How to Read a Texas Electricity Facts Label (EFL): The Complete Guide

The Electricity Facts Label (EFL) is a standardized disclosure document required by the Public Utility Commission of Texas. Every retail electricity provider must give you one before you sign up for a plan.

Think of it like a nutrition label for electricity. Just as food labels show calories and ingredients, the EFL shows exactly what you're paying for and how much it costs.

Why it matters: The advertised rate on Power to Choose isn't always what you'll pay. A plan showing 8.5¢/kWh at 1,000 kWh might actually cost you 12¢/kWh if you only use 500 kWh. The EFL reveals these differences.

The PUC requires this format so you can compare apples to apples across providers.^[1]

Every EFL shows your average price per kWh at three usage levels. This is the most important section for comparing plans.

The Texas average: Households use about 1,100-1,200 kWh per month. Summer months often hit 2,000+ kWh with air conditioning running constantly.

Critical insight: Don't just look at the 1,000 kWh rate. If the 500 kWh rate is significantly higher, the plan has tiered pricing or a usage credit that penalizes low usage. This happens more than you'd expect.

How to find your usage:
- Check your last 12 months of bills
- Log into Smart Meter Texas for detailed history
- Summer months will be highest, winter/spring lowest

The top section of every EFL shows the average price per kilowatt-hour. This number includes everything: energy charges, TDU delivery charges, and any base fees or credits.

Sample pricing disclosure:

Red flag: See that 14.2¢ at 500 kWh vs 9.8¢ at 1,000 kWh? That's a 45% difference. This plan has a usage credit that kicks in around 1,000 kWh. If you use less, you're paying a premium.

What to look for:
- Small gap between levels = straightforward pricing
- Large gap (>3¢ difference) = tiered pricing or credits
- Plans with flat pricing across all levels are rare but simple to understand

The average price includes TDU delivery charges, which you'd pay regardless of provider. Focus on comparing the same usage level across different plans.

Below the average prices, the EFL shows exactly how your bill is calculated. This is where you find the actual energy rate, TDU charges, and any credits or fees.

Typical rate breakdown structure:

The math: Add up the energy charge, TDU delivery, and base charge. Subtract any credits. Divide by your usage to get the average price.

Example at 1,000 kWh:
- Energy: 1,000 × $0.045 = $45.00
- TDU: $4.39 + (1,000 × $0.058) = $62.39
- Base: $9.95
- Credit: -$50.00 (because usage >1,000)
- Total: $67.34 ÷ 1,000 = 6.7¢/kWh

Understanding this formula helps you predict your actual bill at any usage level, not just 500, 1000, or 2000.

Usage credits are the #1 reason your bill doesn't match the advertised rate. They're not bad—but you need to understand how they work.

How usage credits work:
- Plan offers a $50-$100 credit when you use more than X kWh
- If you hit the threshold, great—you get the low advertised rate
- If you fall short, you pay full price with no discount

Example plan with $75 bill credit at 1,000 kWh:

The Reddit frustration: "Why is my bill so high when I picked the cheapest plan?" Almost always because they didn't hit the usage credit threshold.

Who should use credit plans:
- Consistent, predictable usage above the threshold
- Summer months when you know you'll run AC heavily
- Large households with steady consumption

Who should avoid them:
- Variable usage month to month
- Apartments or small homes
- Snowbirds or frequent travelers

About 40% of your electric bill goes to your TDU (Transmission and Distribution Utility). These charges are the same no matter which electricity provider you choose.

Current TDU charges (January 2026):^[2]

Why this matters: TDU charges change twice a year (March 1 and September 1). When they increase, your bill goes up even if your energy rate is fixed.

The September 2025 TDU increase caught many Texans off guard. Their "fixed rate" plan stayed the same, but their total bill increased because TDU delivery charges aren't part of the fixed rate.

Key insight: The EFL average prices already include TDU charges. When comparing plans, you're comparing the total cost—not just the energy portion.

The bottom section of the EFL covers your contract details. Miss these, and you could face surprise fees or unwanted plan changes.

Key terms to check:

The 14-day rule: Most Texas electricity contracts let you switch without penalty during the final 14 days. Set a calendar reminder to shop before your contract ends.

Auto-renewal traps: Some plans automatically renew at much higher rates. The EFL and Terms of Service explain what happens—read them.

Moving? If you're relocating within Texas, many providers let you transfer your contract. If you're leaving the state, you can usually cancel without the full ETF.

Pro tip: A plan with a $150 ETF divided by 12 months = $12.50/month effective insurance. Sometimes paying a small ETF to escape a bad rate makes financial sense.

Every EFL shows what percentage of the plan's electricity comes from renewable sources. Texas leads the nation in wind power, so many plans offer significant renewable content.^[3]

Typical renewable breakdown:

What "100% renewable" means: The provider purchases Renewable Energy Credits (RECs) matching your usage. The actual electrons flowing to your home come from the shared grid—which is about 35% renewable regardless.

Is green energy worth the premium? Some 100% renewable plans cost the same as standard plans. Others charge 1-2¢/kWh more. Check the EFL to compare actual prices, not marketing claims.

