Knowing how to read an Electricity Facts Label (EFL) is the key to finding the right electricity plan for your home. It’s easy get pulled in by the advertised rates, showing low prices at a certain usage level. But the EFL shows you the math behind that attractive rate, showing you exactly what to expect from your electricity plan.
Key Takeaways
- The Electricity Facts Label (EFL) is a standardized disclosure that the Public Utility Commission of Texas requires for each electricity plan. It’s similar to a nutrition label on food, designed to help consumers compare plans side by side.
- The EFL shows the average price per kWh for your electricity plan at specific usage levels (500, 1000 and 2000 kWh), plus plan details including the energy price per kWh, current utility delivery rates and any bill credits or additional fees.
- Your actual average price per kWh will be different than the advertised rate, due to your usage and the math in the plan details.
- Electricity Plans calculates your average price per kWh based on your usage, so you know what you’ll actually pay.
What is an EFL?
EFLs are standard disclosures required by the Public Utility Commission of Texas (PUCT) for every electricity plan offered by a Retail Electricity Provider (REP) in Texas. The EFL, along with the Terms of Service and Your Rights as a Customer document, make up your contract for electricity.
Why Should You Read the EFL?
It’s important to read the EFL to cut through the advertised average rates and understand the true cost structure of what you’re buying. Your electricity bill should match the line items you saw on the EFl. If you don’t read the EFL, you may get a big surprise when the bill comes in, if you bought a teaser rate that includes bill credits or tiered rates.
What’s Included in the EFL?
The PUCT standardizes the format and contents for the EFL. It’s similar to a nutrition label on food and designed to let you compare plans side by side. The Electricity Facts Label includes these items:
- Average Price per kilowatt hour (kWh) at specific usage levels, 500, 1000 and 2000 kWh
- Energy Rate – price per kWh for electricity.
- Base Charge – the plan may also have a a base monthly charge or minimum usage fee.
- Bill Credit – some plans include a bill credit for specific usage levels. This can have a big impact on your actual rate per kWh if your usage doesn’t fall into a specific range.
- Delivery Charges – charges from your local utility company. Your utility has a monthly charge and a per kWh charge.
- Contract Length – number of months in your contract agreement
- Type of Plan – fixed, variable or index
- Early Termination Fee – fee that you will pay if you cancel your contract before the end of your contract term.
- Percentage of Renewable Content – the Texas standard
- Contact Information for the Retail Energy Provider
The Pricing Disclosure at the top of the EFL is the section that most people focus on. That will show prices for 500 kWh, 1000 kWh, and 2000 kWh usage levels. These are the average electricity prices per kWh at those usage levels.
The prices listed for 500 kWh, 1000 kWh, and 2000 kWh are not ranges of pricing and they are not your energy rate. These prices are average rates. This is what you’ll pay for electricity plus delivery if you use exactly that much power.
>Read more: for more information, see Why Does Texas Have Three Electricity Rates?
How is the Average Price per kWh Calculated?
Here’s how to calculate your average price per kWh using the electricity facts label:
- Identify the Energy Charge: Locate the energy charge per kWh on the EFL. This is the rate the retail electricity provider charges per unit of power you use.
- Determine the Variable TDU Charge: Find the per kWh charge for delivery from your local transmission and distribution utility company.
- Add the Energy and Variable TDU Charges: Add the energy charge and per kWh TDU charge together. This gives you the combined variable cost per kWh.
- Find the Fixed Monthly Charges: Identify any fixed monthly charges, including any based charge and the TDU charge.
- Divide Fixed Charges by Usage: Divide the total fixed monthly charges (Base Charge + Monthly TDU Charge) by your expected monthly electricity usage in kWh.
- Add the Variable and Divided Fixed Charges: Add the result from step 3 and step 5 together. This will give you the average price per kWh for your specific usage level.
