Understanding Electricity Facts Labels

Every Texas power plan contains an Electricity Facts Label (EFL). This document outlines important details about your plan, such as your electricity rate, contract length, delivery charges, cancellation fees, provider contact information, and more. Our energy specialists broke down each section of a typical EFL to help you understand the key information.

How to read your plan details

Choose Texas Power conveniently lists the EFL for every plan on our marketplace. You can navigate to an EFL by clicking “more details” and “plan documents.” For this example, we’ll dive into an EFL from Gexa Energy for the Eco Saver Plus 12 plan.

Part 1: Electricity prices

The first part of this EFL details the base costs associated with this plan. Here’s what you need to know:

• Average price per kilowatt-hour (kWh): The EFL provides an average price per kWh, which combines your energy charge, usage credit, and TDU delivery fees. Use this section to get an idea of what you can expect to pay with this plan. Most EFLs also separate pricing by usage tiers — typically 500 kWh, 1,000 kWh, and 2,000 kWh.
• Energy charge: This is a base electricity rate — the amount you’ll pay per kWh.
• Usage credit: Usage credits, also called bill credits, are a discount given on your electricity bill when you reach a certain usage level. The plan in our example rewards a $125 usage credit each month the customer uses more than 1,000 kWh of electricity.
• TDU delivery charges: Your utility company charges a fee to delivery electricity to your home or business, called a Transmission and Distribution Utility (TDU) charge. This is typically assessed in two forms: a base charge per month and a rate per kWh.

Part 2: Disclosure chart

The second part of this EFL is the disclosure chart, which contains additional details for your electricity plan. This section explains the specific details of your plan type, your contract length, cancellation fees, and other features.

• Type of product: This section states the rate type, which is fixed in this case. The electricity rate under a fixed-rate plan remains stable for the duration of your contract, whereas a variable rate changes monthly with the energy market.
• Contract terms: This section provides the contract length of your plan. Most electricity plans range from one to three years. However, our marketplace offers some unique term length options (month-to-month, six, 13, 14, or 18 months).
• Early termination fee (ETF): Most contracts include an ETF, which is a fee you have to pay if you cancel your plan early. However, most Texas providers will waive the fee if you move to an area they don’t service. ETFs vary according to provider and contract length.
• Renewable energy content: This section will tell you what percentage of the plan is renewable. All Texas energy plans include a certain amount of renewable energy — the statewide average is 33%. Providers like Gexa Energy specialize in 100% green options.

Part 3: Provider information

The final part of your EFL contains contact information for your energy provider. Use this information if you have questions about your electric account or monthly bill.

Why reading your EFL matters

Our energy experts highly recommend reviewing an EFL before signing up for a plan. By reading your EFL, you can:

• Determine if the average price fits your budget.
• Discover if your rate is fixed or variable.
• Learn if a usage credit would benefit your typical consumption level.
• Be aware of any additional fees associated with your plan (ETF, delivery fees, etc.).
• Confirm the contract length and decide if this matches your living situation.
• Know how to contact your provider.

Call our team for assistance if you are unsure whether a plan complements your energy needs. We can review your priorities to match you with the best plan and provider.

Use an EFL to estimate your monthly bill

One of the most valuable ways to use an EFL is to estimate your monthly bill before signing up for a plan. Here’s an example of how to calculate potential energy costs.

Formula:

(Energy charge + TDU charge per billing cycle + TDU charge per kWh) – Usage credit = Total bill

Charges according to the Gexa Eco Saver Plus 12 plan:

• Energy charge: 17.67 cents x 1,000 kWh = $176.70
• TDU charge per kWh: 4.2392 cents x 1,000 kWh = $42.39
• TDU delivery charge: $4.90
• Usage credit: $125

Final calculation:

($176.70 + $42.39 + $4.90) – $125 = $98.99

Assuming you use 1,000 kWh of energy per month, your average electricity bill will be around $98.99.

Electricity Facts Label FAQs

What is a TDU charge?

TDU stands for Transmission and Distribution Utility. A TDU charge is a fee from your utility company for delivering electricity to your home or business. These fees are regulated by the Public Utility Commission of Texas (PUCT) to ensure reasonable pricing. TDU charges are updated twice a year, on March 1 and September 1.

Is there a difference between the energy rate and average price?

Yes, these two components of your EFL are different. Your energy rate is the base price you pay per kWh of electricity. The average price is an overall estimate that takes into account delivery charges, usage credits, and your energy rate.

How do usage credits work?

Usage credits are a discount taken from your energy bill if you reach the criteria listed in your contract. In our example from Gexa Energy, the consumer must use at least 1,000 kWh of electricity to receive the $125 credit. Usage credit plans are a great way to lower your energy costs if they match your usage patterns. However, if you don’t meet the requirements, this plan might not be the best fit for you. Carefully review your EFL and consult past electricity bills to determine if you would benefit from a usage credit plan.