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Decoding the Electricity Facts Label (EFL): A Texan’s Guide to Hidden Fees

May 28, 2026Get Electricity StaffElectricity Guide

Decoding the Electricity Facts Label (EFL): A Texan’s Guide to Hidden Fees

Every electricity plan in Texas is required by law to have an Electricity Facts Label (EFL). Think of it like the nutrition label on a cereal box. While a provider can plaster whatever marketing claims they want on the front page—like "Super Saver!" or "Free Power!"—the EFL is where they must state the actual ingredients of their plan.

If you don't read the EFL before signing a contract, you are signing a blank check. Here is how to decode the EFL and protect your wallet.

Key Takeaways

  • The EFL is Legally Binding: In case of a dispute, the terms on the EFL override any marketing slogans or verbal promises.
  • Three Critical Parts: Look for the pricing table (rates at 500/1,000/2,000 kWh), the pricing breakdown (energy charge vs. TDU charges), and the disclosure questions (contract length, ETFs, renewable percentage).
  • TDU Charges are Standard: Transmission and Distribution Utility (TDU) charges are set by the state and passed through by your provider.
  • Watch out for Credits: Plan details that list large credits or usage penalties are highly volatile.

EFL Plan Gimmick & Volatility Matrix

Below is an interactive breakdown illustrating how different plan structures behave when your usage shifts slightly around the standard 1,000 kWh threshold:

Anatomy of an Electricity Facts Label

A standard EFL is divided into three key sections:

1. The Pricing Disclosure Table

This table shows the average price per kWh at 500 kWh, 1,000 kWh, and 2,000 kWh.

  • If all three numbers are identical (e.g., 14.5¢, 14.5¢, 14.5¢), you have a flat-rate plan. These are stable and easy to understand.
  • If these numbers are different (e.g., 18.2¢, 11.5¢, 16.1¢), you have a structured or tiered plan. The price fluctuates depending on how much you consume.

2. The Price Breakdown (The Fine Print)

This section shows how the average rate is calculated. It lists the individual components of your bill:

  • Base Charge: A flat monthly fee (usually $0 to $9.95) charged regardless of your usage.
  • Energy Charge: The price you pay the provider for the actual electricity you consume.
  • TDU Delivery Charges: The fees charged by your local utility company (like Oncor or CenterPoint) to maintain the physical power lines and poles. These consist of a flat monthly fee (around $4.00) plus a per-kWh charge (around 4¢ to 6¢).

3. Disclosure Chart

Located at the bottom of the page, this answers crucial legal questions:

  • What is the contract duration (e.g., 12, 24, or 36 months)?
  • Is the rate fixed or variable?
  • What is the Early Termination Fee (ETF)?
  • What percentage of the plan's power comes from renewable sources?

Red Flags to Watch for in an EFL

When reviewing an EFL, scan it immediately for these common traps:

Red Flag #1: "Usage Credit of $80.00"

If you see a line that says something like "You will receive an $80.00 credit for each billing cycle in which your usage is greater than 999 kWh and less than 1,501 kWh," you are looking at a highly engineered plan. Unless you can guarantee your usage will fall into that narrow window every single month, avoid this plan.

Red Flag #2: "Minimum Usage Fee"

Some plans charge a fee (usually $9.95) if you use less than a certain amount (typically 1,000 kWh) in a month. This is a penalty for conserving energy, and it makes winter bills surprisingly high for small apartments.

Red Flag #3: "Variable TDU Pass-Through"

Ensure the EFL explicitly states whether the TDU charges are included in the energy rate or passed through separately. If they are passed through separately, make sure to add the current TDU rate to the advertised energy rate to find your true average price.

How to Calculate Your True Cost from an EFL

Let's do the math yourself. Suppose the EFL lists:

  • Base Charge: $4.95
  • Energy Charge: 11.5¢ per kWh
  • TDU Charges: $4.39 per month + 4.9¢ per kWh

If your home used 1,200 kWh last month, your bill calculation is:

  1. Energy Cost: 1,200 kWh * $0.115 = $138.00
  2. TDU Per-kWh Cost: 1,200 kWh * $0.049 = $58.80
  3. Fixed Charges: $4.95 (Base) + $4.39 (TDU Fixed) = $9.34
  4. Total Bill: $138.00 + $58.80 + $9.34 = $206.14
  5. True Effective Rate: $206.14 / 1,200 kWh = 17.2¢ per kWh

Notice how the true effective rate (17.2¢) is significantly higher than the raw energy charge (11.5¢) due to TDU pass-through fees and fixed charges. GetElectricity does this math automatically for every plan, saving you from calculating it manually.