Electricity Facts Label (EFL): What It Is and How to Read It

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The process for choosing the cheapest Texas electricity rates for your requirements goes beyond the displayed energy prices against a plan. To avoid end-of-the-month billing surprises, it is vital to check each plan’s Electricity Facts Label document.

The Electricity Facts Label (EFL) gives out the specific details of a particular energy plan, including the price, term length, and plan type – prepaid or postpaid. Reading this document thoroughly can help you pick out the right power plan for your situation and avoid unusually high electricity bills.

What Is an Electricity Facts Label (EFL)?

The Texas energy market is no longer a state-regulated monopoly. Electricity customers have the power to choose a retail company for their energy supply.

These Retail Electric Providers (REPs) offer competitive power prices to customers of various sectors and different usage requirements. However, not all companies are created equal. Some offer transparent, no gimmick electric rates while others may hide their terms and conditions in the fine print.

For this reason, the Public Utility Commission of Texas (PUCT) has mandated that REPs provide standard disclosures with every electric plan they offer. It is more like the nutrition label you find on the packaging of food products.

The Electricity Facts Label (EFL) sheet reveals all the important information regarding a plan, such as the contract period, green energy content, energy rates for various usage levels, and fixed or variable-pricing. You can even determine if there is a late fee for a delayed payment or cancellation fee for terminating your contract before the term ends.

The EFL can help you make a more informed decision using your Texas electric choice.

Components of an EFL

At the top of the document, you find the header section with your provider’s name, type of plan, and the contract start date.

The most crucial section is the Electricity Price of a plan. The next areas are collectively called the Disclosure Chart.

Here are the various sections you find on an EFL:

Electricity Price

The effective rates will vary based on the TDU (Transmission and Distribution Utility) in your service territory.

The total rates are calculated using TDU fees, base fees, and the energy charge.

This standardized format may also include other fees and bill credits you may receive.

Disclosure Chart

Type of Product: Fixed or variable-rate plan, and postpaid or pay in advance electricity contract.

Contract Term Length: The standard term length ranges from 1-36 months.

Early Termination Fee: The amount you may pay to the REP if you terminate the contract before the agreed-upon contract length.

Sources of Generation: Here, you can find out the power sources of each product.

Other details include:

  • If the total price of the product will change during the term and how much
  • Non-recurring fees and additional fees

How to Understand the EFL?

Reading the EFL is not sufficient; you have to understand each component:

Average Price per kWh

The average price per kWh is listed for the tired usage levels of 500, 1000, and 2000 kWh (kilowatt-hour) per month.

500 kWh usage level refers to a condo or an apartment, while 1000 kWh and 2000 kWh represent the energy consumed by small to mid-size homes and a large home, respectively.

Base Charge

The base charge is a flat fee included in your monthly bill, irrespective of the power consumed. Some plans may have high base charges; so, it is essential to check the EFL before signing up.

Energy Charge

The energy charge is set by your REP, who sells you electricity and sends you monthly bills.

TDU Charge

It is the amount you pay to the local utility. The TDU fee further breaks down into a monthly flat rate and a per kWh charge representing the cost of delivering electricity. Since the TDU is a regulated entity, your choice of REP does not impact this charge.

Contract Term

Month-to-month electricity plans are no contract, no commitment plans, while many plans are for a specific number of months, usually 12, 24, or 36 months. Short-term plans of 3-6 months and long-term plans for up to five years are also available with some REPs.

Termination Fee

If you don’t renew the contract but terminate it before the term is over, you may incur a penalty. However, if you are moving to a service territory where your current provider does not offer service, there will be no early termination fee.

Prepay Plans

Individuals with poor credit and those who need an electricity plan with no deposit can choose prepaid plans. Some providers also have same-day electricity plans. Also called pay as you go plans, these give you complete control over your energy spending and help you reduce your bills.

Renewable Content

For environmentally-conscious Texas electricity consumers, some plans offer renewable energy without the need to install solar panels. You can learn how much percentage of your electricity plan comes from renewable energy sources.

Type of Product

The Electricity Facts Label (EFL) document also makes mention of the type of product you choose.

There are several types of electricity plans, such as:

Flat-Rate Plans: These electricity plans have a fixed price per kWh during your agreement period.

Variable-Rate Plans: Also called month-to-month plans, the energy rates change according to the wholesale market price.

Tiered-Rate Plans: In Texas, you can find different rates for tiered usage amounts, e.g., 500 kWh, 1000 kWh, and 2000 kWh.

Base Charge Plans: These plans have a minimum or no usage fee up to a certain usage level, after which you will get billed per kWh.

Bill Credit Plans: These plans have a higher per kWh rate, but you receive discounts after hitting a specific threshold.

Time-of-Use Plans: Energy rates some plans will lower during certain periods of the day or week, such as free nights and weekends plans.

Avoid Monster Billing Shocks by Finding the Right Energy Plan

Ultimately, reading the EFL and understanding it can help you make wise energy decisions. Although the sheet may look complicated, it carries crucial information that guides you to find the right electricity plan suited for your needs.

Start comparing the EFL documents of various cheap-rate energy plans in your location! Enter your Zip code here to view the offerings of your local electricity providers.

If you are still confused, speak to our energy experts now!



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