The $125 Bill Credit That Costs Apartments $383 a Year

You sign up for a Texas electricity plan marketed at 7.8 cents per kilowatt-hour. The first bill arrives. You used 412 kWh in a mild Fort Worth April. The energy charge works out to about 20.6 cents per kWh — almost three times the rate that closed the sale.

You didn't get cheated by a rogue provider. You hit the most common pricing structure on Power to Choose: a bill-credit plan. The 7.8¢ headline assumes you use exactly 1,000 kWh in a billing cycle. Apartments rarely hit that number. The math the marketing depends on doesn't work for you.

Across twelve months, that gap is about $383. On the cheapest-looking plan in the list.

Every Texas retail electricity provider publishes an Electricity Facts Label, the EFL, for each plan. The Public Utility Commission of Texas requires it. The EFL spells out three numbers most shoppers never read: the underlying energy charge, the TDU delivery pass-through, and any bill-credit threshold.

For a typical bill-credit plan, the underlying energy charge is something like 14.139¢/kWh. The TDU delivery adds another ~5-6¢ depending on the utility. Add base charges. Net price at 1,000 kWh of usage: roughly 20.6¢/kWh — before any credit.

Then the credit fires. A $125 bill credit applied at exactly 1,000 kWh subtracts 12.5¢ off every kWh, dragging the displayed average down to ~7.8¢. That's the number Power to Choose puts in front of you.

At 999 kWh the credit doesn't fire. At 412 kWh the credit doesn't fire. The underlying 20.6¢ runs the bill. The "cheap" plan isn't cheap; it's a discount for high-usage households disguised as a low rate for everyone.

The numbers below come from the ElectricRates.org 5-profile validation set: five representative Texas usage shapes run against every live plan in Oncor ZIP 76118. The apartment profile averages 400 kWh/month with a summer peak around 510 kWh — typical for a 700 sq ft unit on the AC-light side.

Plan A — APGE SimpleSaver 13. Marketed at 7.8¢/kWh on Power to Choose. Underlying energy charge 14.139¢ plus TDU. $125 bill credit at 1,000+ kWh.

• At 400 kWh: credit never fires. Effective rate ≈ 20.6¢/kWh.
• Average monthly bill at 400 kWh: about $85.
• Annual cost: about $1,028.

Plan B — Just Energy Simple Value 24. Marketed at 17.6¢/kWh. No bill credit. Flat structure.

• At 400 kWh: effective rate ≈ 13.4¢/kWh (smaller monthly base spreads cleaner at low usage).
• Average monthly bill at 400 kWh: about $54.
• Annual cost: about $645.

$1,028 minus $645 = $383.

The plan with the lower headline rate costs $383 more a year. On the same utility, at the same address, with the same meter.

This isn't an outlier. In the validation set against 76118 plans, at least six bill-credit products — APGE SimpleSaver 13, Rhythm Max Saver 12, Energy Texas The Lone Saver Plus 12, 4Change Maxx Saver Value 8, Frontier Saver Plus 12, and Gexa Eco Saver Plus 12 — all market between 7.8¢ and 8.5¢ but behave like 20.4¢-20.9¢ plans for a 400-kWh household. The full table is worth a minute of your time.

Anyone whose average monthly usage runs under 800 kWh is exposed. That bucket includes:

• Apartments and condos. 400-600 kWh most months. Light AC, no pool pump, no electric dryer.
• Single occupants and roommate units. A 24-year-old living alone in a 600 sq ft studio is the textbook victim.
• College students. Off six weeks at winter break, off three months over summer. Usage shape is feast or famine; the credit rarely fires.
• Seniors on fixed incomes. Low ambient usage, careful with the thermostat. The credit was never designed for them.
• Energy-efficient households. Heat pumps, LED everything, new insulation. Lower the bill, smaller the chance the credit fires, worse the bill-credit plan performs.

The trick rewards size. Big house, big AC load, two EVs, a pool. The credit threshold becomes easy. For everyone else, the marketed rate is a number that never appears on a real bill.

Texas retail electricity providers compete on one ranking lever: the headline rate at 1,000 kWh on Power to Choose. That's the number sort-by-price uses. The number every comparison ad cites. The number that pulls a click.

A provider that can engineer the lowest headline rate at 1,000 kWh wins the auction for attention. Bill credits are the cleanest way to do that. Set the underlying energy charge wherever the financial model needs it, then attach a credit large enough to drag the 1,000-kWh average below competitors. The plan that wins the rank doesn't have to be the cheapest plan to actually run; it has to be the cheapest plan to display.

The Public Utility Commission of Texas regulates what the EFL must disclose, not how Power to Choose displays the result. So the disclosure exists. The signal that reaches the shopper is the single number that makes the design profitable.

Three steps. None of them are clever.

1. Pull your real 12-month usage. Your bill prints it. Your utility portal stores it. Smart Meter Texas downloads it as a CSV. Get twelve months so you capture both the mild April and the brutal August.

2. Compute each plan's total annual cost at YOUR monthly usages, not at 1,000 kWh. For each month, take that month's actual kWh, apply the plan's underlying energy charge, add TDU, apply the credit only if usage crossed the threshold. Sum the twelve months.

3. Rank by annual cost. Not by headline rate. Not by 1,000-kWh average. By the total you'd actually pay.

The Bill Analyzer runs that calculation against every live plan in your service area. Drop in your usage history, get a ranked list with the bill-credit threshold logic baked in. It's free, no sign-up. The mechanism matters more than the tool, though — if you'd rather do it in a spreadsheet, do it in a spreadsheet. The point is to never trust the 1,000-kWh number until you've checked your own.

An honest aside: bill-credit plans can be the cheapest option. For the right household.

If your usage runs consistently above 1,200 kWh every month — large home, electric heat, pool pump, EV charging, family of six — the credit fires every cycle. The same math that punishes apartments rewards you. Plans like Just Energy Mega Saver 12, which look pricey at 1,000 kWh, actually win at 2,000+ kWh because their structure favors heavy usage.

The point isn't that bill credits are evil. The point is that the marketed rate at 1,000 kWh tells you almost nothing about whether the plan fits your usage shape. A plan that's a 3-star choice for an apartment is a 5-star choice for a 4,000 sq ft home in Plano. Same plan, same EFL, different math. Use yours.

The marketed rate at 1,000 kWh tells the truth for one customer: the one who uses exactly 1,000 kWh every month. That customer doesn't exist.

Pull your real usage. Compare plans at your usage. Or use the Bill Analyzer to do it in two minutes. You'll save more by avoiding the wrong "cheapest" plan than by chasing whichever one is on top of the list this week.

Texas deregulation is genuinely a consumer right. The shopping tools just haven't caught up to how the plans actually price. Until they do, the math is on you. Start at the Texas comparison if you're new to all this. Outside Texas? Ohio, Pennsylvania, and Massachusetts have a different problem set entirely — the bill-credit trick is a Texas specialty.