Texas Electricity: 500 vs 1000 vs 2000 kWh Rates Compared

Every Texas electricity plan displays prices at three usage levels: 500 kWh, 1,000 kWh, and 2,000 kWh. The Public Utility Commission requires this so you can see how pricing changes with consumption.

The problem: Most people glance at the 1,000 kWh rate and assume that's what they'll pay. But Texas electricity pricing isn't that simple.

Your actual rate depends entirely on how much electricity you use each month. Use 700 kWh? Your rate falls somewhere between the 500 and 1,000 kWh numbers—but it's not a simple average.

Why it matters: Pick a plan optimized for the wrong usage level and you could pay 30-50% more than the advertised rate. That's $300-500 per year wasted.^[1]

The three benchmarks represent different types of Texas households. Find yourself in this table:

Texas reality check: The average Texas home uses about 1,100-1,200 kWh per month—higher than the national average because of brutal summers. But this average hides huge variation:

- April-May: 600-800 kWh (mild weather, windows open)
- July-August: 2,000-3,000 kWh (AC running 24/7)
- December-January: 800-1,200 kWh (heating, holiday lights)

If you're an "average" user overall, you might be a low user in spring and a high user in summer. One rate doesn't fit all months.

Before comparing plans, you need real numbers. Here's how to find them.

Method 1: Check your electric bills
Pull your last 12 months of bills. Write down each month's kWh. You need:
- Your lowest month (probably April or October)
- Your highest month (probably July or August)
- Your yearly average (add all 12, divide by 12)

Method 2: Smart Meter Texas
Log into SmartMeterTexas.com with your ESI ID. You'll see:
- Daily usage graphs
- 15-minute interval data
- Full history since your meter was installed

Method 3: Your TDU's portal
Oncor, CenterPoint, and AEP Texas all have customer portals showing usage history. Search "[your TDU] usage portal" to find yours.

What to do with your numbers:

Pro tip: If your usage swings wildly (600 kWh in April, 2,500 kWh in August), look for plans with consistent pricing across all three levels. You'll pay a bit more in some months but avoid nasty surprises.

Here's the secret most Texans don't know: the gap between rates reveals how the plan is structured.

Scenario 1: Small gaps between levels

What this means: Straightforward pricing. The small difference comes from fixed monthly charges being spread over more kWh. Good for variable usage.

Scenario 2: Huge gap at 1,000 kWh

What this means: Usage credit plan. There's a $50-100 bill credit that kicks in at 1,000 kWh. Miss that threshold by even 1 kWh and you pay the 500 kWh rate. Dangerous for variable users.

The Reddit test: If the 500 kWh rate is more than 4¢ higher than the 1,000 kWh rate, the plan has aggressive usage credits. Avoid unless you consistently use 1,000+ kWh every single month.

Usage credits are the #1 reason your bill doesn't match the advertised rate. Understanding them is essential.

How usage credits work:
1. Plan has a base energy rate (say, 12¢/kWh)
2. If you use more than X kWh (usually 1,000), you get a $50-100 credit
3. That credit drops your effective rate dramatically
4. Miss the threshold? Full price, no credit.

Real example:

See the cliff? At 900 kWh you pay 15.6¢. Use just 100 kWh more and you pay 8.0¢. That 100 kWh difference costs you $60.

Who wins with usage credits:
- Large homes that consistently exceed the threshold
- Summer months when AC pushes everyone over 1,000 kWh
- People willing to track usage and adjust behavior

Who loses:
- Apartments and small homes
- Mild weather months (spring/fall)
- Anyone with unpredictable usage

Your electricity usage isn't static. Smart shoppers think about the whole year.

Typical Texas usage pattern:

The math that matters:
Summer is 4 months but often 60% of your annual electricity cost. A plan that's 2¢/kWh cheaper at 2,000 kWh saves you $160 in summer alone—even if it's slightly worse in spring.

Two approaches:

Option A: Optimize for summer
Pick a plan with the best 2,000 kWh rate. Accept you'll overpay slightly in mild months. Best for: Large homes, heavy AC users.

Option B: Consistent pricing
Pick a plan where all three rates are within 2¢ of each other. You won't get the absolute best summer rate, but you'll never get gouged in spring. Best for: Apartments, variable schedules, mild-weather lovers.

Now let's put this into practice. Here's the step-by-step comparison process.

