How to read an Electricity Facts Label

Every electricity plan sold in Texas comes with an Electricity Facts Label, or EFL. It is a short legal disclosure. State rules require one for every plan. The EFL states the plan’s real pricing: the rates, the fees, the credits, and the conditions attached to each.

The EFL is the document that matters. The ad is not. The plan name is not. If a plan charges a fee in certain months, it is in the EFL. If a credit only applies inside a usage window, the window is in the EFL. When your bill surprises you, the explanation is almost always sitting in this document.

We read the EFL for every one of the 638 plans we track. This guide shows you how to read one yourself.

You can get a plan’s EFL in three places.

• Power to Choose. Every listing on the state shopping site links to the plan’s EFL. Look for the “Facts Sheet” link.
• The provider’s website. Plan pages link to the EFL, usually near the signup button.
• Your own records. If you are already enrolled, the provider sent you the EFL with your contract documents. You can also request it any time.

One more thing to check: the date. EFLs carry an issue date, usually near the bottom. Providers update their EFLs when prices change. Make sure you are reading the current version for the plan you are about to buy.

Near the top of every EFL sits a small table. It shows the plan’s average price at three usage levels: 500, 1,000, and 2,000 kWh per month. These are the numbers that comparison sites display. They are also the numbers plans are built to win on.

Here is what “average price” means. Take everything the plan would charge at that exact usage. Include the energy charge, the base fee, the delivery charges, and any credit. Divide by the kWh. That is the number in the table.

The table is honest at those three points. The trouble is everywhere in between. A plan can be cheap at exactly 1,000 kWh and expensive at 900. The table will never show you that. Our guide to bill-credit plans walks through the most common version of this trick.

So treat the table as a starting point. The real information is in the sections below it.

Below the table, the EFL breaks the price into parts. Look for these.

• Energy charge. The rate you pay per kWh, in cents. Some plans have one rate for all usage. Others have tiers: one rate up to a certain usage, then another rate above it. Read the tier boundaries carefully.
• Base charge. A flat monthly fee, charged no matter how much you use. Common versions run from $0 to about $15 per month.
• Credits and fees with conditions. These are the big ones. We cover them two sections down.

A plan with a low energy charge and a high base charge favors heavy usage. A plan with no base charge favors light usage. Neither is a trick by itself. The math just lands differently for different homes.

Part of every Texas bill pays the company that owns the wires and poles. That company is your TDU, short for Transmission and Distribution Utility. You do not choose it. It comes with your address. Your provider bills you for it and passes the money through.

TDU charges have two parts: a flat monthly fee and a per-kWh rate. The EFL lists them, and here is the key fact: they are the same for every plan in your area. No plan can give you a discount on them. A plan that brags about low delivery charges is bragging about something it does not control.

Two cautions. First, TDU rates change on a state schedule, usually in March and September. An older EFL may show slightly outdated delivery numbers. Second, most plans list TDU charges as their own line, but some plans fold them into the energy charge instead. The EFL will say which. When you compare two plans, make sure you are comparing them the same way.

This is the section that explains most billing surprises. Read it slowly.

• Bill credits. A fixed dollar amount off your bill, but only in months when your usage lands inside a window. The EFL states the exact window. Under the minimum, no credit. Over the cap, if there is one, no credit. Our bill-credit guide covers how these reshape a bill.
• Minimum usage fees. A monthly fee charged when your usage falls below a set level. The EFL states the level and the amount.
• Other conditional fees. Some plans charge extra unless you meet a condition. A common one is a fee in any month you do not use autopay or paperless billing. These fees hide in the fine print and land every single month.

For each item, ask one question: in which of my twelve months does this apply to me? A credit you earn three months a year is not the credit the headline promised.

Three more items worth thirty seconds each.

• Contract term. The length of the plan in months. Your rate is fixed for the term. When it ends, you roll onto a default rate that is usually much higher. Set a reminder for the end date.
• Cancellation fee. What you pay to leave early. Common versions are a flat fee or a set amount per month remaining. One useful rule: moving to a new address usually lets you leave without the fee. The EFL says so in the fine print.
• Renewable content. The share of the plan’s power that comes from renewable sources. It is a disclosure, not a price term. It does not change your math.

Before you sign anything, find these six answers in the EFL.

1. The energy charge, and whether it has tiers.
2. The base charge.
3. Any credit, and its exact usage window.
4. Any minimum usage fee, and its cutoff.
5. Any fee tied to billing options, like autopay or paperless.
6. The term length and the cancellation fee.

If you can answer all six, you know the plan better than its ad wants you to. If any answer is hard to find, that is information too.