate comparison in Texas runs on a different process entirely. A commercial Request for Proposal (RFP) cycles five to twelve REP quotes through a broker or direct-channel solicitation, and the spread between the best and worst quote on the same load profile typically runs 1.0 to 2.0 cents per kilowatt-hour on supply alone. For a business burning 1 million kWh per year, that spread is $10,000 to $20,000 in annual energy cost. This deep dive sits inside the broader Texas deregulated electricity market playbook for businesses, focused specifically on how rate comparison actually works in the ERCOT market for commercial buyers. ERCOT projects commercial load growth of 1.9% in 2026 and 2.5% in 2027, which adds pressure on every term sheet a buyer evaluates this cycle.

The Commercial Electricity Rate Comparison Process

Commercial rate comparison in Texas runs through one of two channels: a broker-facilitated RFP that solicits multiple PUCT-certified REPs at once, or direct outreach to individual REPs by the buyer. Both paths require the same underlying inputs: at least 12 months of interval usage data, a Letter of Authorization (LOA) granting the broker or REP access to the customer's account, and a clear scope (term length, start date, swing tolerance, contract structure).

The standard process breaks into five steps:

      1. **Pull interval data.** The Transmission and Distribution Utility (TDU) records 15-minute interval usage for every commercial meter. Request a 24-month billing history via LOA from the current REP or directly from the TDU.

      2. **Define the scope.** Term length (typically 12, 24, or 36 months), start date, fixed versus index versus block-and-index, swing tolerance, and 4CP pass-through treatment.

      3. **Solicit quotes.** A broker pings 25+ REPs simultaneously in a reverse auction; typically 5 to 12 return quotes within 3 to 5 business days. Direct buyers contact 3 to 5 REPs individually.

      4. **Receive Term Sheets.** Each REP returns a Term Sheet (the commercial equivalent of a residential Electricity Facts Label) listing supply rate, swing tolerance, MTM rate, pass-throughs, and clauses. Commercial market rules and protocols are published in the [ERCOT Commercial Operations Guide](https://www.ercot.com/mktrules/guides/commercialops).

      5. **Normalize and compare.** Convert each quote to an all-in cents per kWh figure using the same usage assumption. That normalization is the next section.

Apples-to-Apples Normalization: The 5-Step Commercial Rate Comparison Checklist

A "lowest c/kWh" comparison is misleading because REP quotes vary in what they include. The U.S. Energy Information Administration publishes a Texas commercial average in the mid-8-cent range, but that figure is bundled and omits the pass-throughs a commercial Term Sheet often itemizes separately. Use the 5-step commercial rate comparison checklist on every quote:

      1. **Energy Supply** (the headline c/kWh).

      2. **Plus TDU Delivery** (set by territory: Oncor, CenterPoint, AEP North, AEP Central, and TNMP each publish different delivery rates, roughly 4.0 to 5.5 c/kWh depending on rate class).

      3. **Plus Ancillary Services** (often 0.10 to 0.30 c/kWh; sometimes baked into supply, sometimes itemized).

      4. **Plus Capacity Charges** (4CP pass-through if applicable, varies by demand profile).

      5. **Plus Regulatory Fees** (RRPP, decommissioning, gross receipts tax; typically 0.15 to 0.40 c/kWh combined).

Total all-in rate equals the sum of lines 1 through 5. This is the only number that compares quotes apples-to-apples. Two quotes with the same headline supply rate can differ by 1.0 or more c/kWh once TDU, ancillary, and pass-throughs are added. The gap between headline and all-in delivered rate typically runs 2 to 5 c/kWh.

How ERCOT Zones Affect Rate Quotes

ERCOT divides Texas into four congestion zones: North, Houston, South, and West. Wholesale prices clear separately in each zone based on local supply, demand, and transmission constraints. REP supply rates reflect zonal price expectations, so the same business with the same usage profile can receive different supply quotes depending on the zone. According to ERCOT CEO Pablo Vegas, the vast majority of new large-scale power connection requests now come from data centers, which is why forward curves in Oncor and CenterPoint territories have widened relative to the South and West zones.

Houston Zone commercial supply rates often run 0.2 to 0.5 c/kWh above North Zone rates during summer congestion. Data center concentrations in Oncor (North) and CenterPoint (Houston) territories are expected to continue widening zonal spreads through 2026 and 2027 as new gigawatts of load come online. A meaningful texas electricity provider comparison requires asking each REP which ERCOT zone was used to price the quote. A REP with tighter zonal pricing may be passing more market risk back to the buyer through uncapped pass-through clauses.

What Commercial Buyers Should Do During Rate Comparison RFPs

      1. Start the RFP 90 to 180 days before contract end. Pricing windows past 180 days carry forward premiums; under 30 days risks the holdover rate (often 20% to 40% above market).

  2. **Standardize the scope before soliciting.** Same term length, same swing tolerance, same start date for every REP.

  3. **Request Term Sheets, not just rate quotes.** A bare c/kWh number cannot be normalized.

  4. **Use the 5-line worksheet on every quote.** Add energy, TDU, ancillary, capacity, and fees. Compare on all-in cost.

  5. **Confirm the ERCOT zone used to price.** Ask each REP which zone assumption sits in the quote.

  6. **Check the spread.** A quote 1.0 or more c/kWh below the rest of the field is either a great deal or a quote with hidden pass-throughs. Read the Term Sheet line by line for unbounded ancillary, true-up, or bandwidth clauses.

  7. **Verify against current commercial plan data** using the [current commercial plan CSV](https://texascommercialplans.com/download/) for an independent benchmark.

Frequently Asked Questions

What is the difference between residential and commercial rate comparison in Texas?

Residential rate comparison runs through Power to Choose, where rates are bundled and standardized into Electricity Facts Labels. Commercial rate comparison runs through broker RFPs or direct REP outreach, returns custom Term Sheets, requires a 24-month billing history plus 4CP interval data, and prices each quote against the buyer's specific load profile and ERCOT zone.

How many REPs typically respond to a Texas commercial rate RFP?

A broker-facilitated RFP typically returns 5 to 12 quotes from REPs that actively serve commercial accounts of the buyer's size. Spreads between the best and worst quote on the same scope typically run 1.0 to 2.0 cents per kilowatt-hour on supply alone, or roughly $10,000 to $20,000 per year per million kWh of load.

Why do REP quotes vary so much for the same business?

Differences come from how each REP prices ERCOT zonal risk, capacity charge exposure, contract margin, and how aggressively they pass through versus absorb regulatory fees. A REP comfortable with the buyer's load shape will price tighter; one less familiar will add a risk premium. ERCOT forward-curve volatility on the day the quote is issued also moves rates by 0.1 to 0.3 c/kWh.

Can a Texas business run rate comparison without a broker?

Yes. Direct rate comparison works for buyers willing to contact 3 to 5 REPs individually, share interval data via LOA, and review Term Sheets line by line. The trade-off is buyer time: a broker centralizes the RFP and normalizes quotes; direct comparison shifts that work to the buyer. For loads above 1 million kWh per year, the broker fee is often offset by tighter pricing from competitive solicitation. Have questions on a specific RFP? Get in touch.

Photos by Mark Patterson, Morgan Von Gunten, and Luke Chesser on Unsplash.

Originally published at texascommercialplans.com

AI for Email Marketing: Tools and Strategies | MKDM

Matt Kundo — Sat, 25 Apr 2026 05:05:25 +0000

Home / Blog / AI Email Marketing AI Feb 11, 2026 7 min read AI for Email Marketing: Tools and Strategies

Discover how AI for email marketing delivers measurable results while dramatically reducing manual work. Learn which AI features matter most, compare top platforms, and get a practical implementation strategy.

Matt Kundo Marketing Consultant mkdm agent

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Email marketing remains one of the most effective digital channels, but creating campaigns that truly connect with subscribers takes significant time and effort. Here's a striking reality: 87% of marketers using AI leverage it specifically for email marketing. Why? Because AI for email marketing delivers measurable results while dramatically reducing manual work through AI powered email marketing capabilities.

