How To Read An Electricity Facts Label (EFL)
Every Texas electricity plan has an Electricity Facts Label. Understanding it can help you find the right electricity plan and make sure you don’t incur any unexpected costs.
In the ElectricityRates.com Marketplace, you’ll find all of the key information you need to compare rates and get the best deal for every plan. However, if you’d like to know more about reading the Electricity Facts Label, this page will walk you through each section.
- The Electricity Facts Label is a document that gives you a breakdown of charges and terms for an electricity plan in Texas.
- Texas electricity companies are required to disclose all fees and credits in the Electricity Facts Label
- ElectricityRates.com crunches all of the numbers for you and provides you with the best rates so that you shouldn’t need to read the EFL for every plan
What Is An Electricity Facts Label?
The Electricity Facts Label is a standardized document that provides an overview of a Texas electricity plan. Texas electricity companies are required to include an Electricity Facts Label with every plan by the Texas Public Utilities Commission (PUCT)
The EFL Consists of Three Sections:
- Electricity Price
- Other Key Terms and Questions
- Disclosure Chart
Energy Charges and Average Electricity Pricing
The Electricity Price section gives you the average electricity rate at three different usage levels and a breakdown of the charges, fees and credits for the plan. This helps you understand how your usage will affect your electricity rate.
Here are the most common types of charges, fees and credits you will see on an EFL:
If you want to see how to use this information to estimate your electricity bill, check out our post on how your Texas electric bill is calculated.
The energy charge, or energy rate, is the base supply cost of the electricity you use by the kilowatt-hour (kWh). This does not include any bill credits or other discounts that may be included with the electricity rate.
TDU Delivery Charges
TDU charges consist of two charges set by the Public Utility Commission of Texas: A base charge and a rate charge. The base charge is a set dollar amount paid each month no matter your electricity usage. The rate charge is a rate charged by the kilowatt-hour.
Minimum Usage Fee
Some providers charge a minimum usage fee if you don’t use a certain amount of electricity within a given month.
For example, say you have an electricity plan that has a minimum usage fee of $8.99 if you don’t hit 1000 kWh usage within a month. If you only use 750 kWh, your provider will charge you an extra $8.99 on your next bill.
A usage credit is applied to your total bill when you hit a certain level of electricity usage in a month. They lower your total electricity bill and your effective electricity rate.
Many usage credits come into effect at 1,000 kWh. However, some providers apply usage credits at 1,500 kWh or 2,000 kWh. For some electricity plans, usage credits are only applied if you are within a range of electricity usage (for example, between 1,000 kWh and 1,500 kWh).
Other Key Terms and Questions
Other key terms and questions includes any specific details that the electricity company wants you to know about the plan. This includes a full listing of fees, deposit policy when signing up for the plan, and any other important terms.
Electricity Plan Disclosure Chart
The Disclosure Chart section on the Electricity Facts Label gives general information about the electricity plan. Here are some of the most important aspects of this section.
Type of Product
The type of product will tell you whether the plan has a fixed rate, a variable rate or if it is an indexed plan. ElectricityRates.com carries fixed-rate plans because they almost always save you more than variable-rate plans. They also ensure that you don’t have surprise rate hikes that end up costing you more.
Indexed plans have rates that are lower at certain times (usually at night) but higher at others (usually during the day). These plans are only beneficial if you use most of your electricity within the lower-rate time frame. Otherwise, they will cost you more than a regular fixed-rate plan.
This is the length of the plan. It is important to know, but ElectricityRates.com clearly states each plan’s length in The Marketplace. There is no need to find it on the EFL.
Many fixed-rate electricity plans have cancellation fees. If you cancel your plan before the end of the contract, the provider will charge you this dollar amount. Sometimes, cancellation/termination fees will change depending on the amount of time you have left in your contract.
This section tells you what percentage of the plan is sourced from renewable energy. If you want a plan that has 100% renewable energy, ElectricityRates.com has many options for you to choose from. Just look for the 100% Renewable Sources label on the electricity plan.
Learn more about Texas electricity rates here or if you’re ready to compare rates – find the free Rate Comparison Tool at the top of the page and enter your ZIP Code!