How Your Texas Electricity Bill is Calculated
Texas’s deregulated electricity market has given millions of Texans better electricity prices, more options and more control of their electricity. However, all this has also made calculating your Texas electricity bill, and finding the right Texas electricity plan, difficult.
To help, ElectricityRates.com estimates total electricity bills for each plan within The Marketplace. However, manually calculating your bill can really help you find the best plan for your household’s usage. This page is here to guide you through the process, so you can estimate your total electricity bill and effective electricity rate for any plan on ElectricityRates.com.
- ElectricityRates.com’s Marketplace has a built-in electricity bill calculator.
- You must know your average electricity usage to accurately calculate your bill.
- Use the method outlined below to manually estimate your total electricity bill and your electricity rate.
ElectricityRates.com’s Marketplace Estimate
To help you get an idea of your total electricity bill, The ElectricityRates.com Marketplace calculates the total bill for each plan at 500 kilowatt-hours (kWh), 1,000 kWh and 2,000 kWh of electricity consumption.
After you enter your ZIP Code at the top of this page, you can select one of these three usage levels and get the total calculation in the “Plan Details” section. It will also have a breakdown of the calculation so you can see how things like usage credits affect your total electricity bill.
To help you understand what goes into these calculations, and help you find more specific estimates, the rest of this page shows you how to manually calculate your bill.
Why Should You Calculate Your Texas Electricity Bill?
An electricity provider only advertises effective electricity rates at 500 kWh, 1,000 kWh and 2,000 kWh. Things like usage credits and minimum usage fees can influence your effective electricity rate and your total electricity bill.
For example, if a plan has a usage credit at 1,000 kWh, your effective rate could be much higher if you used 999 kWh in a month than it would be if you used 1,000 kWh.
You will see how this works. For now, know that if you want to find the best plan for you, you should use your average electricity usage to find what your effective electricity rate would be for each plan.
Understand Your Household Electricity Use
It’s important to understand your household electricity usage when you’re estimating your electricity bill for any Texas electricity plan. This is because both your total bill and your effective electricity rate can change based on your usage.
ElectricityRates.com suggests looking over your electricity bills from the last 12 months. Find the average kilowatt-hours you consume a month, and take note of which months are higher or lower than usual. This will help you understand how a plan affects your electricity bill at all your usage levels.
To find your average usage, find the total kWh you used in the past year, then divide it by 12.
Moving To Texas and Don’t Know Your Usage?
If you have just moved into a new home, you probably don’t know your electricity usage. There are a few ways you can get around this.
First, you can use estimates based on your home size. It can give you an idea of what you should expect to use.
- Apartments/Small Homes – ~500 kilowatt-hours (kWh)
- Medium-Sized Homes – ~1,000 kWh
- Large Homes – ~2,000 kWh
If you want to get a better idea of how much electricity you will use, ElectricityRates.com suggests asking the original owners, your neighbors or your landlord. These are the people that will be able to give you the most accurate information on how much electricity you should expect to use in a month.
Texas Electricity Bill Charges, Fees and Credits
To estimate your electricity bill and electricity rate, you need to understand the charges, fees and credits that go into your Texas electricity bill. Here are some of the most common:
- Energy Charge – Charge by the kWh for your electricity
- TDU Delivery Charge – Consists of a fixed monthly charge and a rate charge by the kWh.
- Minimum Usage Fee – Charged to your account if you don’t use a minimum amount of electricity within a month.
- Usage Credits – Money put towards your total bill for using a certain amount of electricity within a month.
You can find all this information in the “Plan Details” section, or on a plan’s Electricity Facts Label (EFL). If you want to learn more, check out the guide on how to read an Electricity Facts Label.
Rate Charges and Base Charges
For this calculation, the above charges, fees and credits will be split into two different types of charges: Rate charges and base charges.
Rate Charges – Charges based on your electricity usage by the kilowatt-hour.
- Energy Charge
- TDU Delivery Charge (Rate Charge Only)
Base Charges – Fixed monthly charges
- TDU Delivery Charge (Fixed Charge Only)
- Minimum Usage Fee
- Usage Credits
Texas Electricity Bill Calculation Method
You can calculate your total electricity bill and find the electricity rate for your usage by following these steps and formulas:
1. Calculate the rate charges based on your usage.
Rate Charges = (Energy Charge + TDU Rate Delivery Charge) × Average Monthly Household Electricity Usage
2. Add base charges and minimum usage fees, then subtract usage credits to find your total bill.
Total Bill = Rate Charges + TDU Base Delivery Charge + Minimum Usage Fee – Usage Credits
Note: With this step, you only add your minimum usage fee if your electricity use is below the minimum use threshold. You also only subtract your usage credits if your electricity is above the usage threshold. Check out the sample calculation for an example.
3. Divide your total bill by your usage to get your final rate.
Electricity Rate = Total Bill / Average Monthly Household Electricity Usage
To help you better understand this method, there is an example calculation below.
Now Go Save On Your Texas Electricity Bill!
That’s it! All you have to do now is enter your ZIP Code at the top of this page and get to comparing. From now on, you can use this method to estimate your electricity bill and rate for any electricity plan you are considering, giving you the tools to find a great electricity plan.