The impact of AI on marketing extends far beyond basic automation. AI for email marketing represents a fundamental shift in how businesses approach customer engagement, moving from guesswork to data-driven precision. This guide covers the essential AI features transforming email marketing efforts, top tools worth considering, and a practical implementation strategy that can save you time while boosting campaign performance.

What Is AI for Email Marketing?
Key AI Features That Improve Email Performance
Top AI Email Marketing Tools for 2026
How to Implement AI in Your Email Marketing
Measuring AI Email Marketing ROI
Moving Forward with AI Email Marketing
FAQs

What Is AI for Email Marketing?

AI for email marketing applies machine learning and natural language processing to email campaigns, enabling capabilities that were impossible with traditional automation. Understanding what AI for email marketing means starts with recognizing that while conventional email tools rely on rules you create manually, AI powered email marketing systems analyze customer data patterns and adapt in real time to deliver better results.

Think of traditional email automation as a sophisticated filing system, it follows instructions you've created precisely. AI powered email marketing works more like having a skilled analyst who notices patterns, tests hypotheses, and continuously optimizes based on what actually works for your specific audience. This is why AI for email marketing has become essential for competitive businesses.

The core AI features that distinguish modern platforms include:

Content generation: Creating subject lines, email body copy, and calls-to-action
Predictive analytics: Forecasting subscriber behavior and engagement likelihood
Smart segmentation: Grouping audiences based on behavioral patterns, not just demographics
Personalization engines: Delivering individualized content at scale

Traditional automation follows static "if-then" rules. AI for email marketing learns from user behavior continuously, identifying patterns humans might miss. This shift from rules-based to predictive marketing means your email campaigns become more effective over time without requiring constant manual adjustment. To understand how machine learning powers modern marketing optimization, see our guide to machine learning and SEO. The AI email marketing tools available today make this accessible to businesses of all sizes.

Key AI Features That Improve Email Performance

Understanding which AI features deliver the most value helps prioritize your AI for email marketing implementation. The following capabilities consistently produce measurable improvements in email marketing campaigns when using AI powered email marketing platforms.

Smart Subject Line Optimization

Subject lines determine whether emails get opened or ignored. AI subject line optimization analyzes vast datasets of email performance to generate catchy subject lines that resonate with specific audiences.

Research shows AI-optimized subject lines achieve 42% higher open rates compared to human-written alternatives. The technology tests multiple variations simultaneously, learning which approaches work best for different subscriber segments. This automated A/B testing eliminates guesswork and accelerates the path to high-converting email copy.

Predictive Send Time Optimization

When you send an email matters almost as much as what it contains. Send time optimization uses machine learning to determine the ideal delivery moment for each individual subscriber based on their past engagement patterns.

Rather than sending to everyone at 9 AM, AI analyzes user behavior patterns to identify when each person is most likely to open and engage. Studies indicate this approach produces a 27.6% increase in click-to-conversion rates. The improvement comes from reaching people when they're actually paying attention to their inbox.

Dynamic Content Personalization

Personalization email strategies have evolved far beyond inserting first names. Modern AI enables dynamic content blocks that change based on each recipient's browsing history, purchase behavior, and engagement patterns.

This real-time personalization can include:

Product recommendations based on browsing or purchase history
Content variations matched to customer lifecycle stage
Offers tailored to individual price sensitivity
Location-specific messaging and promotions

Effective personalization significantly improves customer engagement because subscribers receive relevant content rather than generic messaging. The AI handles complexity that would be impossible to manage manually across thousands of subscribers. For a deeper dive into personalization strategies across all marketing channels, see our comprehensive guide to marketing personalization.

AI-Powered Audience Segmentation

Beyond basic demographic splits, AI email marketing tools create behavioral segments that reveal hidden patterns in your subscriber base. These systems identify clusters of users with similar engagement patterns, predict which subscribers might churn, and find lookalike audiences for your best customers.

This intelligent segmentation enables more targeted email marketing campaigns that speak directly to specific needs and interests. Rather than broad messages hoping to resonate with someone, AI for email marketing lets you deliver focused content designed for defined audience segments. The best AI email marketing tools make this segmentation nearly automatic.

Top AI Email Marketing Tools for 2026

The AI email marketing tools market offers AI capabilities across various price points and feature sets. Choosing the right platform for AI for email marketing depends on your specific business needs, technical resources, and budget constraints. Here are platforms worth evaluating based on business size and typical use cases:

Klaviyo excels for e-commerce businesses, offering predictive analytics that forecast customer lifetime value and purchase probability. The platform's AI analyzes shopping behavior to trigger timely campaigns that drive conversion rates.

ActiveCampaign provides strong automation capabilities with AI-powered lead scoring and content suggestions. Small to mid-sized businesses appreciate the balance between sophistication and usability.

HubSpot includes AI content assistance across its marketing suite, helping teams create engaging email copy faster while maintaining brand voice consistency.

Mailchimp offers accessible AI features including send time optimization and subject line suggestions, making it suitable for businesses just beginning their AI-powered email journey.

Brevo (formerly Sendinblue) provides AI writing assistance and smart campaign features at competitive pricing for budget-conscious teams.

When evaluating AI email marketing tools, consider:

Depth of AI features versus marketing needs
Integration with existing tech stack
Pricing structure and scalability
Learning curve and support resources

The right platform depends on your specific business context, technical capabilities, and growth trajectory. Avoid choosing AI email marketing tools based solely on AI feature lists, implementation complexity matters too. The best AI for email marketing solution balances capability with practical usability. For a detailed comparison of full-featured marketing automation platforms that include advanced email marketing capabilities alongside broader automation features, pricing breakdowns, and implementation guidance across enterprise and SMB solutions.

How to Implement AI in Your Email Marketing

Successful AI for email marketing adoption follows a phased approach. Trying to activate every AI powered email marketing feature simultaneously often leads to confusion and abandoned initiatives. Here's how to implement effectively.

Start with Quick Wins

Begin with AI capabilities that require minimal setup but deliver immediate value. Enable AI subject line suggestions to see how they perform against your current approach. Turn on send time optimization, most platforms make this a simple toggle. Use AI-generated content creation as drafts that your team reviews and refines.

These initial steps let you experience AI benefits while building comfort with the technology. You'll quickly see how emails automate certain decisions that previously required manual judgment.

Build Your Data Foundation

AI systems perform better with quality data. Before implementing advanced features:

Clean your email list to remove invalid addresses and inactive subscribers
Ensure tracking pixels and analytics are properly configured
Review how subscriber data flows between your tools
Segment existing subscribers based on available behavioral data

Taking time to prepare data infrastructure pays dividends when you activate more sophisticated AI capabilities.

Scale Advanced Features

Once comfortable with basic AI features, expand to more powerful capabilities:

Implement behavioral segmentation using AI clustering
Deploy personalized content blocks based on subscriber activity
Set up predictive triggers for lifecycle campaigns
Enable churn prediction to identify at-risk subscribers

Each new feature builds on your previous experience, creating a systematic approach to AI for email marketing that delivers sustainable improvements.

Measuring AI Email Marketing ROI

Quantifying the value of AI for email marketing investments helps justify continued adoption and guides optimization decisions. Track these metrics to measure the impact of your AI email marketing tools:

Open rate improvement: Compare performance before and after enabling AI subject lines and send time optimization. Look for incremental gains in the 20-40% range.

Click-through and conversion rates: High-converting emails result from better targeting and personalization. Measure changes in these downstream metrics alongside opens.

Time savings: Track hours spent on email creation, segmentation, and testing. Many teams report saving 3+ hours per campaign through AI automation.

Revenue per email: The ultimate measure of email effectiveness. AI improvements should translate to higher revenue generation per send.

Industry research suggests AI for email marketing delivers $36 in ROI for every $1 invested, significantly higher than traditional approaches. Your results with AI powered email marketing will vary based on current baseline performance and implementation quality.

Maintain realistic expectations and continuously A/B test AI recommendations against alternatives. Not every AI suggestion will outperform, but the overall trend should show clear improvement in your email marketing efforts.

Moving Forward with AI Email Marketing

AI for email marketing transforms campaign performance through intelligent automation of tasks that traditionally required extensive manual effort. The right AI email marketing tools make these capabilities accessible to any business. From catchy subject lines to predictive send timing and dynamic personalization, these capabilities deliver measurable improvements in engagement and conversion rates.