Fixed Rate Plan – EFL Calculation Example
Assume your fixed rate EFL shows the following elements:
- Energy Charge: $0.08 per kWh
- TDU Delivery Charge: $0.044608 per kWh
- REP Base Charge: $4.95
- TDU Monthly Fee: $4.90
The calculation for average price per kWh assuming 1000 kWh in a month:
- Variable cost: $0.08 energy cost + $0.044608 delivery cost = $0.125 per kWh
- Fixed cost: $4.95 REP base charge + $4.90 TDU monthly fee = $9.85
- Fixed cost per kWh: $9.85/1000 kWh = $0.00985 per kWh
- Average cost per kWh: $0.125 + $0.00985 = $0.135 per kWh
- Estimated bill: $0.135 * 1000 = $135 (plus taxes and fees)
Bill Credit Plan – EFL Calculation Example
Assume your fixed rate EFL shows the following elements:
- Energy Charge: $0.14 per kWh
- TDU Delivery Charge: $0.044608 per kWh
- TDU Monthly Fee: $4.90
- REP Base Charge: $4.95
- Usage Credit: $100 bill credit in months where you use 1000 kWh or more.
The calculation for average price per kWh assuming 1000 kWh in a month:
- Variable cost: $0.14 energy cost + $0.044608 delivery cost = $0.18.5 per kWh
- Fixed cost: $4.95 REP base charge + $4.90 TDU monthly fee = $9.85
- Fixed cost per kWh: $9.85/1000 kWh = $0.00985 per kWh
- Cost per kWh: $0.185 + $.00985 = $0.1945
- Estimated bill: $0.1945 * 1000 = $194.46 (plus taxes and fees)
- After bill credit: $194.46 – $100 = $94.46
- Average cost per kWh: $0.095
Looks great. But if you use 1400 kWh in a month, your average jumps to $0.123.
The reality is, most people don’t enjoy running the numbers. That’s why ElectricityPlans.com does the math for you.
How ElectricityPlans Makes EFL Math Easy
We don’t expect you to be an EFL expert. After all, math like this can get pretty complicated. The tools on ElectricityPlans help you understand your plan options and what you will pay.
- Shop based on electricity usage: Enter your average usage to see your accurate rate and estimated bill with each plan.
- Plan details: We clearly outline the components of the EFL and how your bill will be calculated.
- Electricity bill calculator: Enter any usage in the plan details. We’ll calculate the average price and estimated bill for that plan.
And our biggest piece of advice, based on reviewing thousands of electricity bills? The best plan for your home is likely basic fixed rate plans. Simple math and an average price that stays relatively consistent no matter how much power you use.
Compare Electricity Rates Near Me
Frequently Asked Questions About EFLs
The energy rate is the price you pay per kilowatt hour for your electricity.
The average price is the price for electricity, delivery and fees that you will pay based on a specific usage level. This average price lets you compare how much you will pay for each electricity plan you are looking at, whether it’s bundled, unbundled, tiered rate or flat fee.
Some common hidden fees in Texas electricity plans include: paper billing fees (check if the plan calculation assumes a discount for e-bill); bill payment option fees (check if the plan calculation assumes automatic payment; base charges or minimum use fees (which can have a big impact on your bill if you have low usage); bill credits (which will impact your average price per kWh depending on usage). All of these items are disclosed on the Electricity Facts Label.
When you get your first Texas electricity bill from your new provider, you should pull out the Electricity Facts Label to check the calculation.
You receive the EFL document when you sign up for an electricity plan (check your emails for a copy of this document.) The EFL shows the energy rate, delivery rate, and any additional fees, and how your bill should be calculated. If your bill doesn’t match the calculation in the EFL, or if it’s not what you were expecting, contact your Retail Electricity Provider.
Most retailers will let you switch to a different electricity plan if it’s not the right fit for you. Some even offer a satisfaction guarantee.
For some retail electricity providers in Texas, the energy charge includes delivery (bundled rate). For most retail electricity providers in Texas, the energy charge and delivery charge are separate (unbundled rate). Regardless of whether you are quoted a bundled or unbundled rate, your electricity provider will pass through any changes in the delivery fees. If you have a bundled rate, you’ll see these as additional line items on your bill, passed through as changes in law or regulation. Delivery fees typically change twice a year.
