How to Read an Electricity Facts Label

Introduction

Texas operates within a deregulated energy market, which means that many residents receive electricity through a Retail Electric Provider (REP) while living in areas managed by a Transmission and Distribution Utility (TDU). With hundreds of REPs and multiple plans to choose from, understanding your electricity bill can feel overwhelming. That's where the Electricity Facts Label (EFL) comes in.

Electricity Facts Labels (EFLs) are essential for understanding the details of your energy plan, including the average price you’ll pay for electricity. The EFL breaks down costs based on how much energy you use, showing the average price per kilowatt-hour at 500 kwh, 1,000 kwh, and 2,000 kwh. This information helps you compare the average price across different plans offered by Retail Electric Providers (REPs). By analyzing the average price listed on an EFL, you can make informed decisions and choose the best energy plan for your needs.

In this guide, we’ll cover more about what an Electricity Facts Label is and how you can use it to make informed decisions about your energy usage, especially if you’re considering solar energy in Texas.

What is an Electricity Facts Label (EFL)?

An Electricity Facts Label (EFL) in Texas is like a price tag for your electricity plan. It's a transparent, standardized document required by the Public Utility Commission of Texas (PUCT) that provides key details about your electricity service. Think of it as the equivalent of a nutrition label for your energy plan.

Why is the Electricity Facts Label important?

ELFs are designed to help Texas electricity customers:

Understand plan details

Electricity facts labels outline important aspects of your electricity plan, such as:

• Type of plan (fixed-rate, variable-rate, or indexed)

• Energy rate

• Contract length

• Early termination fees

• Renewable energy content which indicates the percentage of your electricity sourced from renewable resources like solar or wind.

Identify costs

Breakdown of charges includes:

• Rate per kilowatt-hour (kwh): The cost for the electricity you use.

• Base charges: Monthly fees required by the retail electric/ retail energy provider.

• Delivery charges: Fees set by the TDU for delivering electricity to your home.

Compare plans

Since Electricity Facts Labels follow a standardized format, they make it easier to compare electricity plans across different REPs. This helps you find the best option for your energy needs and budget.

How to find an Electricity Facts Label

Finding your plan’s Electricity Facts Label is simple:

• Visit the energy provider’s website: Look for a “plans” or “documents” section where the EFL is typically available for download.

• Search by plan name: Use the name listed on your utility bill to locate the correct EFL.

• Use Google: Search for your rep’s name, plan name, and “efl” (e.g., "[energy provider] [plan name] efl").

How to read an Electricity Facts Label

Once you know how to read one Electricity Facts Label, you can read them all. Here are the key sections to look for:

Pricing information

• Details the rate per kwh based on average usage levels (e.g., 500 kwh, 1,000 kwh, and 2,000 kwh).

• Includes base charges and delivery fees:

Base Charge

Base fees are monthly fixed amounts covering operating expenses. The terms and conditions of your agreement are constant. The basic fee is zero but this is not the case for most plans.

Delivery fee

Delivery fees are charges on your electricity bill that cover the cost of transporting power from the grid to your home. These fees, set by the local TDU, include maintenance of power lines, infrastructure upgrades, and operational costs. Delivery fees are fixed and apply to all electricity customers in the area, regardless of their REP or plan. Understanding delivery fees can help you better estimate your total electricity costs.

Contract terms

Contract details such as contract durations, early termination costs and security deposits, as well as electricity supply prices are included. EFLs determine which proportion of power comes from solar power and compare this with a typical Texas power mix. The EFL may also refer to other information on your contract.

• Specifies the type of plan (fixed, variable, indexed).

• Lists the contract term length and any applicable cancellation fees. The longest contracts are generally 12-24 months. 

Additional information

• Includes renewable energy percentages.

• Provides any extra fees or incentives.

Pro tip: If you’re considering solar panels, look for plans with high renewable energy percentages or options tailored to solar customers.

Why Electricity Facts Labels matter for solar panel customers

For Texans exploring solar energy options, Electricity Facts Labels provide critical insights:

• Understand energy rates: Knowing the cost of electricity helps you estimate potential savings from solar panels.

• Assess compatibility: Ensure the plan supports solar energy integration, such as net metering or renewable energy credits.

Take control of your energy choices

Electricity Facts Labels empower Texas electricity customers to make informed decisions. 

Whether you’re comparing plans, understanding your energy costs, or exploring solar options, these labels are a valuable resource.

Ready to take the next step? Learn how solar energy can transform your electricity usage and potentially lower your bills. Contact us today to explore solar panel solutions tailored to your needs.