The practical path forward starts with selecting one or two AI features, implementing carefully, and measuring results before expanding. Quality customer data amplifies AI effectiveness, so invest in data hygiene alongside tool adoption. Most businesses see meaningful improvements within the first month of using AI-powered features, though optimal results come from consistent testing and refinement over time.

Email marketing continues evolving rapidly as AI capabilities expand. Businesses that integrate AI thoughtfully position themselves to deliver more relevant, engaging email experiences while operating more efficiently than competitors still relying on manual approaches alone. For a broader perspective on how AI is transforming digital marketing beyond email, explore our complete guide to AI applications in digital marketing. The investment required is modest compared to the potential gains in customer engagement and campaign performance.

Ready to Transform Your Email Campaigns with AI?

At Matt Kundo Digital Marketing, I help businesses implement AI-powered email strategies that deliver measurable results. Whether you're just getting started with AI email marketing tools or looking to optimize your current approach, I can guide you through the implementation process.

→ Schedule a free consultation to discuss your email marketing goals.

FAQs

What is AI for email marketing?

AI for email marketing applies machine learning and natural language processing to email campaigns, enabling capabilities like predictive send times, smart subject line optimization, dynamic content personalization, and behavioral segmentation that were impossible with traditional automation.

What ROI can I expect from AI email marketing tools?

Industry research suggests AI for email marketing delivers $36 in ROI for every $1 invested. Specific improvements include 42% higher open rates with AI-optimized subject lines and 27.6% increase in click-to-conversion rates with send time optimization.

Which AI email marketing tools are best for 2026?

Top AI email marketing tools include Klaviyo (best for e-commerce with predictive analytics), ActiveCampaign (strong automation with AI lead scoring), HubSpot (AI content assistance across marketing), Mailchimp (accessible AI features for beginners), and Brevo (competitive pricing with AI writing assistance).

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View All Insights [ Recent News & Marketing News & AI & Digital Marketing Strategy 7 min read

PwC AI Study 2026: Close the AI Marketing Performance Gap

Read Article → ](https://mattkundodigitalmarketing.com/blog/pwc-ai-performance-study-2026-marketing-gap/) [ Recent News & Marketing News & AI & Google Ads & Paid Media 7 min read

How to Choose a Digital Marketing Agency | MKDM

Matt Kundo — Sat, 25 Apr 2026 05:04:44 +0000

Home / Blog / Choosing a Marketing Agency Apr 06, 2026 12 min read How to Choose a Digital Marketing Agency

A 7-step framework for choosing the right digital marketing agency. Includes real pricing data, red flags to watch for, and the questions you should ask before signing.

Matt Kundo Marketing Consultant mkdm agent

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Figuring out how to choose a digital marketing agency is one of the most consequential decisions a small business owner will make. You are putting real money on the line, often from a tight budget, and trusting a team of strangers to grow your business. Get it right and you gain a partner who drives revenue. Get it wrong and you burn through cash with nothing to show for it.

I have sat on both sides of this table. As a marketing consultant, I have helped small businesses evaluate agencies. I know what sets the great ones apart from the rest. This guide gives you a step-by-step framework for how to choose a marketing agency that fits your goals, your budget, and how you work. If you have been weighing whether to handle some marketing in-house (a topic I cover in my upcoming guide to DIY SEO for small business), this will help you know what to look for when you bring in outside help.

Why Getting This Decision Right Matters
How to Choose a Digital Marketing Agency in 7 Steps
Red Flags That Should Make You Walk Away
10 Questions to Ask Before Signing
How to Find a Marketing Agency That Fits
What Realistic Results Look Like
FAQs

Why Getting This Decision Right Matters

Small businesses typically spend 7 to 10 percent of their revenue on marketing each year. For a company doing $500,000 in annual revenue, that is $35,000 to $50,000. That is not pocket change. And according to WordStream's analysis of digital marketing trends, 94 percent of small businesses plan to increase their marketing spending in the coming years. With that much on the line, learning how to choose a digital marketing agency is one of the highest-leverage things you can do.

The stakes are real. A bad pick costs more than the retainer fee. It costs you months of lost ground while rivals pull ahead. It wastes the chance to put that budget toward something that works. And it drains your energy when you have to start the search over.

That is why knowing how to choose a marketing agency is a core business skill, not a nice-to-have. The framework below gives you a clear process so you can find a marketing agency with confidence instead of guessing.

How to Choose a Digital Marketing Agency in 7 Steps

There is no shortage of agencies competing for your business. The challenge is not finding options. It is filtering them. Whether you are searching for a digital marketing agency for startups or an established small business, these seven steps will help you move from overwhelmed to informed. This is the same process I recommend to every client who asks me how to choose a digital marketing agency.

Step 1. Define Your Goals Before You Talk to Anyone

Before you visit a single agency website, get clear on what you need. Vague goals like "get more customers" or "improve our online presence" lead to vague proposals and vague results.

Use the SMART framework to define goals that are Specific, Measurable, Achievable, Relevant, and Time-bound. For example:

"Generate 50 qualified leads per month from organic search within 6 months"
"Increase e-commerce revenue by 25 percent in Q3 through paid advertising"
"Rank on the first page of Google for 10 target keywords within 12 months"

Goals like these give you something concrete to evaluate agencies against. If an agency cannot explain how they would help you hit these targets, that tells you something important. Clear goals are the foundation of how to choose a digital marketing agency effectively because they give you an objective standard for comparison.

Step 2. Determine What Services You Actually Need

Digital marketing is broad. An agency might offer SEO, PPC ads, social media, content, email, web design, and more. You likely do not need all of it right now.

The choice between a full-service agency and a niche one matters here. Full-service shops handle it all under one roof, which keeps things simple. Niche agencies go deeper in one area (like SEO or paid search) and often get better results for a specific problem.

My take: if you are early-stage and need to build your entire digital presence, a full-service agency makes sense. If you already know your bottleneck (say, organic traffic is flat or your Google Ads are bleeding money), a specialist will usually give you a better return. Knowing what services you need is a critical part of how to find a marketing agency that actually fits your situation. Many of the best digital marketing companies specialize in specific channels, so matching your needs to their strengths is essential.

Step 3. Set a Realistic Budget

Pricing is one of the most awkward parts of the agency search. No one wants to share numbers first. Here is a reality check based on current agency pricing data:

Monthly retainers (the most common model, used by roughly 78 percent of agencies):

Basic services (SEO, social, or content): $1,000 to $5,000 per month
Multi-channel campaigns: $5,000 to $10,000 per month

Hourly rates: $50 to $400+ per hour, depending on seniority and agency size

Project-based pricing: $2,500 to $10,000 for an SEO audit or strategy; $5,000 to $50,000 for web design or content campaigns

Performance-based models: Cost per lead ($10 to $500), cost per acquisition ($50 to $5,000+), or revenue share (5 to 20 percent)

Per Taskip's analysis of pricing models, hybrid models (a base retainer plus performance bonuses) are growing fast. These work well for small businesses because they tie the agency's pay to your results.

The bottom line: if your total marketing budget is under $2,000 per month, you are likely looking at a freelancer or boutique agency. That is not a bad thing. Some of the best work happens at that level. Understanding pricing is a core step in how to choose a digital marketing agency because it prevents sticker shock later and helps you compare proposals on equal terms.

Step 4. Evaluate Their Track Record

This is where most small business owners fall short when trying to figure out how to choose a marketing agency. They look at an agency's website, read a few testimonials, and call it due diligence. That is not enough.

When evaluating how to choose a digital marketing agency you can trust, dig into the specifics:

Case studies with real numbers: Not "we grew traffic" but "we grew organic traffic by 147 percent in 8 months, adding 62 leads per month." If they do not have case studies with metrics, ask why.
Industry relevance: Have they worked with businesses like yours in size and field? A B2B lead gen campaign and a local restaurant campaign need very different skills.
ROI benchmarks: WebFX's research shows a strong target for overall digital marketing ROI is 5:1 ($5 back for every $1 spent). If an agency cannot point to results in that range, keep looking.
References: Ask to speak with two or three current clients. Any agency worth hiring will say yes right away.

