How to Read a Texas Electricity Facts Label (EFL)

An Electricity Facts Label, or EFL, is one of the most important documents to review before choosing a Texas electricity plan. It shows how a plan is priced, including the energy charge, utility delivery charges, recurring fees, bill credits, contract terms, and other details that can affect what you actually pay.

What is an Electricity Facts Label?

The Electricity Facts Label is a standardized document that Texas electricity providers must provide for each plan. Think of it like a nutrition label for electricity: it gives you a consistent way to see the plan’s pricing, fees, contract terms, and other important details before you enroll.

Why the EFL Matters More Than the Advertised Rate

The advertised rate you see for an electricity plan does not always tell you what the plan will cost at your actual usage. Many Texas plans use bill credits, minimum usage fees, tiered pricing, or other pricing structures that can make the effective rate change significantly depending on how much electricity you use.

The Key Parts of an Electricity Facts Label

Average Price per Kilowatt-Hour

Near the top of an EFL, you'll usually see average prices at 500, 1,000, and 2,000 kWh. These numbers are useful reference points, but they are not necessarily the rate you will pay at your exact usage.

The average price includes the charges used to calculate the bill at each listed usage level. Because some plans include fixed fees, bill credits, or other usage-based pricing, the average price can change significantly between 500, 1,000, and 2,000 kWh.

Energy Charge

The energy charge is the amount the electricity provider charges for the electricity you use, typically expressed in cents per kilowatt-hour (¢/kWh).

Do not assume the energy charge alone represents your total electricity rate. Your bill may also include utility delivery charges, monthly fees, credits, and other costs shown on the EFL.

Utility Delivery Charges

Your local transmission and distribution utility, often called a TDU or TDSP, delivers electricity to your home and maintains the poles, wires, and other infrastructure.

Delivery charges may include a monthly fixed charge and a charge based on the number of kilowatt-hours you use. These charges are an important part of your total bill and should be included when comparing plans.

Bill Credits and Usage Thresholds

Bill-credit plans can look inexpensive at certain usage levels because a credit is applied when your consumption falls within a specific range or reaches a particular threshold.

The problem is that your bill can increase sharply when your usage falls outside the range needed to receive the credit. This is why comparing a plan using your own expected electricity usage is more useful than looking at a single advertised rate.

Base Charges and Recurring Fees

Some electricity plans include a fixed monthly charge in addition to usage-based charges. Even a relatively small monthly fee can increase the effective rate for homes that use less electricity.

Contract Term

The EFL identifies the length of the electricity contract. Common terms include month-to-month plans and fixed-term contracts lasting 12, 24, or 36 months.

A longer contract can provide price stability, but you should also review the cancellation terms before enrolling.

Early Termination Fee

Many fixed-term electricity plans charge an early termination fee if you cancel before the contract ends. The EFL should disclose the amount or explain how the fee is calculated.

Renewable Energy Content

The EFL also shows the percentage of electricity represented by renewable energy sources. This allows you to compare the renewable content of different plans.

Why 500, 1,000, and 2,000 kWh Can Be Misleading

Texas EFLs commonly show average prices at three usage levels: 500, 1,000, and 2,000 kWh. Those benchmarks make plans easier to compare, but your home probably does not use exactly one of those amounts every month.

For example, a plan that looks inexpensive at 1,000 kWh because of a bill credit could become considerably more expensive at 900 kWh or 1,200 kWh.

Your electricity usage also changes throughout the year. A Texas home may consume substantially more electricity during hot summer months because of air conditioning.

That means the best plan at one usage level may not be the best plan across your actual usage pattern.

How to Compare Electricity Plans Using an EFL

When comparing plans, look beyond the advertised average price. Review the energy charge, utility delivery charges, monthly fees, bill credits, usage requirements, contract length, and early termination fee.

Then estimate what each plan would cost at the amount of electricity your home actually uses.

TrueRate is designed around this idea: instead of relying only on the standard 500, 1,000, and 2,000 kWh benchmarks, plan comparisons can account for your expected usage to provide a more meaningful estimate of what you may actually pay.

The Bottom Line

An Electricity Facts Label is one of the best tools available for understanding a Texas electricity plan before enrolling.

The most important thing to remember is that the advertised rate does not tell the whole story. Read the EFL, understand how every charge and credit works, and compare plans based on your own electricity usage rather than a single benchmark rate.