Truth: Thanks to wind and solar growth, even "standard" Texas electricity is cleaner than most states. The EFL shows exactly what you're getting.

Once you understand EFLs, comparing plans becomes straightforward. Here's the systematic approach.

Step 1: Know your usage
Pull your last 12 months of bills. Note your lowest month, highest month, and average.

Step 2: Find your usage bracket
- Under 700 kWh average? Focus on 500 kWh rates
- 700-1,300 kWh? Focus on 1,000 kWh rates
- Over 1,300 kWh? Focus on 2,000 kWh rates

Step 3: Compare apples to apples

- Low user (600 kWh)? Plan B wins
- Average user (1,100 kWh)? Plan A wins
- High user (1,800 kWh)? Plan A wins by a lot

Step 4: Check the details
- Contract length fits your timeline?
- ETF reasonable if you need to move?
- Any weird fees or restrictions?

Step 5: Calculate annual cost
Multiply your average monthly usage by 12, then by the rate. A 1¢/kWh difference at 1,000 kWh = $120/year.

Certain patterns in EFLs signal potential problems. Watch for these warning signs.

Red flag #1: Extreme price gaps
If the 500 kWh rate is double the 1,000 kWh rate, the plan relies heavily on usage credits. One low-usage month and your bill spikes.

Red flag #2: Variable or indexed rates
The EFL will state "Variable" or "Indexed" price type. These rates change monthly based on wholesale prices. After the 2021 winter storm, some Texans got $5,000+ bills on variable plans.

Red flag #3: Hidden fees in the formula
Base charges over $15/month add up. A $4.95 monthly fee is standard. A $14.95 fee means you're paying $120/year before using any electricity.

Red flag #4: Tiered rates that hurt your usage pattern
Some plans have multiple tiers: 0-500 kWh at one rate, 501-1000 at another, 1001+ at a third. If you consistently land in an expensive tier, find a simpler plan.

Red flag #5: No-ETF "free" cancellation
Sounds good, but often means the provider can also cancel on you with little notice, or the rate isn't competitive to begin with.

Reddit wisdom: "If a plan looks too good to be true at 1,000 kWh, check the 500 and 2,000 kWh rates. That's where they hide the catch."

Some Texas plans offer "free" electricity during certain hours. The EFL reveals whether these deals actually save money.

How Free Nights plans work:
- Free electricity from 9 PM to 6 AM (hours vary by plan)
- Higher rate during daytime hours
- Best for night owls and EV owners who charge overnight

EFL example for Free Nights plan:

The math: If 40% of your usage happens at night, you effectively pay: (0.6 × 18.5¢) = 11.1¢/kWh average. Compare that to standard plans at your usage level.

Free Nights traps:
- AC runs mostly during hot daytime hours
- Weekend usage often daytime
- Solar homeowners may be excluded (major Reddit complaint)

Who wins with Free Nights:
- EV owners charging overnight
- Night shift workers home during the day
- Those willing to shift laundry, dishwasher to late evening

Check the EFL carefully: The average prices at 500/1000/2000 kWh already factor in typical usage patterns. If those numbers aren't competitive, the "free" hours won't save you money.

Never enroll in a plan without reading the EFL first. Here's where to find it.

On Power to Choose:
1. Search for plans at PowerToChoose.org
2. Click any plan in the results
3. Look for "Electricity Facts Label" link (usually a PDF)
4. Download and review before clicking "Enroll"

On provider websites:
- Look for "Plan Details" or "View EFL" links
- Sometimes labeled "Disclosure Documents"
- Required to be available before enrollment

On ElectricRates.org:
- Click any plan to see details
- EFL link included with plan information
- Side-by-side comparison tools

After enrollment:
The provider must send you the EFL within 3 business days of signing up. Keep it for reference throughout your contract.

Can't find the EFL? That's a red flag. Legitimate providers make it easy to access. If a plan hides its EFL, shop elsewhere.

Pro tip: Screenshot or save EFLs for plans you're considering. Rates change frequently, and having the original EFL protects you if there's a dispute about what you signed up for.

The EFL gives you everything needed to calculate your exact bill at any usage level. Here's the formula.

The calculation:

Example calculation:
Let's say you use 1,150 kWh and the EFL shows:
- Energy charge: 5.2¢/kWh
- TDU delivery: 5.8¢/kWh
- TDU monthly: $4.39
- Base charge: $9.95
- Bill credit: -$50 if usage ≥1,000 kWh

Math:
- Energy: 1,150 × $0.052 = $59.80
- TDU: 1,150 × $0.058 = $66.70
- TDU monthly: $4.39
- Base: $9.95
- Credit: -$50.00 (you qualified!)
- Total: $90.84
- Effective rate: 7.9¢/kWh

Why this matters: The advertised 1,000 kWh rate might be 8.5¢. But at 1,150 kWh, you're actually paying 7.9¢—even better. Understanding the formula helps you find plans optimized for your specific usage, not just the benchmark levels.

Use our calculator: Enter your actual monthly kWh on ElectricRates.org to see personalized costs for every available plan.