Step 5. Assess Communication and Transparency

The best sign of a good agency is not talent or strategy. It is how they talk to you. A Deloitte survey found that clear, steady communication is the top driver of client satisfaction.

When thinking about how to choose a marketing agency, pay close attention to how each one talks to you during the sales process. Are they quick to respond? Do they use plain language or hide behind jargon? Do they ask smart questions about your business, or jump right into a pitch?

Here is what good agency transparency looks like in practice:

Regular reporting: Monthly at minimum, with dashboards you can access anytime through tools like Google Analytics or Looker Studio
Clear attribution: They can explain which activities are driving which results
Honest conversations: They tell you when something is not working and what they plan to do about it
A dedicated point of contact: You should know who to call, and that person should know your account inside and out

If an agency is hard to reach or vague during the courtship phase, it only gets worse after you sign. Communication style is one of the most overlooked factors in how to choose a digital marketing agency, and it is the one that matters most in the long run.

Step 6. Review the Contract Carefully

Agency contracts vary a lot, and the details matter more than you might think. Before you sign, look for these items:

Termination clauses: Most agencies require 30 to 90 days notice to cancel. Anything longer than 90 days should raise questions.
Data ownership: If you part ways, who keeps the ad accounts, creative assets, and analytics data? Make sure you own everything built with your money.
Scope definition: What exactly is included in the monthly fee? What counts as out-of-scope work, and how is it billed?
Performance benchmarks: Try to agree on specific KPIs the agency will work toward. This is not the same as a results guarantee (which is a red flag), but it sets clear targets.

Negotiation tips: start with a shorter initial term (3 months instead of 12) so you can evaluate fit with less risk. Ask about hybrid pricing models that combine a base retainer with performance bonuses. And always insist on a clear exit clause with reasonable notice periods. Contract review is where the question of how to choose a marketing agency gets real, because it protects you if the relationship does not work out.

Step 7. Start With a Trial Project

If you are still unsure after steps one through six, start small. Many agencies will take on a one-time project (an SEO audit, a landing page, a paid ad campaign) before you commit to a retainer.

A trial project lets you evaluate:

How well they listen and incorporate your feedback
The quality of their strategic thinking (not just execution)
Their reporting and communication cadence
Whether their team is responsive and easy to work with

Set clear benchmarks for the trial. If they deliver, expand the relationship. If they do not, you have learned something valuable without a long-term commitment. This approach is one of the most practical ways to figure out how to hire a digital marketing agency with confidence. It turns the question of how to choose a digital marketing agency from a leap of faith into an evidence-based decision.

Red Flags That Should Make You Walk Away

Part of learning how to choose a digital marketing agency is knowing when to walk away. Recognizing red flags early saves you from signing with the wrong partner. Here are the warning signs that should end the conversation:

They guarantee specific rankings or results. No real agency can promise you the top spot on Google. Search algorithms are Google's domain, not your agency's. Anyone making guarantees is either lying or using shady tactics that could get your site penalized.
Their proposal is generic. If the pitch could apply to any business in any field, the agency did not do its homework. A strong proposal names your specific goals, challenges, and rivals.
Pricing is vague or has hidden costs. If you cannot get a straight answer about what things cost, that is a problem that will only get worse over time.
Their portfolio is outdated. Digital marketing changes fast. Work from three or more years ago tells you very little about what an agency can do today.
They jump to tactics without asking questions. If the first call is all about what they want to do and nothing about what you need, they are selling a playbook, not building a plan. Knowing how to choose a marketing agency means spotting the gap between listening and pitching.
They focus on vanity metrics. Likes, impressions, and followers feel good but rarely pay the bills. A good agency leads with revenue metrics: leads, sales, cost per lead, and return on ad spend.
They will not share references. Every good agency has happy clients who will vouch for them. If they will not connect you with references, walk away.

10 Questions to Ask Before Signing

Once you find a marketing agency that looks like a good fit, ask these questions before you commit. The answers will tell you more than any sales deck:

What specific results have you delivered for businesses similar to mine in size and industry?
How do you measure and report on performance, and how often will I receive updates?
What is the complete pricing breakdown, including any fees beyond the base retainer?
Who will be my dedicated point of contact, and what is their experience level?
Can you share a sample contract so I can review the terms before our next conversation?
How do you handle it when a campaign underperforms expectations?
What tools and platforms do you use for analytics, reporting, and project management?
What does your onboarding process look like for new clients?
How do you stay current with changes to search algorithms, ad platforms, and industry best practices?
Can I speak with two or three current or recent clients as references?

The way an agency answers these questions is as revealing as the answers themselves. Confident, specific responses are a good sign. Deflection, vagueness, or discomfort is not. These questions are essential to how to choose a digital marketing agency because they reveal whether the team has the experience and transparency to deliver real results.

How to Find a Marketing Agency That Fits Your Business

Once you know what you are looking for, the question becomes where to look. If you have been wondering how to find a marketing agency with the right expertise, these channels consistently produce the best candidates:

Referrals from other business owners: The most reliable way to find a marketing agency. Ask peers in your industry or local business groups who they work with and whether they would recommend them.
Agency directories: Platforms like Clutch and UpCity aggregate agency reviews, case studies, and pricing information. They are a useful way to find a marketing agency and build a shortlist based on verified reviews.
Industry events and conferences: Local business expos and marketing conferences are a great way to find a marketing agency in person. Meeting a team face to face tells you a lot about their culture and how they communicate.
LinkedIn and professional networks: Another effective way to find a marketing agency is through LinkedIn. Search for agencies that specialize in your industry and look at their content, client testimonials, and employee expertise.

When evaluating fit, consider the agency's size relative to yours. A small business with a $3,000 monthly budget will get more attention from a boutique agency with 5 to 15 clients than from a large firm managing hundreds of accounts. You want to be a priority, not an afterthought. Knowing how to find a marketing agency is just the first step. The real skill is narrowing your list to the two or three agencies that are the best match for your specific needs.

What Realistic Results Look Like

One of the biggest mistakes small business owners make when learning how to choose a digital marketing agency is starting with unrealistic expectations. If you expect overnight results, you will be disappointed no matter who you hire. Here is what the data actually shows for ROI benchmarks across different channels: Channel Typical ROI/Benchmark Timeline Email Marketing $42 return per $1 spent 1 to 3 months to see results Social Media Advertising $5 return per $1 spent 1 to 2 months for initial data PPC (Google Ads) 3:1 ROAS or better 2 to 4 months to optimize SEO / Content Marketing 5:1+ long-term ROI 6 to 12 months for meaningful traffic Overall Digital Marketing 5:1 target Varies by channel mix

A few key points. SEO takes longer to show results, but it compounds over time. Paid ads deliver faster but stop the moment you turn off the budget. The best agencies set clear timeline expectations up front and never promise overnight wins.

For lead generation, a healthy CAC-to-CLV ratio is 1:3 or better. That means every dollar you spend to get a customer should bring back at least three dollars in lifetime value. For website performance, a conversion rate of 2 to 5 percent is a solid target for small business sites. Having these numbers in your head makes it easier to find a marketing agency that sets honest expectations.

Making Your Decision

Choosing the right digital marketing agency comes down to preparation. Now that you understand how to choose a digital marketing agency using a structured framework, the next step is putting it into action. Define your goals, understand your budget, evaluate track records with real numbers, and pay attention to how agencies communicate before you sign.

The seven-step framework in this guide is designed to take the guesswork out of the process. If you follow it, you will walk into agency conversations informed, and you will walk away with the confidence that your investment is going to the right place.

Understanding how to choose a digital marketing agency is not about finding the cheapest option or the flashiest pitch. It is about finding a partner who understands your business, communicates honestly, and delivers results you can measure. Whether you need to find a marketing agency for the first time or replace one that did not deliver, the steps are the same. Take your time, ask the hard questions, and trust the process.

