Landlord or Tenant: Who Buys the Electricity in a Texas Commercial Lease?

Say a hypothetical 15,000-square-foot Dallas retail space uses 30,000 kWh a month and sits on its landlord's master-meter contract, billed at 12¢/kWh all-in and passed through in the CAM statement. That's $3,600 a month baked into the tenant's occupancy cost. If that same space had its own ESI ID and shopped a competitive supply contract that brought the all-in cost down to 9¢/kWh, the bill would run closer to $2,700 a month, a $900 monthly gap, $10,800 a year, that the tenant never got a chance to capture because the lease put someone else in charge of the electricity account. Example numbers to show the math, not a live quote.

Every commercial electricity account in ERCOT territory is tied to an ESI ID, a long identifying number assigned to a specific meter at a specific address. If your suite has its own ESI ID, you are the customer of record with the retail electric provider. You pick the REP, you sign the contract, the supplier bills you directly. A master meter works differently. The landlord holds one ESI ID for the entire building or shopping center, and every tenant's usage runs through that single account. You never see an electricity bill in your own name. What you see is a rent invoice with electricity folded into the operating expense line. Submetering sits in the middle. The landlord still controls the master ESI ID and the underlying supplier contract, but each tenant space has its own physical submeter so the landlord can bill by actual usage instead of a flat per-square-foot split. It's fairer than a blanket allocation, but it doesn't hand the tenant an ESI ID or any ability to negotiate a separate rate. The landlord is still the one buying the power.

• Own ESI ID: You're the customer of record. You sign the REP contract, shop ERCOT suppliers directly, and get billed by the supplier.
• Master meter: The landlord holds the single ESI ID for the whole building. Your share of the utility cost is baked into rent or CAM. You never see a supplier contract.
• Submetered: The landlord still holds the master ESI ID and the supplier contract, but your suite has its own physical meter so your bill reflects actual usage instead of a flat square-footage split.

In a standard Texas NNN lease, electricity gets handled one of two ways depending on which meter setup the property has. If the suite carries its own ESI ID, the lease usually states plainly that the tenant is responsible for contracting and paying for electricity service directly with a retail electric provider. That's the clause you want. It means the account, and the choice of supplier, belongs to you. If the building is master metered, electricity gets classified as an operating expense and reimbursed through CAM, right alongside landscaping, parking lot lighting, and property management fees. Some landlords bill a flat per-square-foot estimate reconciled once a year. Others divide the actual utility bill by square footage or by submeter reading. Either way, you're paying for the electricity. You're just paying whatever rate your landlord negotiated, whenever they negotiated it, for however long that contract runs. If the landlord signed a fixed contract years ago and it rolled onto a variable index rate, every tenant in the building is now riding that variable rate through CAM with no seat at the table.

If your space has its own ESI ID, you're shopping electricity the same way any standalone Texas business does. You're not waiting on a landlord's renewal cycle. You're not tied to whatever REP the building next door happens to be using. You get quotes, compare fixed versus index pricing, and sign a contract on your own terms. The timing matters more than it might seem. A warehouse tenant on a 5-year lease who only locks a 12-month electricity contract is going to renew that supply contract four times over the lease term, each time exposed to whatever ERCOT pricing looks like at that moment. Matching your contract length to your lease term, or at least to a sensible renewal checkpoint inside it, can help keep energy costs predictable for the life of the tenancy. And if your account runs a 15-minute interval demand meter, say for a larger commercial account, get quotes that break out the demand charge separately from the energy rate. That's where the hidden cost can sit.

• Does this suite have its own ESI ID, or is the building on a master meter?
• If master metered, what is the landlord's current supplier, contract rate, and contract expiration date?
• If I have my own ESI ID, does the lease restrict which REP I can choose?
• If submetered, how is usage read and reconciled, monthly or annually, and who pays for meter calibration?
• Which TDU serves this address (Oncor, CenterPoint, AEP Texas, TNMP), and is it deregulated ERCOT territory or a municipal/co-op market with no retail choice at all?
• For a large space, does the lease pass through demand charges separately from energy charges, and how are they calculated?
• Can I see the last 12 months of actual electricity costs charged to the prior tenant in this suite?