Step 1: Calculate your usage profile
From your bills, find:
- Spring average (Mar-May): ___ kWh
- Summer average (Jun-Sep): ___ kWh
- Fall average (Oct-Nov): ___ kWh
- Winter average (Dec-Feb): ___ kWh

Step 2: Weight by season length
- Spring: 3 months
- Summer: 4 months
- Fall: 2 months
- Winter: 3 months

Step 3: Compare plans at YOUR levels

Analysis:
- Plan A: Best for high users (2,000 kWh), terrible for low users (14.5¢!)
- Plan B: Most consistent—good for variable usage
- Plan C: Worst at all levels (eliminate it)

Step 4: Calculate annual cost
Using Plan A with spring=600, summer=2000, fall=700, winter=1000 kWh:
- Spring: 3 × 600 × $0.145 = $261
- Summer: 4 × 2000 × $0.078 = $624
- Fall: 2 × 700 × $0.145 = $203
- Winter: 3 × 1000 × $0.092 = $276
- Annual: $1,364

Run the same math for Plan B to compare.

Avoid these traps that cost Texans hundreds every year.

Mistake #1: Only looking at 1,000 kWh
The 1,000 kWh rate is marketing bait. Plans compete for that number because it's what most people check. Always look at all three.

Mistake #2: Ignoring your actual usage
"I probably use about average" is a guess that costs money. Check your real bills. You might be surprised.

Mistake #3: Forgetting seasonal variation
Your April bill (600 kWh) and August bill (2,400 kWh) need different rate considerations. A plan great for summer might gouge you in spring.

Mistake #4: Chasing the lowest 2,000 kWh rate
Plans with rock-bottom 2,000 kWh rates often have sky-high 500 kWh rates. If your AC breaks or you take a vacation, you'll pay the penalty.

Mistake #5: Not recalculating when life changes
Got a new EV? Added a home office? Your usage profile changed. Time to re-shop.

The smart approach:
Calculate your expected annual cost using actual usage patterns, not just the benchmark rate. A plan that's 1¢/kWh worse at 1,000 kWh but 3¢ better at 2,000 kWh might save you $200/year if you're a heavy summer user.

Some situations need different strategies.

Apartments and small homes
You'll rarely hit 1,000 kWh. Focus exclusively on the 500 kWh rate. Avoid any plan with usage credits—you'll almost never qualify.

Best plan type: Simple fixed rate with no credits, even if the 1,000 kWh rate looks higher.

Solar homeowners
Your net usage after solar might be 200-400 kWh. Standard rate comparisons don't apply. You need:
- Low 500 kWh rate (for what you pull from grid)
- Good solar buyback rate (for what you export)
- No minimum usage requirements

Watch out: Some "Free Nights" plans exclude solar customers entirely.

EV owners
An EV adds 300-500 kWh/month to your usage. If you were at 800 kWh, you're now at 1,200 kWh. This might actually help you qualify for usage credits you couldn't hit before.

Consider: Time-of-use plans where overnight charging is cheap. The 500/1000/2000 comparison matters less when you can shift your EV charging to off-peak hours.

Home offices
Working from home adds 100-200 kWh/month from computers, monitors, and more AC during the day. Recalculate your usage profile if you recently went remote.

Here's the truth: you don't need to master EFL math or figure out which benchmark matters. We connect to your smart meter and do it for you.

The ElectricRates.org difference:
Power to Choose shows you rates at 500, 1,000, and 2,000 kWh. That's it. If you use 847 kWh or 1,237 kWh, you're left guessing.

We built something better. Our Texas comparison tool connects directly to Smart Meter Texas, pulls your actual usage history, and calculates your exact cost for every plan.

Same plans. Personalized prices.

How it works:
1. Enter your ZIP code and click "See Your Personalized Rates"
2. We connect to your smart meter to pull your real usage—not estimates
3. Every plan is re-priced based on YOUR actual consumption pattern
4. See exactly what you'd pay, ranked from cheapest to most expensive

No more wondering if you should look at the 500 or 1,000 kWh column. No more getting burned by usage credits you didn't hit. We flatten every EFL and show what you'll actually pay based on how you actually use electricity.

Why this matters:

A plan that looks expensive at the 1,000 kWh benchmark might actually be cheapest for your usage pattern. You'd never know from Power to Choose. See your personalized rates →

Here's exactly what to do next.

The fast way (2 minutes):
1. Grab a recent electric bill—find your kWh usage
2. Go to ElectricRates.org/texas
3. Enter your ZIP and your actual kWh
4. We show you every plan ranked by your real cost—done

That's it. We do the EFL math for you. No benchmarks, no guessing.

If you want to go deeper:
1. Check Smart Meter Texas for your 12-month usage history
2. Note your summer high and spring low
3. Compare plans at both extremes on our tool
4. Pick a plan that works for your full range

Before you enroll:
1. Verify the contract length fits your timeline
2. Check the early termination fee (usually $75-200)
3. Confirm there are no surprises in the Terms of Service

Set a reminder:
Mark your calendar for 30 days before your contract ends. Rates change constantly. The best plan today might not be the best plan in 12 months.

The bottom line:
You don't need to become an EFL expert. Our tool calculates your exact cost at any usage level—not just 500, 1,000, or 2,000 kWh. Enter your real numbers and see what you'll actually pay.