If you are weighing whether to handle some of your marketing yourself before bringing in an agency, keep an eye out for our upcoming guide to DIY SEO for small business. It covers what you can realistically do on your own, when it makes sense to find a marketing agency to help, and how to choose a digital marketing agency that complements the work you are already doing in-house.

FAQs

How much does a digital marketing agency cost for a small business?

Monthly retainers for small businesses typically range from $1,000 to $5,000 for basic services like SEO or social media, and $5,000 to $10,000 for multi-channel campaigns. Hourly rates range from $50 to $400+, and project-based work runs from $2,500 to $50,000 depending on scope.

What ROI should I expect from a digital marketing agency?

A strong overall target is 5:1 ROI ($5 revenue per $1 spent). Email marketing averages $42 per $1, social media advertising averages $5 per $1, and PPC campaigns should target 3:1 ROAS or better. SEO typically takes 6 to 12 months but delivers the highest long-term returns.

What are red flags when choosing a marketing agency?

Major red flags include guaranteeing specific rankings, generic non-customized proposals, vague pricing with hidden costs, outdated portfolios, jumping to tactics without asking about your goals, focusing on vanity metrics like likes and impressions, and refusing to provide client references.

Continued Reading

View All Insights [ 11 min read

Low-Cost Marketing Ideas for Small Business

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Google Shopping Management: Complete Guide | MKDM

Matt Kundo — Sat, 25 Apr 2026 05:04:02 +0000

Home / Blog / Google Shopping Guide Jun 15, 2026 14 min read Google Shopping Management: Complete Guide

Google Shopping captures 85% of retail ad clicks. Learn product feed optimization, campaign structure, bidding strategies, and Performance Max tactics for maximum ROAS.

Matt Kundo Marketing Consultant mkdm agent

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Google Shopping ads dominate ecommerce advertising. They capture 85.3% of all retail Google Ads clicks and account for 76.4% of U.S. retail search ad spend. If you sell physical products online, Google Shopping management isn't optional. It's where the majority of your paid traffic should come from.

But managing Google Shopping campaigns is fundamentally different from running standard search ads. Success depends on your product feed, your campaign structure, and your bidding strategy working together. Get one wrong and you waste budget. Get all three right and Google Shopping delivers some of the strongest ROAS in digital advertising.

Google Shopping vs. Search Ads: When to Use Each
Google Merchant Center: Setting Up Your Foundation
Product Feed Optimization: The Key to Shopping Success
Campaign Structure: Standard Shopping vs. Performance Max
Bidding Strategies for Google Shopping
Common Google Shopping Mistakes and How to Fix Them
Measuring Google Shopping Performance
Your Google Shopping Management Action Plan
Frequently Asked Questions

This guide covers everything you need to know about Google Shopping management: product feed optimization, campaign structure, bidding strategies, common mistakes, and when to choose Shopping over standard search ads.

Google Shopping vs. Search Ads: When to Use Each

Google Shopping and standard search ads serve different purposes. Understanding when to use each is the foundation of smart Google Shopping management.

Google Shopping ads display product images, prices, and store names directly in search results. They work best for:

High-intent product searches ("buy running shoes," "Samsung TV 65 inch")
Price-competitive products where visual comparison helps
Ecommerce stores with well-organized product catalogs
Retargeting previous website visitors with specific products

Standard search ads work better for:

Service-based businesses
Broad or informational queries
Products that need explanation rather than visual comparison
Markets where price isn't the primary differentiator

The data supports a heavy Shopping allocation. Retailers allocate 80% of their Google Ads budget to Shopping versus 20% to search ads, and for good reason. Shopping CPC averages $0.50-$0.95, which is 40-55% lower than standard search ads. That means more clicks for the same budget.

However, search ads convert at a higher rate (4.2% versus 1.9% for Shopping). The trade-off: Shopping brings more volume at lower cost, while search brings fewer but higher-intent clicks. Effective Google Shopping management uses both, with Shopping handling the product-focused queries and search handling the research and comparison queries.

Google Merchant Center: Setting Up Your Foundation

Everything in Google Shopping management starts with Google Merchant Center. This is where your product data lives, and it determines whether your products show up in search results at all.

Essential Merchant Center Setup

Product feed requirements:

Product title (include keywords: brand, product type, key attributes)
Description (detailed, keyword-rich, unique for each product)
Images (high-quality, white background preferred, no watermarks)
Price (must match your website exactly)
Availability (in stock, out of stock, preorder)
GTIN, MPN, or brand (at least two of three required)
Product category (Google's taxonomy)
Shipping information
Link to product page

Common compliance issues:

Price mismatch between feed and website (automatic disapproval)
Missing GTIN/MPN identifiers (limited reach)
Low-quality images (blurry, watermarked, or cluttered backgrounds)
Misleading product descriptions (policy violation)
Landing page issues (slow load, broken links, mismatched data)

Google removed 5.1 billion ads and suspended millions of advertiser accounts for policy violations in recent years. Clean, accurate data is non-negotiable in Google Shopping management.

Product Feed Optimization: The Key to Shopping Success

Your product feed is the single most important factor in Google Shopping management. Google uses your feed data to decide which searches trigger your products and where they appear. A poorly optimized feed means your products show for the wrong searches or don't show at all.

Title Optimization

Product titles are the most impactful optimization in your feed. Here's the formula:

Format: Brand + Product Type + Key Attributes (size, color, material, model)

Examples:

Bad: "Running Shoes"
Good: "Nike Air Zoom Pegasus 41 Men's Running Shoes Black Size 10"
Bad: "Laptop"
Good: "Dell XPS 15 Laptop 15.6 inch 32GB RAM 1TB SSD Intel Core i9"

Include search terms customers actually use. Check your Google Search Console data and Google Ads search terms report to identify the keywords your audience types.

Description Optimization

Write unique descriptions for each product. Don't copy manufacturer descriptions that every competitor uses. Include:

Primary product benefits
Key specifications
Use cases
Keywords naturally integrated

Image Optimization

Google Shopping is visual. Your product image is the first thing shoppers see.

Use white backgrounds for primary images
Show the product clearly without clutter
Include multiple images: main view, side view, detail shots, lifestyle shots
Minimum 800x800 pixels, recommended 1200x1200
No text overlays, watermarks, or promotional badges

Category and Product Type Optimization

Use the most specific Google product category available. "Apparel > Shoes > Athletic Shoes > Running Shoes" performs better than just "Apparel > Shoes" because it helps Google match your products to specific search queries.

Custom Labels for Segmentation

Custom labels let you organize products for campaign segmentation:

Label by profit margin (high, medium, low)
Label by seasonality (spring, summer, year-round)
Label by performance tier (bestsellers, new arrivals, clearance)
Label by price range ($0-25, $25-50, $50-100, $100+)

This segmentation is essential for advanced Google Shopping management because it lets you set different bids and budgets for different product groups.

Campaign Structure: Standard Shopping vs. Performance Max

Google offers two main campaign types for Shopping, and choosing the right one is a core Google Shopping management decision.

Standard Shopping Campaigns

Standard Shopping gives you more control over targeting, bidding, and product grouping. Use it when:

You want to set manual bids or use target ROAS bidding
You need granular control over which products get budget
You want to exclude specific search terms
You're testing new products and want precise data

Recommended structure:

Campaign 1: Top performers (bestsellers, highest margin)
Campaign 2: Mid-tier products
Campaign 3: New arrivals and test products
Campaign 4: Clearance / low-margin items (lower bids)

Performance Max Campaigns

Performance Max achieves 12% higher conversion rates than standard campaigns by using AI to serve ads across Shopping, Search, Display, YouTube, and Gmail simultaneously.

Use Performance Max when:

You want maximum reach across all Google properties
You trust the algorithm with bidding decisions
You have enough conversion data (50+ conversions per month recommended)
You want to simplify campaign management

Performance Max tips for Google Shopping management:

Provide high-quality asset groups (images, videos, headlines, descriptions)
Use audience signals to guide the AI (customer lists, website visitors, in-market audiences)
Exclude brand terms if you're running separate brand campaigns
Monitor search term insights to identify irrelevant queries

Most ecommerce businesses now use a combination: Performance Max for broad coverage and standard Shopping for specific product groups that need precise control.

