Every Texas plan has three parts

  1. Energy charge. Per kWh. This is what your REP (TXU, Reliant, whoever) actually sells you. It's what they advertise, though usually at a specific usage level.
  2. TDU delivery charge. Also per kWh. This goes to the wires company — Oncor, CenterPoint, AEP, TNMP. Set by the PUC. Same on every plan in your area. Pass-through.
  3. Base charge. Flat monthly fee. Can come from the REP, the TDU, or both. Applies whether you use 0 kWh or 3,000.

Your total bill = (energy + TDU delivery) × your kWh + base charges + taxes.

Why the advertised rate rarely matches your bill

Providers advertise a headline rate at 1,000 or 2,000 kWh. That rate is engineered to look good at that specific number. Here are the three tricks they use:

Bill credits. The plan charges a high per-kWh rate, then credits you $50 or $100 when you hit 1,000 or 2,000 kWh. At exactly the threshold the rate looks great. At 900 kWh the credit disappears and you pay the high rate on every kWh. Typical Texas home in a mild month: 850-950 kWh. You see where this goes.

Tiered pricing. Different price for the first 500 kWh vs. the next 1,500 vs. anything over 2,000. The advertised rate is the weighted average at the "featured" usage level — usually the level where the tiers happen to blend most favorably.

Minimum usage fees. $5-10 surcharge if you use less than 1,000 kWh. A spring or fall month where you just didn't run the AC much? Congrats, extra fee.

Fixed vs. variable rate

Fixed-rate plan: the energy charge is locked for the term of the contract (6, 12, 24, 36 months). Your per-kWh rate doesn't change if the wholesale market spikes. During the 2021 freeze, some variable-rate customers got $10,000+ single-month bills. Fixed-rate customers didn't.

Variable-rate plan: the rate can change month to month. No cancellation fee. More flexibility. More risk.

Most Texans are better off on fixed. Variable makes sense if you're moving in 30-60 days or you really like rolling the dice.

How to actually compare plans

Ignore the advertised rate. Ask one question: at your home's real usage, what's the total monthly bill?

The legally required answer lives on a document called the Electricity Facts Label (EFL), which every plan must publish. It shows the effective rate at 500, 1,000, and 2,000 kWh. If your usage is close to one of those three numbers, you can use the EFL number directly. If it's in between, you interpolate — or you let a comparison tool do the math.

The whole point of this site: do the math for you, at your actual usage, across every plan in your area.