How to Read Your Electricity Facts Label

What Is an EFL?

Think of the Electricity Facts Label like the nutrition label on food. It’s a standardized, one-page document that every Texas electricity plan is required to have, mandated by the Public Utility Commission of Texas (PUCT). The point is to make it easier to compare plans side by side.

Every EFL follows the same format and includes the same information: the rate at three benchmark levels, the contract term, fees, renewable energy content, and other disclosures. Providers can’t hide information or present it in a misleading layout — at least not on the EFL itself.

The problem isn’t the EFL. It’s that most people never look at it. They see a rate on an ad, assume that’s what they’ll pay, and sign up. The EFL tells a more complete (and sometimes very different) story.

The Three Rates (and Which One Matters)

The most prominent feature of any EFL is three rates shown at three levels: 500 kWh, 1,000 kWh, and 2,000 kWh. These represent what you’d pay per kilowatt-hour if your home used exactly that amount in a month.

Here’s why they’re different: base charges, bill credits, and tiered pricing all change the math at different levels. A $4.95 monthly base charge adds about 1 cent per kWh at 500 kWh but only 0.25 cents at 2,000 kWh. A $75 bill credit that kicks in at 1,000 kWh doesn’t exist at 500 kWh. The per-kWh rate isn’t a single number — it shifts depending on how much electricity flows through your meter.

Providers almost always advertise the 2,000 kWh rate because it’s the lowest. But the average Texas home uses about 1,200 kWh per month. That means most people’s actual rate is closer to the 1,000 kWh number.

Here’s a concrete example. A plan might show:

• 500 kWh: 16.2 cents/kWh
• 1,000 kWh: 12.1 cents/kWh
• 2,000 kWh: 8.5 cents/kWh

That 8.5 cents looks great in an ad. But if your home uses 1,000 kWh, you’re paying 12.1 cents. That’s the difference between a $85 energy charge and a $121 energy charge — about $36 more per month than you’d expect from the advertised rate. Over a 12-month contract, that’s $432 you didn’t see coming.

The rate that matters is the one closest to how much your home actually uses. Check your past bills. If you don’t have Texas bills yet, start with the 1,000 kWh rate as your baseline.

Base Charges and How They Hide

Most plans include a monthly base charge, sometimes called a “customer charge” or “minimum charge.” It’s a flat fee — typically $4.95 to $9.95 — that you pay regardless of how much electricity your home uses.

On the EFL, this charge is baked into the per-kWh rates at each benchmark level. You won’t see a separate line for it in the rate table. But it’s listed in the plan details below.

Here’s why base charges matter more than they look. A $9.95 base charge on a plan with a 7-cent energy rate works out to:

• At 500 kWh: 9.0 cents/kWh effective rate
• At 1,000 kWh: 8.0 cents/kWh effective rate
• At 2,000 kWh: 7.5 cents/kWh effective rate

A competing plan with no base charge and a 7.8-cent energy rate is cheaper for anyone using less than about 1,300 kWh. Above that, the first plan wins. Neither plan is objectively “better” — it depends entirely on your home.

This is exactly the kind of detail the EFL reveals if you take the time to read it.

Bill Credits — The Fine Print That Changes Everything

Bill credits are the most powerful pricing tool providers use, and the most misunderstood by shoppers.

Here’s how they work. A plan might include a $75 bill credit that applies when your home uses 1,000 kWh or more in a billing cycle. That $75 gets subtracted from your total bill, dramatically lowering the effective per-kWh rate at and above 1,000 kWh.

But it creates a cliff. If you use 1,000 kWh, you get the credit. If you use 999 kWh, you don’t. Your bill for 999 kWh could actually be higher than your bill for 1,000 kWh.

On the EFL, bill credits are reflected in the rate at the qualifying benchmark levels but not at levels below the threshold. That’s why you might see a huge gap between the 500 kWh rate and the 1,000 kWh rate — the credit only kicks in at 1,000.

Some plans stack multiple credits at different tiers (say, $25 at 1,000 kWh and another $50 at 2,000 kWh). These plans look incredible at 2,000 kWh and mediocre everywhere else.

Bill credits aren’t inherently bad. If your home consistently uses well above the threshold — say 1,400+ kWh when the credit kicks in at 1,000 — you’ll reliably get the credit and the effective rate is genuinely low. But if you’re near the edge, you’re rolling the dice every month. A mild spring week or a vacation could push you below the threshold and send your bill in the wrong direction.

The EFL shows you exactly where the credits apply. Read the fine print section and look for language about “bill credits,” “energy credits,” or “recurring credits.”

Other Fees to Look For

Beyond the base charge and energy rate, the EFL discloses several other fees that affect your total cost.

Early termination fee (ETF). If you cancel a fixed-rate contract before it ends, you’ll pay this fee. Most are $100-200, though some plans have no ETF at all. The EFL will list the exact amount. A $150 ETF on a 12-month contract isn’t a dealbreaker if the plan saves you real money — but you should know it’s there.

Minimum consumption fee. Some plans charge an extra fee if your home uses below a certain threshold in a month. This is less common but worth checking, especially if you have a small home or travel frequently.

TDU delivery charges. These are pass-through charges from your local utility (TDU) for delivering electricity. Every plan includes them — they’re the same regardless of which provider you choose. The EFL includes TDU charges in the per-kWh rates, so they’re already baked into the numbers you see. But it’s worth knowing they’re there: typically $3.42-$5.25 per month in fixed charges plus about 3.5-4 cents per kWh.

Late payment fees. Most providers charge $5-15 for late payments. The EFL discloses this.

What the EFL Doesn’t Show

The EFL is the best tool available for comparing plans, but it has limitations.

It only shows three snapshots. You get rates at 500, 1,000, and 2,000 kWh. If your home uses 750 or 1,400 kWh, you’re interpolating. That’s one reason tools like ChooseMyPower.org exist — they calculate the rate at your specific level so you can compare plans accurately.

It doesn’t show a dollar estimate. The EFL gives you cents per kWh, not “your bill will be $X.” You have to do the multiplication yourself (or use a comparison tool that does it for you).

It doesn’t compare for you. An EFL is great for understanding one plan. But when you’re looking at 50 plans in your ZIP code, reading 50 EFLs isn’t realistic. Use the EFL to verify the details of a plan you’re considering, and use a comparison tool to narrow down the list.

It doesn’t predict the future. For variable-rate plans, the EFL shows the current month’s rate. Next month could be completely different. Fixed-rate plans are what they say on the EFL for the entire contract term.

The EFL is your single source of truth for any Texas electricity plan. Learn to read it, and no provider can surprise you.