Bidding Strategies for Google Shopping

Your bidding strategy determines how much you pay per click and ultimately your ROAS. For effective Google Shopping management, choose based on your data volume and goals.

Manual CPC: Full control over bids. Best for new accounts or when you need precise budget management. Set bids by product group based on margin and performance.

Target ROAS: Tell Google your desired return on ad spend, and the algorithm adjusts bids to achieve it. Requires 15+ conversions in the last 30 days for effective learning. Average ecommerce ROAS is 4:1, with top performers at 8:1 to 12:1.

Maximize Conversion Value: Google spends your full budget to maximize total conversion value. Good for scaling but can overspend on low-margin products without value rules.

Enhanced CPC (eCPC): Manual bids with Google adjusting up or down based on conversion likelihood. A good middle ground for accounts with limited conversion data.

Common Google Shopping Mistakes and How to Fix Them

1. Ignoring negative keywords. Google Shopping doesn't use traditional keywords, but you can add negative keywords to prevent irrelevant searches. Review your search terms report weekly and exclude terms that waste budget.

2. Using a single campaign for all products. Grouping everything together means your best products compete with your worst for the same budget. Segment by performance, margin, and priority.

3. Not optimizing product titles. Generic titles mean generic traffic. Detailed, keyword-rich titles improve both click-through rate and conversion rate significantly.

4. Feed errors left unfixed. Disapproved products and feed warnings reduce your reach. Check Merchant Center diagnostics weekly and fix errors immediately.

5. Ignoring the competitive landscape. Use the Merchant Center price competitiveness report to see how your prices compare. If you're consistently the most expensive, Shopping ads will underperform regardless of optimization.

6. Not running remarketing. Shopping remarketing ads target visitors who viewed specific products but didn't buy. These campaigns typically deliver 3-5x higher conversion rates than prospecting campaigns.

Measuring Google Shopping Performance

Google Shopping management requires ongoing measurement and optimization. Track these metrics weekly:

ROAS (Return on Ad Spend): Revenue / Ad spend. Aim for 4:1+ for sustainable profitability.
Impression Share: What percentage of eligible impressions your products receive. Below 60% means you're missing opportunities.
Click-Through Rate: Average 0.86% for Shopping. Below 0.5% suggests title or image issues.
Conversion Rate: Average 1.9% for Shopping. Below 1% needs landing page attention.
Cost Per Conversion: Track by product group, not just overall. Some products convert cheaply; others don't.

If you're already tracking marketing metrics for your small business, adding these Shopping-specific KPIs completes the picture of your paid media performance.

Your Google Shopping Management Action Plan

Week 1: Audit your feed. Review every product title, description, and image. Fix any Merchant Center errors or warnings. Ensure price and availability match your website.

Week 2: Structure your campaigns. Segment products by performance and margin. Set appropriate bids for each segment. Add negative keywords from your search terms report.

Week 3: Optimize and expand. Add more images, improve titles with search term data, and test Performance Max if you have sufficient conversion data.

Ongoing: Review search terms weekly, check feed health daily, analyze ROAS by product group monthly, and adjust bids based on performance data.

If you need professional Google Shopping management or want help optimizing your product feed for better performance, contact our team. We manage Google Ads campaigns for ecommerce businesses that want to maximize their Shopping ROI.

Frequently Asked Questions

What is a good ROAS for Google Shopping ads?

A good ROAS for Google Shopping is 4:1 or higher (earning $4 for every $1 spent). Top-performing accounts achieve 8:1 to 12:1. Below 3:1 generally means your campaigns need optimization, either in feed quality, bidding strategy, or product selection.

Google Shopping vs. search ads: which should I use?

Use Google Shopping for product-focused searches where visual comparison matters. Use search ads for broader, informational, or service-related queries. Most ecommerce businesses allocate 80% to Shopping and 20% to search. Both work better together than alone.

How do I optimize my Google Shopping product feed?

Focus on product titles first (include brand, product type, and key attributes). Write unique descriptions. Use high-quality white-background images. Ensure accurate pricing and availability. Use custom labels to segment products for campaign management.

What is Performance Max and should I use it?

Performance Max is Google's AI-powered campaign type that serves ads across Shopping, Search, Display, YouTube, and Gmail. It achieves 12% higher conversion rates than standard campaigns. Use it if you have 50+ monthly conversions and want broad reach. Keep standard Shopping for products needing precise control.

How much does Google Shopping advertising cost?

Average CPC for Google Shopping is $0.50-$0.95, which is 40-55% lower than standard search ads. Monthly budgets for small ecommerce businesses typically range from $500-5,000. Start with $1,000-2,000 per month for enough data to optimize effectively.

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View All Insights [ Recent News & Marketing News & Google Ads & Paid Media & YouTube 9 min read

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Google Ads YouTube Creator Partnerships: PMax Action Plan | MKDM

Matt Kundo — Sat, 25 Apr 2026 05:03:18 +0000

Home / Blog / YouTube Creator Partnerships Recent News & Marketing News & Google Ads & Paid Media & YouTube Apr 24, 2026 9 min read Google Ads YouTube Creator Partnerships: PMax Action Plan

Google Ads unveiled the unified YouTube Creator Partnerships platform with Boost and Open Call, plugging creator video into Performance Max and Demand Gen. Here is the 4-step readiness framework and a 12-step action plan for SMBs.

Matt Kundo Marketing Consultant mkdm agent

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The line between creator marketing and performance advertising just blurred in a major way. Google Ads unveiled the unified YouTube creator partnerships Google Ads platform at NewFronts 2026, and the Ads Decoded podcast episode this week walked through the playbook with Product Liaison Ginny Marvin and Director of Product Management for YouTube Ads, Melissa Hsieh Nikolic. Most small business advertisers I talk to skip YouTube creators because it feels expensive and hard to measure. These tools change that calculus. This is the readiness framework and the exact action plan I would run this week, with direct tie-ins to my Google Ads management guide for SMBs.

What Just Happened at YouTube NewFronts

YouTube Creator Partnerships, formerly known as BrandConnect plus the Creator Partnerships Hub, was unified into a single platform in March 2026 and now sits directly inside Google Ads and Display & Video 360. The unified platform launched live in 7 markets at NewFronts 2026: USA, UK, Canada, India, Brazil, Australia, and Indonesia. Two mechanisms sit at the center of the announcement. Creator Partnerships Boost converts an organic creator video into a paid ad asset that runs inside performance campaigns. Open Call flips the model entirely, letting a brand publish a creative brief that Gemini matches to relevant creators who respond with video submissions.

According to Melissa Nikolic on the YouTube Official Blog, the platform now provides Gemini-powered access to more than 3 million creators inside the YouTube Partner Program. The technical detail behind both Boost and Open Call was unpacked publicly for the first time in PPC Land's coverage of the Ads Decoded podcast, which covered the Marvin and Nikolic conversation in depth. According to Ginny Marvin and the broader Google Ads positioning, the goal is to bring creator content into the same performance campaign types where SMBs already buy.

Why This Matters for Your Google Ads Strategy

The Performance vs. Brand Awareness Divide Just Closed

Creator content historically lived in brand-awareness budgets. Creator Partnerships Boost plugs creator video directly into Demand Gen, Performance Max, Video Reach, Video View, and App campaigns. According to the YouTube Official Blog, advertisers who promoted creator-led videos on YouTube Shorts saw an average 30% increase in conversion lift (Google Data, Global, January 2025 to January 2026). The same announcement cites a Google-commissioned MMM meta-analysis with Circana finding that YouTube drives 86% higher incremental long-term ROAS than paid social. Trust matters too: 78% of viewers say YouTube has the most trusted creators for product recommendations.

What Is the Boost Workflow?

The Boost workflow begins with a digital handshake. An advertiser navigates to Tools, then Data Manager, then the YouTube section in Google Ads, clicks the plus button, and selects Link creator video. The advertiser enters the creator's video URL, which fires a notification to the creator inside YouTube Studio. The creator reviews the terms, checks the box, and the link is established. An alternative entry point sits inside the Demand Gen asset picker, where the advertiser can paste a creator video URL directly into the asset field.

