When choosing a Texas electricity plan and energy rate, the Electricity Facts Label (EFL) sheet might not seem that important at first.
However, an EFL is critical to selecting a Texas energy plan that’s correct for your home so you can prevent a big billing surprise.
Let’s take a deeper dive into the components of an EFL so you can understand what each item means and learn how to use the information.
What’s an Electricity Facts Label?
In Texas, you can choose your own electricity provider. There’s no government-regulated monopoly as in the days before deregulation, when you paid whatever rate the regulators decided and didn’t have to worry about how to analyze energy plans to pick the best one for your home.
In the Lone Star State, you can choose from Texas electric companies ranging from large energy providers such as Reliant Energy and mid-size discount providers like Gexa Energy, to smaller companies who are reputable and innovative with low electricity rates such as Pulse Power and TriEagle Energy.
Some Texas light companies have cheap electricity plans with no gimmicks that provide predictable billing, while others use gimmicks that mislead consumers and cause monster billing surprises.
Also, electric companies such as Green Mountain Energy specialize in renewable energy “green” plans, including solar power plans that don’t require panels.
To help Texans compare plans on an apples-to-apples basis, the state created the state-mandated Electricity Facts Label (EFL), which providers must issue for each energy plan.
The EFL provides important disclosures about the energy rates you’ll pay at various usage levels so you can decide which plan best fits the usage pattern of your home.
It also gives other information such as the amount you’ll pay if you cancel your plan early, the plan’s term length, and whether your rate will be fixed or variable. These items will help you make a more informed choice.
You can use Smart Meter Texas to get your home’s historic energy usage, which is very convenient when reviewing the EFL’s price points for various usage levels.
Sample of an EFL
SECTION 1:
The most important part of the EFL is the section at the top showing the electricity rate.
This gives you a simple way to compare your “effective rate” at specific monthly usage amounts. These rates will vary by Transmission & Distribution Utility, or TDU (e.g., Centerpoint services Houston electricity and Oncor services Dallas-Fort Worth electricity).
Electricity
Price
| Average Monthly Use | 500 kWh | 1,000 kWh | 2,000 kWh |
| Average Price per kWh | 8.6 ¢ | 8.0 ¢ | 7.8 ¢ |
These prices are just examples. Your price for electricity will vary based on your actual usage.
The average prices above don’t include taxes and charges that may be ordered by a municipality
SECTION 2:
Just below the “effective rate” information is a breakdown of charges included in the rate calculation, including the energy rate and monthly fees.
Often these charges are broken out for the retail energy provider (REP, who sells you the energy) and the Transmission and Delivery Service Provider (TDSP, the regulated entity that maintains wires and corrects outages).
Other information may include tiered rates for different usage amounts in a given month, bill credits for reaching specific usage amounts, and other monthly fees.
Electricity
Price
| Base Charge: | $4.95 |
| Energy Charge: | 3.248¢ per kWh |
| TDU Delivery Charges: | $5.47 per month and 4.2536¢ per kWh |
SECTION 3:
The remainder of the Electricity Facts Label provides details such as whether the rate is fixed or variable, the term length of the contract, early termination fees, and renewable energy content.
Disclosure
Chart
Disclosure
|
Type or product
|
Fixed rate |
|
Contract Term
|
6 Months | |
|
Do I have a termination fee or any fees associated with terminating service?
|
Yes. An early termination fee of $150 will be charged for cancellation of service prior to the end of the contract. This fee will not apply if you move and provide a forwarding address or other evidence to verify you have moved. | |
| Can my price change during the contract period?If my price can change, how will it change and by how much? | Yes. Your price can change if there are changes in TDU charges, changes to the Electric Reliability Council of Texas or Texas Regional Entity administrative fees charged to loads; or changes resulting from federal, state or local laws or regulatory actions that impose new or modified fees or costs that are outside our control. | |
| What other fees may I be charged? | For full list of fees , please see the “Pricing and Fees” section of your Terms of Service | |
|
Is this a pre-pay in advance product?
|
No, it’s not a prepaid product | |
| Does provider purchase excess distributed renewable generation? | No | |
|
Renewable Content
|
16.40% | |
| Statewide average for Renewable Content | 18.90% |
How to Read an EFL
Now that you know what an Electricity Facts Label is, it’s important to know the meaning of its components. Keep this list handy so you can refer to it while you search for your Texas electricity provider.
1 Average price per kWh:
- First, kWh means kilowatt per hour.
- At the top of the EFL, you’ll see three usage levels: 500 kWh, 1000 kWh, and 2000 kWh.
- The 500 kWh usage level relates mostly to places the size of an apartment or condo.
- Usage of 1000 kWh relates to a small to mid-size home and 2000 kWh relates to a large home.
- The rate you can expect to pay per kWh in a given month is listed under each usage level.
