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 (read our deep dive on bill credit gimmick plans). 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 (see our explainer on minimum usage fee traps). 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
Here is the exact step-by-step cost breakdown for a home consuming 1,200 kWh:
| Bill Line Item | Calculation Formula | Itemized Cost |
|---|---|---|
| Retail Energy Charge | 1,200 kWh × $0.115 | $138.00 |
| TDU Volumetric Delivery | 1,200 kWh × $0.049 | $58.80 |
| Retail Base Monthly Fee | Flat monthly account charge | $4.95 |
| TDU Fixed Monthly Meter Fee | Regulated utility customer charge | $4.39 |
| Total Monthly Electricity Bill | Sum of all energy & delivery charges | $206.14 |
| True Effective Rate | $206.14 ÷ 1,200 kWh | 17.18¢ / kWh |
Notice how the true effective rate (17.2¢) is significantly higher than the raw advertised energy charge (11.5¢) due to TDU pass-through fees and fixed charges. Compare this against our local rate guides for Oncor delivery charges and CenterPoint delivery charges. GetElectricity models this math automatically across all 12 months for every plan, saving you from calculating it manually.
Skip the EFL Decoding on GetElectricity
Every line of the Electricity Facts Label — energy charges, base charges, TDU pass-throughs, and bill-credit tiers — is a formula whose result depends entirely on your usage.
GetElectricity connects directly to your Smart Meter Texas data to build your real 12-month usage profile, then simulates hundreds of active plans across Plano, Frisco, McKinney, and Carrollton, computing the effective rate of every plan at your exact usage instead of the three gridpoints the EFL advertises.
Enter your ZIP code on GetElectricity to turn every EFL into one honest number.
Frequently Asked Questions
What is an Electricity Facts Label (EFL)?
The EFL is a disclosure document every Texas electricity plan is required by law to publish — think of it as the nutrition label for your plan. Whatever marketing claims a provider makes on the front page, the EFL is where the actual ingredients must be stated, and it is legally binding: in a dispute, the EFL terms override any marketing slogans or verbal promises.
What are the three critical parts of an EFL?
First, the pricing disclosure table showing the average price per kWh at 500, 1,000, and 2,000 kWh — identical numbers mean a stable flat-rate plan, while different numbers mean a structured or tiered plan. Second, the price breakdown listing the base charge, the energy charge, and TDU delivery charges (a flat monthly fee around $4.00 plus roughly 4¢ to 6¢ per kWh). Third, the disclosure chart covering contract length, fixed versus variable rate, the early termination fee, and the renewable energy percentage.
What red flags should I scan for in an EFL?
Three standouts: a usage credit that only applies inside a narrow window (such as an $80 credit only when usage is between 1,000 and 1,500 kWh), a minimum usage fee (usually $9.95) that penalizes you for using less than about 1,000 kWh, and variable TDU pass-through — always confirm whether TDU charges are included in the advertised energy rate or added on top, since that can push a raw 11.5¢ energy charge to a true effective rate of 17.2¢ per kWh.