If you only read one document before signing up for a Texas electricity plan, make it the Electricity Facts Label. A flashy advertised rate tells you almost nothing on its own. The Electricity Facts Label, or EFL, is the standardized one-page disclosure that every retail provider in deregulated Texas is required to give you, and it is where the real cost of a plan lives. Learn to read it and you will never be surprised by a bill again.
What is the EFL, and why does it matter?
The Public Utility Commission of Texas requires every retail electric provider to publish an Electricity Facts Label for each plan they sell. Think of it like the nutrition label on a food package: a single, consistent format so you can compare any two plans side by side instead of guessing which "low" rate is actually low.
The EFL exists because the advertised price is rarely the whole story. Two plans can both advertise an attractive headline rate and still cost very different amounts once delivery fees, monthly charges, and usage credits are factored in. The EFL forces all of that into the open.
The four parts of every EFL
Texas EFLs follow the same structure, so once you know the four sections you can read any provider's label in under a minute.
1. The average price per kWh
At the top you will see an average price per kilowatt-hour (kWh) shown at three usage levels: 500 kWh, 1,000 kWh, and 2,000 kWh. This is the single most useful number on the page, because it already blends the energy charge, delivery charges, and any monthly fees into one all-in figure.
Here is the catch most people miss: the average price changes depending on how much you use. Many plans show a much lower average at 1,000 kWh because of a usage credit that kicks in at that level, then a higher price at 500 kWh. Look at the column closest to your typical monthly usage, not the lowest number on the page. If you average around 800 kWh a month, the 1,000 kWh column is your realistic guide.
2. The energy charge and base charges
This section breaks the price into its parts:
- Energy charge — the per-kWh price for the electricity itself.
- Base or monthly charge — a flat fee some plans bill every month no matter how little you use. A monthly base charge can quietly raise your effective rate in low-usage months.
- Usage credit — a dollar amount some plans subtract once you cross a usage threshold (often 1,000 kWh). It can be great if you reliably hit the threshold, and a penalty if you do not.
This is also where you confirm whether the rate is fixed or how charges are layered, which tells you how the bill behaves as your usage swings season to season.
3. The TDU delivery charges
Your retail provider sells you the electricity, but a separate company, the Transmission and Distribution Utility (TDU), owns the poles and wires and charges to deliver power to your meter. Major Texas TDUs include Oncor, CenterPoint, AEP Texas, and TNMP. These delivery charges, a per-kWh amount plus a fixed monthly fee, are set by the utility and passed through on your bill.
The EFL discloses whether TDU charges are already baked into the quoted price or added on top. This matters a lot when comparing plans, because a rate that looks cheaper may simply be quoting the energy charge alone and adding delivery later.
4. The contract terms and fine print
The bottom of the EFL is where the commitments live:
- Rate type — fixed (locked for the term) or variable (can change month to month). Variable-rate plans can rise after an introductory period.
- Contract length — the number of months you are agreeing to, often 12, 24, or 36.
- Early termination fee — what it costs to leave before the term ends.
- Renewable content — the percentage of the plan sourced from renewable energy.
The number that fools most people
A plan's advertised rate often matches its price at exactly 1,000 kWh, where a usage credit makes the average look its best. If your home uses 600 or 1,400 kWh in a typical month, you may pay a noticeably different rate than the headline. Always read the EFL column nearest your real usage.
How to compare two EFLs the right way
When you have two labels in front of you, do not compare the big advertised numbers. Instead:
- Find your usage column. Pull a few past bills, find your average monthly kWh, and read the matching column on each EFL.
- Check for a base charge. A flat monthly fee can erase the savings from a slightly lower per-kWh rate, especially if you use less power.
- Confirm fixed vs. variable. A low variable rate today can climb after the first month or two. Fixed gives you a price you can plan around.
- Note the term and exit fee. A great rate is less attractive if leaving early is expensive.
- Make sure delivery is included. Confirm both labels treat TDU charges the same way so you are comparing apples to apples.
Why your ZIP code still drives the numbers
The EFL is standardized, but the actual prices on it depend on where you live. Your ZIP code and service address determine which TDU serves you and which retail providers compete in your area, and those delivery charges and plan options change the figures printed on every label. That is why the only EFL that matters is the one tied to a plan available at your address.
This is where it helps to have someone local pull the real labels for you. As an independent Ambit Energy consultant, Energy Direct can compare the plans available at your ZIP, walk you through the EFL line by line so there are no surprises, and Ambit handles the switch from your current provider. You never lose power and there is nothing to install. It is free to compare, and you only enroll if the numbers make sense for your home.
Frequently asked questions
Where do I find a plan's EFL?
Every retail electric provider must make the EFL available before you enroll, usually as a link or PDF right next to the plan price during sign-up. If you cannot find it, ask for it. You are entitled to see it before you commit.
Why does the average price change at different usage levels?
Because fixed monthly charges and usage credits are spread across however many kWh you use. At low usage a flat monthly fee makes the average price per kWh higher; at higher usage a credit can pull the average down. Always read the column nearest your real monthly usage.
Are TDU delivery charges the same on every plan?
The TDU delivery charges themselves are set by the utility for your area, so they are the same regardless of which retail provider you pick. What changes between plans is the energy charge, monthly fees, and credits the provider adds, and whether the EFL quotes delivery as included or separate.
Can Energy Direct help me read an EFL?
Yes. Enter your ZIP or give us a call and we will compare the plans available at your address, explain each EFL in plain English, and help you enroll. Ambit Energy handles the switch, so there is no gap in service.