Each electricity product offered by a Retail Electric Provider (REP) in Texas's competitive electricity market has an Electricity Facts Label that explains how the plan works. It typically shows the average price per kWh at 500, 1,000, and 2,000 kWh, along with contract terms, fees, renewable energy information, and other important details.
Learning how to read an Electricity Facts Label can help you look beyond the headline electricity rate and compare Texas electricity plans based on what you may actually pay.
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What Is an Electricity Facts Label (EFL)?
An Electricity Facts Label, commonly called an EFL, is a standardized disclosure document for an electricity product. Think of it as a nutrition label for an electricity plan: it organizes important pricing and contract information in a consistent format so shoppers can evaluate different options more easily.
An EFL can include:
- Average electricity prices at different usage levels
- Energy charges
- Recurring fees
- Contract length
- Early termination fees
- Whether the product is fixed or variable rate
- Renewable energy content
- Other important pricing conditions
Under the official Texas electricity disclosure requirements, electricity products must provide standardized pricing and product information to customers.
Instead of choosing a plan based solely on an advertised per-kWh electricity rate, review its EFL to understand how the entire pricing structure works.
How to Read the 500, 1,000 and 2,000 kWh Prices
One of the first sections to review on a Texas Electricity Facts Label is the average-price table. Residential EFLs show pricing at three standardized electricity usage levels.
500 kWh
This represents relatively low electricity consumption and may be closer to the monthly usage of some apartments, smaller homes, or households during mild-weather months.
1,000 kWh
This is a common comparison point for Texas electricity rates and is frequently highlighted when electricity plans are advertised.
2,000 kWh
This represents heavier electricity consumption, which may occur in larger homes or during high-demand summer months when air-conditioning use increases.
The important point is that your home probably will not use exactly 500, 1,000, or 2,000 kWh every month.
Your usage could be 700 kWh one month, 950 kWh the next, and 1,600 kWh during summer. Therefore, the lowest advertised rate at one benchmark does not necessarily mean the plan will be cheapest for your household.
When comparing electricity plans, review your previous electricity bills and compare the EFL against your actual usage pattern.
Energy Charge vs. Average Price per kWh
The energy charge and the average price per kWh are related, but they are not necessarily the same.
The energy charge is generally the per-kWh component of the electricity supply charge under the plan.
The average price per kWh shown at a specific usage level reflects how applicable recurring components of the pricing structure affect the average cost at that level. Depending on the plan, these may include delivery charges, monthly charges, usage-based charges, or qualifying bill credits.
For example, a plan may advertise an attractive energy charge but yield a noticeably different average price once other recurring charges are factored in.
Electricity costs can also vary due to several
, including generation costs, transmission and distribution expenses, weather, demand, and local market conditions.
When comparing Texas electricity plans, do not look only at the energy charge. Compare the average price at usage levels close to your historical consumption and review how that average price is calculated.
Check TDU Delivery Charges and Monthly Fees
Your Retail Electric Provider sells and bills you for the electricity plan, while the local Transmission and Distribution Utility, or TDU, operates the infrastructure that delivers electricity to your property.
TDU delivery charges commonly include a usage-based charge and may also include a recurring monthly component. Applicable recurring delivery charges are generally reflected in the EFL's average price calculations, although certain special charges may be treated differently.
You should also check whether the electricity plan includes:
- A provider base charge
- Monthly service fees
- Minimum usage fees
- Other recurring charges
A small monthly electricity base charge can make a noticeable difference for a low-usage household. This is another reason to compare the complete pricing formula rather than focusing only on the advertised cents-per-kWh figure.
Watch for Bill Credits and Usage Thresholds
Electricity bill credits can significantly change the effective cost of a plan.
For example, imagine a plan provides a $100 bill credit when monthly electricity consumption reaches 1,000 kWh.
If the eligibility condition works as a minimum threshold:
999 kWh: You may not receive the credit.
1,000 kWh: You may qualify for the $100 credit.
That small difference in usage could create a major difference in your final bill.
Some electricity plans may use bill credits, minimum usage requirements, tiered pricing, or narrow qualifying ranges to produce especially attractive average rates at certain consumption levels.
how bill credits and usage thresholds affect your actual electricity cost
can help you determine whether a plan fits your actual consumption pattern.
Before enrolling, check exactly when a credit starts, whether it ends above another threshold, and what your electricity cost looks like when you do not qualify for it.
Review the Contract Term and Early Termination Fee
Price is only part of an EFL. You should also review the product type and contract conditions.A fixed-rate electricity plan generally keeps the provider's pricing structure more stable during the contract term, although certain regulated or pass-through charges may still change when permitted.A variable-rate electricity plan may allow pricing to change according to the product's disclosed terms.
Also check:
- Contract length
- Minimum service term
- Early termination fee
- Pricing-change disclosures
- Renewal or expiration conditions
An attractive electricity rate may not be the right choice if the contract does not align with your expected length of stay or if a high early termination fee would make switching costly.
Does the EFL Matter for Prepaid Electricity Plans?
Yes. If you are considering a prepaid electricity plan, pricing disclosures are still important.
Prepaid electricity may appeal to customers who want to avoid a traditional deposit or credit screening, but "no deposit" does not automatically mean "lowest total cost."
Review the plan's per-kWh pricing, applicable charges, account-balance requirements, and other disclosed terms before enrolling.
If avoiding a traditional deposit or credit screening is important to you, learn how prepaid electricity with no credit check
works before comparing prepaid options.
This allows you to compare convenience and the potential overall electricity cost.
Quick EFL Checklist Before Choosing a Texas Electricity Plan
Before enrolling in a Texas electricity plan, check the EFL for:
- Average price at 500 kWh
- Average price at 1,000 kWh
- Average price at 2,000 kWh
- Energy charge per kWh
- TDU delivery charges
- Monthly or base charges
- Electricity bill credits
- Minimum usage requirements
- Usage thresholds
- Fixed-rate or variable-rate structure
- Contract length
- Early termination fee
- Renewable energy content
- EFL effective date or version
Most importantly, compare these terms with your historical electricity consumption rather than selecting a plan solely because it offers the lowest advertised rate.
Final Takeaway
Learning how to read an EFL in Texas makes it easier to understand what is behind an advertised electricity rate.
Start with the 500, 1,000, and 2,000 kWh prices, then review the energy charge, TDU delivery charges, monthly fees, bill credits, usage thresholds, contract terms, and early termination fee.
The best electricity plan is not necessarily the one with the lowest headline price; it is the one whose pricing structure works well with your actual electricity usage.
After reviewing the EFL, shoppers can use 97 Options to compare electricity plans available for their ZIP code and evaluate options based on their expected consumption.
