How to Read Your Texas Electricity Bill

What Is on Your Bill

A Texas electricity bill looks more complicated than it needs to be. But once you understand the structure, it’s straightforward. Every bill has the same basic components:

Energy Charges

This is what your Retail Electric Provider (REP) charges you for the electricity itself. It’s based on how many kilowatt-hours (kWh) you used during the billing period, multiplied by your plan’s energy rate.

Some plans have a flat rate per kWh. Others have tiered pricing where the rate changes based on how much you use. For example, you might pay one rate for the first 1,000 kWh and a higher rate above that.

TDU Delivery Charges

Your local Transmission and Distribution Utility (TDU) charges for delivering electricity through the power lines to your home. These include:

• Base charge: A fixed monthly fee, regardless of usage. Typically $3 to $5.
• Metering charge: For reading your meter. Usually around $2 to $4.
• Per-kWh delivery charge: A variable charge based on how much electricity flows through the lines to your home.

TDU charges are the same no matter which REP you choose. They’re regulated by the Public Utility Commission of Texas.

Taxes and Fees

State and local taxes are applied to your electricity usage. These vary by municipality but are generally a small portion of your total bill.

Base Charges and Minimum Usage Fees

Many plans include a monthly base charge from the REP — a flat fee that covers account maintenance and billing. Some plans also have a minimum usage charge: if you use less than a threshold (often 1,000 kWh), an extra fee kicks in.

This is one reason plans that look cheap at 2,000 kWh can be expensive at lower usage levels. The base charge and minimum usage fee get absorbed into the rate at high usage but stick out at low usage.

How to Read the Rate You’re Actually Paying

Your effective rate is your total bill divided by total kWh used. This is the number that matters — not the advertised energy rate.

For example, if your bill is $150 and you used 1,200 kWh, your effective rate is 12.5 cents per kWh. If your plan advertises 10 cents per kWh at 2,000 kWh, you’re paying more than the headline rate because your usage is lower and the fixed charges have a bigger impact.

ChooseMyPower calculates this effective rate for every plan at your actual usage level, so you can compare what you’ll really pay.

Common Billing Issues

Bill Is Higher Than Expected

Check these in order:

1. Usage spike. Did your kWh consumption increase? Summer months can see usage jump 50% or more from air conditioning.
2. Rate change. If your contract expired, you may have been moved to a month-to-month rate that’s significantly higher.
3. Minimum usage charge. If you used less than your plan’s minimum, the extra fee may have inflated your bill.
4. Estimated read vs. actual read. Sometimes meters are estimated rather than read. The next actual read can produce a catch-up bill.

You See Charges You Don’t Recognize

Compare every line item against your Electricity Facts Label (EFL). The EFL is the official document that lists all charges for your plan. If something on your bill doesn’t match the EFL, contact your provider.

Your Contract Expired Without Notice

Texas law requires your REP to send notice before your contract expires. If you were moved to a holdover rate without proper notice, file a complaint with the PUCT.

Tips for Managing Your Bill

• Read your EFL before signing up. It’s the only document that shows what you’ll actually be charged.
• Track your monthly usage. Most providers have apps or portals showing daily and monthly consumption.
• Shop before your contract expires. Don’t wait to be rolled onto a month-to-month rate.
• Compare at your actual usage level. Use ChooseMyPower to see what plans cost at your real consumption, not at 2,000 kWh.