Three unlocks follow the handshake. First, a co-branded ad format that carries both the brand logo and the creator avatar with separate click targets. Second, unified reporting under Tools, Creator Partnerships, Analytics that combines organic and paid metrics in a single view. Third, custom audience segments built from viewers of the linked video, usable as remarketing lists or as seeds for lookalike expansion in Demand Gen. According to Melissa Nikolic, that audience segment unlock was "a sleeper hit when we launched this."

What Is the Open Call Mechanism?

Open Call inverts the typical creator marketing workflow. Instead of the advertiser hand-selecting creators and negotiating individual deals, the brand publishes a creative brief inside the Creator Partnerships hub. Gemini identifies and reaches out to relevant creators based on audience similarity, content category, and organic brand mentions. Those creators submit videos in response. The brand and Google's review systems assess the submissions. The brand then licenses the winning video as a paid ad or converts the relationship into an ongoing partnership.

This removes the cold-outreach friction that has blocked SMB adoption of creator marketing for a decade. A small business no longer needs to hire an influencer agency, build a creator relationship roster, or negotiate one-off deals. According to Melissa Nikolic, Open Call is "designed to potentially be a first foray" for advertisers seeking new creators or working with creators for the first time. For my clients, this is the most consequential change in the announcement. The brief-first model means the brand keeps creative control without over-specifying. Per the Ads Decoded coverage, Google's own A/B testing showed that overly prescriptive briefs produce worse creator content. Loose briefs that give creators room to talk about a brand in their own voice consistently outperformed tight specs.

SMB Readiness: Is This Right for You?

According to Ginny Marvin on the NewFronts coverage, finance firms are cited as a top-performing vertical for creator marketing. That contradicts the assumption that creator content is retail-only. Regulated sectors including banking can access creator tools so long as the advertiser holds the same certifications required for sensitive Google Ads categories. The minimum bar to participate: an active Demand Gen or Performance Max campaign, a visually demonstrable offer, and willingness to license existing creator content or issue an open brief.

The 4-Step Creator Partnership Readiness Framework

Before you spend a dollar on creator content, answer these four questions. This is the 4-step Creator Partnership Readiness Framework I use with clients evaluating the new tools, and it doubles as my Creator Partnership Readiness Checklist for internal audits.

Do you have an active Demand Gen or Performance Max campaign? Creator Boost only plugs into the performance campaign types. If you are running only Search, you need a Demand Gen campaign built first before any creator asset can activate.
Is your offer visually demonstrable? Creator content works when the product or service can be shown in use: physical goods, software demos, services with clear before-and-after outcomes. Abstract B2B services with long sales cycles will struggle to generate enough performance signal.
Can you license creator content or issue an open brief? Boost needs an existing creator relationship with usable video. Open Call needs a written brief describing product fit, visual style, and the offer. Pick the path you have capacity for this quarter.
Is your target audience on YouTube 18 to 34? Younger millennials and Gen Z drive the creator trust numbers. If your buyer is 55-plus enterprise, creator marketing is a secondary channel, not a primary one.

Four yes answers means you are ready for Open Call. Two or three means start with Boost on an existing creator relationship. Zero or one means build audience first and revisit this framework in six months.

Your Action Plan: From Zero to First Creator Campaign

Audit your current Google Ads campaigns for Demand Gen or Performance Max eligibility. If neither runs yet, prioritize building a Demand Gen campaign this month so the creator asset has a home.
Confirm video ad groups are enabled inside your PMax campaigns. This is the asset surface where boosted creator content appears, and it is not always turned on by default.
Identify any existing YouTube creator relationships that could qualify for the Boost workflow. Past sponsorships, affiliate deals, and organic product mentions all qualify for the handshake.
Navigate to Tools, then Creator Partnerships inside Google Ads. Build a creator list for discovery, even if you do not plan to activate a campaign immediately.
Draft a creator brief for Open Call. Describe product fit, visual style, target demographic, and the offer in three to four paragraphs. Keep it loose rather than prescriptive.
Layer custom audience segments (remarketing and lookalike) over creator ad sets. This is the unlock Nikolic called "a sleeper hit" at launch and it is undervalued in competitor coverage.
A/B test creator content against standard PMax creative assets. Use the unified organic-and-paid reporting under Tools, Creator Partnerships, Analytics to see the combined performance picture.
Monitor view-through conversions and engagement rate, not just direct conversions. Creator content operates on a longer consideration cycle than direct response display advertising.
Set a 90-day review threshold before pausing any creator content. According to the Agentio 2026 YouTube Creator Marketing Playbook, nearly 40% of YouTube video views happen more than 30 days after upload, and 30% of clicks land in the same window.
Budget 15% of your video ad spend toward creator assets in the first quarter, then scale to 35% once you have conversion lift data. This is the allocation range I recommend for SMB clients testing the format, and it keeps the experiment bounded while still giving the creative enough spend to generate statistical significance.
Cap your first Open Call creative brief at $1,000 in creator compensation across all responding submissions. Pay $200 per shortlisted creator for an initial video proposal, then scale up spend on the 1 to 2 winners you activate into Demand Gen. This is roughly an 80% cost reduction versus hiring an agency to manage traditional influencer outreach.
Document creator content licensing terms in writing before scaling spend. The Boost handshake in YouTube Studio confirms the link, but contract terms should sit separately in a signed agreement.

Want Help Running Your First Creator Campaign?

I offer Google Ads management services that include campaign audits, creator partnership configuration, and Open Call brief development. I handle the readiness framework, the Boost handshake workflow, custom audience layering, and the measurement setup across organic and paid reporting.

For clients without an existing creator roster, I can write and post the Open Call brief, review creator submissions alongside your team, and plug the winning video into a Demand Gen or Performance Max campaign within the same sprint. If you want help turning this into a first live campaign in the next 30 days, reach out through my contact page. More on my approach lives on the Google Ads management guide.

Frequently Asked Questions

What is the Google Ads Boost workflow for YouTube creator partnerships?

Creator Partnerships Boost is a workflow inside Google Ads that turns an organic creator video into a paid ad asset. The advertiser links a creator video via Data Manager or the Demand Gen asset picker, the creator accepts a handshake inside YouTube Studio, and the video becomes available as a co-branded ad that runs inside Demand Gen, Performance Max, Video Reach, Video View, or App campaigns.

How do I add YouTube creator content to a Performance Max campaign?

Inside Google Ads, navigate to Tools, then Data Manager, then the YouTube section. Click the plus button and select Link creator video. Enter the creator's video URL. The creator will receive a notification in YouTube Studio to accept the partnership. Once accepted, the video becomes an asset you can add to any Performance Max campaign with video ad groups enabled.

What is the difference between Google Ads Creator Partnership Ads and standard influencer marketing?

Standard influencer marketing happens outside ad platforms: brands pay creators for sponsored posts, and the creator's audience sees the content organically. YouTube Creator Partnerships inside Google Ads lets brands buy the creator video as a paid asset inside performance campaigns with full measurement, audience targeting, Brand Lift, Search Lift, and Conversion Lift studies, and unified organic-plus-paid reporting.

Does my business need a large budget to use YouTube creator ads in Google Ads?

No minimum spend is specified in the announcement. Creator content plugs into existing Demand Gen and Performance Max campaigns, so the spend floor matches whatever budget those campaigns already carry. Open Call has no listed entry fee. For SMBs, the realistic starting point is a Demand Gen campaign running at least $500 per month before layering a creator asset, though your specific readiness depends on the 4-step framework above.

Continued Reading

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Rates Down 2.1% as 358 Plans Exit Market | TX Commercial Electricity - Apr 2026 - Texas Commercial Plans

Matt Kundo — Thu, 23 Apr 2026 23:08:38 +0000

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      Weekly Market Report
      April 21, 2026
      8 min read
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    Texas Commercial Electricity Market: Rates Drop 2.1% as 358 Plans Exit the Market, April 14–20, 2026

Average Texas commercial electricity rates fell 2.1% week-over-week as a major plan withdrawal reshaped the available market, with AEP Central territory seeing the sharpest rate declines and long-term contracts posting the widest discount to short-term options.