- Don’t forget that these are just guidelines. What you actually pay will depend on how much energy you use monthly. To get the best deal, compare rates from the best electric companies.
2 Base charge:
- Some plans have a base charge that in most cases is a set amount per month regardless of how much energy you use.
- Check the amount in the EFL, because while most base charges range from $5.00 to $10.00, some plans charge huge base charges of over $100!
3 Energy charge:
- In the Electricity Facts Label, you’ll see the rate charged by your electricity provider.
- Your electricity provider sells you energy and bills you, and their name appears on your bills.
4 TDU charge:
- TDU stands for Transmission and Distribution Utility.
- This is the company who manages the power lines, checks your meter and corrects outages.
- About a half dozen companies in Texas provide transmission and distribution of electricity in assigned zones.
- Your electricity provider actually has no influence on the charges that a TDU charges you, as TDUs are regulated entities. Their charges are reflected in your monthly bill sent by the provider.
5 Type of product:
- This is a big one. Make sure you know if it’s a fixed or variable rate plan. If it’s fixed, the provider can’t increase your rate for the term of the contract.
- If it’s variable, the provider can increase the rate, so as you would expect, variable rates are more likely to cause bill surprises.
- Variable rates are often less than fixed rates for the first few months so the provider can advertise a cheap rate.
6 Contract term:
- This is the number of months of your contract.
- Typical contract terms are 12, 24, and 36 months, but there are also partial-year offerings and 60-month terms.
7 Termination fee:
If you terminate the contract before the term is up, you’ll pay an Early Termination Fee (ETF), unless you’re cancelling because you are moving.
8 Pre-pay plans:
Some plans allow you to pre-pay. These plans are usually targeted to consumers with poor credit and the rates are often expensive.
9 Renewable content:
Some plans offer renewable energy incentives. Renewable content tells you the percentage of electricity produced from renewable energy sources associated with your plan. There are low cost solar energy plans in Texas that don’t require solar panels.
Electricity Facts Label Frequently Asked Questions
Why should I use an Electricity Facts Label?
The Electricity Facts Label (EFL), a state-mandated sheet of facts about energy plans, includes the price you’ll pay at monthly usage levels of 500 (apartments and condos), 1000 (smaller houses) and 2000 kWh (larger houses). You can find a plan’s EFL here at Home Energy Club.
It’s important to always match any energy plans you consider to your home’s usage to avoid bill surprises.
An energy plan that’s designed for a large home, for example, may have a low rate of 12 cents/kWh for usage levels of over 2,000 kWh, but a very high rate of 17 cents kWh if you live in an apartment and use 500 to 800 kWh.
Thus, if you live in an apartment and sign up for a plan designed for a 3,000 square foot house, you may pay an extremely high rate versus what you would pay if you chose a plan designed for an apartment that has low rates for usage levels of less than 1000 kWh.
How do I find out my plan’s cancellation fee?
Electric companies charge a cancellation fee (called an Early Termination Fee, or ETF) when customers terminate their energy plan before the end date of the contract.
A typical fee to cancel a 12-month contract early is between $120 to $200. Be wary of ETFs that are higher than $200 for a one-year plan. You’ll find the amount of the early termination fee for any plan you are considering in the Electricity Facts Label in the section called, “Do I have a termination fee?“
It’s important to note that ETFs are generally not charged if you’re moving from your home, though you may need to provide proof that you’re moving out.
How do I determine the price I’ll pay based on kWh usage?
Every electricity plan has a kWh rate, and the Electricity Facts Label displays each plan’s price at different usage levels so you can estimate the plan’s pricing based on your average energy use.
To conveniently view a history of your home’s usage so you can estimate the rate you’ll pay in any given month, go to SmartMeterTexas.com, or you can find your usage in your monthly energy bills. You may wish to read our handy Smart Meter Guide.
With your actual usage information over a 12-month period, you can estimate your future usage, though there’s no precise method for estimating usage due to changes in weather, changes in a home’s energy efficiency and other considerations.
How do I know if I have a fixed electricity rate?
Electric companies offer plans that have fixed rates or variable rates. Fixed-rate plans lock in your rate for the term of the contract (usually 12, 24 or 36 months), and variable rate plans float with the market or can be changed at any time by the electric company.
For more predictable bills, fixed-rate plans are the better choice. To confirm that a plan you’re considering has a fixed rate, open the plan’s EFL in the Plan Details section and scroll down to the section titled “Type of Product”.
What is a TDU in an Electricity Facts Label?
In an Electricity Facts Label, “TDU” stands for Transmission and Distribution Utility, which is the company delivering energy to your home and correcting outages.
The TDU fees in your monthly bill cover the cost of managing power lines, checking meters, correcting outages and other services. TDU fees are always government regulated, and unlike the “energy charge” in your bill, electric companies cannot change them.
You’ll find TDU charges for energy plans in the “TDU Delivery Charges” section of the Electricity Facts Label.