Market Pulse

Across the 267 Texas commercial electricity plans tracked in the texascommercialplans.com database for the week of April 14 through April 20, 2026, average rates moved lower by 2.1% compared to the prior week, settling at a market average of $0.1148 per kWh. The median rate across all active plans stood at $0.1155 per kWh, reflecting a relatively tight distribution outside the plan extremes tracked among 28 active Texas REPs.

The more significant story is what happened to overall market volume: 358 plans were removed from the ERCOT retail market this week while 227 new plans were filed, a net reduction of 131 available options. This level of plan churn is meaningful for any commercial buyer currently mid-procurement. Plans you received quotes on even two weeks ago may no longer be available, and the competitive set for your service territory has narrowed measurably.

For buyers with contracts expiring in the next 60-90 days, the data this week points toward a market that is consolidating options while rates show modest downward pressure. That combination warrants closer attention than a 2% weekly decline alone would suggest.

What's Moving the Market

      - **Google Executes Texas Solar PPAs:** Google selected a renewable energy developer to supply two long-term solar Power Purchase Agreements (PPAs) for Texas projects. The deals add to a growing pipeline of large corporate off-takes on the [ERCOT grid](https://www.ercot.com), which historically increases renewable generation capacity and puts structural downward pressure on wholesale electricity prices during peak solar hours. Commercial buyers watching summer 2026 forward prices should note continued corporate renewable buildout as a factor in ERCOT supply.

      - **Meta Partners on 850-Acre Solar Farm in Anderson County, Texas:** Meta has partnered with developer Zelestra on an approximately 850-acre, 176 MW solar project in Tennessee Colony, Anderson County. Construction is scheduled to begin in mid-2026, with the project adding $90-147 million to the local tax base over time and incorporating sun-tracking panels to maximize generation efficiency. While the project will not contribute meaningfully to 2026 summer supply, it reinforces the long-term trajectory of Texas solar generation capacity growth within [PUCT-overseen](https://www.puc.texas.gov) deregulated markets. Buyers evaluating multi-year contracts should factor continued grid supply expansion into their rate outlook assumptions.

      - **Variable Rollover Plans Increasing in CenterPoint and TNMP Territories:** Several variable-rate post-term (rollover) plans in CenterPoint and TNMP service areas moved higher this week, reinforcing a recurring pattern. Commercial customers who allow fixed-term contracts to expire without renewals are increasingly exposed to rollover rates that run meaningfully above current market averages. Procurement teams should audit contract end dates now, before summer demand peaks drive further rollover rate movement.

Texas Commercial Electricity Pricing Trends

The overall 2.1% market average decline understates the variance between TDU service territories this week. AEP Central territory saw the largest week-over-week rate movement among the five Texas TDU areas, with commercial plan averages dropping substantially from prior-week levels. TNMP territory and CenterPoint territory also posted significant declines. Oncor territory, which covers the largest share of tracked active plans (86 of 267), declined by a much smaller margin, anchoring the market average closer to flat than the extreme territory movements suggest.

By contract term, long-term plans (25-36 months) carry average rates well below both short-term (1-12 months) and mid-term (13-24 months) options. The discount for committing to a longer contract term is more pronounced now than it has been for several weeks, which may reflect REPs pricing in anticipated summer demand peaks into shorter-term offerings while keeping long-term contracts attractively priced to secure volume ahead of the high-demand season.

Among the 69 plans tracked with direct week-over-week rate comparisons, decreases outnumbered increases roughly 2 to 1: 21 plans declined, 10 increased, and 38 held unchanged. The average change among plans that did move was a decline of 11.7%, driven primarily by plans in the variable and short-term segments resetting lower. Several plans saw large single-week swings in both directions, a pattern more consistent with portfolio repricing than underlying cost movement.

Our rate trend chart for the past four weeks shows continued divergence between Oncor territory averages and the rest of the Texas market, with AEP Central and TNMP territories showing the widest weekly swings. See full pricing breakdown in our data download.

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REP Spotlight: AP Gas & Electric

This week's REP spotlight is AP Gas & Electric (APGE), a Texas-licensed retail electric provider with a portfolio concentrated in medium-term commercial contracts. APGE currently offers 8 plans tracked in the texascommercialplans.com database, with contract terms ranging from 10 to 15 months, giving commercial buyers a narrower term window than many competitors but more flexibility than standard 12-month fixed offerings.

APGE serves all five TDU service territories: AEP Central, AEP North, CenterPoint, Oncor, and TNMP. Full-territory coverage is not universal among Texas commercial REPs, making APGE an option worth evaluating for multi-location businesses that want rate consistency across geographies within a single provider relationship.

Six of APGE's eight tracked plans are green energy options, a higher renewable percentage than most commercial REPs in the market this week. All plans use a fixed-rate structure, which eliminates variability risk for buyers concerned about rollover exposure or index-linked pricing. Rate positioning across APGE's portfolio tracks below the current market average across tracked plans, though buyers should compare against their specific TDU territory for the most accurate picture.

Get this REP's full plan data in our data download.

Buyer Intelligence

What are current Texas commercial electricity rates?

The texascommercialplans.com dataset shows an average rate of $0.1148 per kWh across 267 active commercial plans for the week of April 14-20, 2026, with a median of $0.1155 per kWh. Long-term contracts (25-36 months) carry averages well below that market-wide figure, while short-term and mid-term options cluster closely around the median. Rates vary considerably by TDU territory, with CenterPoint territory plans running below the market average and AEP North territory plans running above it.

Should Texas businesses lock in electricity rates now or wait?

Based on this week's data, long-term plans are priced at a significant discount to shorter-term options, which is a pattern that has strengthened over the past several weeks. For businesses with predictable load profiles and contracts expiring before summer, locking in a 24-36 month fixed rate now avoids the risk of summer peak pricing. The 358-plan withdrawal this week also reduces the available competitive set, meaning procrastination on renewals carries real option-cost risk as fewer comparable alternatives remain in market. Buyers with high load flexibility or uncertainty about future facility use may still prefer short-term options, accepting higher per-kWh costs for operational adaptability.

Data Snapshot: April 14–20, 2026

      - **Tracked REPs this week:** 28

      - **Active commercial plans:** 267

      - **Plans added this week:** 227

      - **Plans removed this week:** 358

      - **Plans with rate changes:** 31

      - **Avg contract term:** 11.9 months

      - **Market avg rate:** $0.1148/kWh

      - **Week-over-week change:** -2.1%

      - **Rate changes tracked (of comparable plans):** 21 decreases vs 10 increases

Full rate data, plan comparisons, and historical trends available in our data download. Prior weekly reports: April 8, 2026 report | All weekly reports | Daily market news.

Frequently Asked Questions

Why did so many commercial electricity plans get removed from the Texas market this week?

The Texas deregulated electricity market routinely sees REPs file, update, and withdraw plans as they adjust product portfolios in response to ERCOT forward prices and operational costs. The 358 plan removals during April 14-20, 2026 represent a significant restructuring event, most likely tied to end-of-term filing cycles and seasonal rate resets ahead of the summer peak demand period. Buyers actively in procurement should confirm that any plan they received a quote on remains available before executing a contract.

Which TDU territory had the most rate movement for Texas commercial electricity this week?

AEP Central territory saw the largest week-over-week rate movement among the five Texas TDU service areas for the week of April 14-20, 2026, with commercial plan averages declining substantially from prior-week levels. Oncor territory showed the most stability, with a much smaller percentage decline. The spread between TDU territories reinforces why commercial buyers should compare rates specifically for their service area rather than relying on statewide market averages. Check PUCT for official TDU territory maps.

What contract length offers the best value for Texas commercial electricity buyers right now?

Based on the texascommercialplans.com dataset for April 14-20, 2026, long-term commercial plans (25-36 months) carry average rates meaningfully below both short-term and mid-term options, a discount that has widened over the past several weeks. Buyers willing to commit now can lock in a significant per-kWh savings relative to current 12-month rates. That said, ERCOT forward prices can shift quickly as summer load approaches, and buyers with high operational flexibility may prefer short-term contracts to remain adaptable. Review full rate data and historical trends in our data download before committing.

Originally published at texascommercialplans.com