Texas Electricity Glossary

366 plain-English definitions of the terms you’ll meet on your bill, your Electricity Facts Label, and the plans you compare — written for Texas’s deregulated market, not the textbook.

By Han Hwang, Consumer Advocate 366 terms

Electricity Basics

The units and concepts behind every electric bill.

Air Infiltration

The uncontrolled flow of outdoor air into a home through gaps, cracks, and openings in the building shell — around doors, windows, electrical outlets, and pipe penetrations. It forces heating and cooling systems to work harder because conditioned air escapes at the same time unconditioned outside air enters. The EIA estimates air infiltration accounts for 25–40 percent of a typical home's heating and cooling energy use.

Common fixes include weatherstripping on exterior doors and caulking around window frames, both of which cost under $50 per opening and can be done without a contractor.

All-Electric Home

A residence that uses electricity as the sole energy source for every major end use — space heating, cooling, water heating, and cooking — with no natural gas or propane appliances. Because electricity carries loads that gas-supplied homes split across two fuel sources, all-electric homes show higher average monthly kWh consumption and are more sensitive to electricity rate changes.

Ampere A

An ampere, or amp, measures how much electric current is flowing through a wire. It's the volume of electricity moving, where voltage is the pressure behind it. Your home's breaker panel is rated in amps, often 100 or 200.

Each breaker in your panel trips at a set amperage to keep a circuit from overheating. Volts times amps gives you watts, the actual power being used.

Related: Volt , Watt

Automatic Transfer Switch ATS

An electrical device installed between the utility line and a home's main panel that detects when grid power is lost, disconnects the home from the grid, and switches it to a backup generator — all without manual intervention. It reverses the process when grid power returns, preventing the generator and utility power from being connected at the same time, which would be dangerous.

Average Monthly Usage

The average Texas home uses roughly 1,000 kilowatt-hours a month, though summer cooling can push it well past 2,000. This number matters because electricity plans advertise their rate at 500, 1,000, and 2,000 kWh, and the price can change a lot depending on which usage level you actually hit.

A plan that looks cheap at 1,000 kWh can cost much more at 500 kWh because of hidden minimum-usage fees or bill credits. Check your past 12 months of bills to find your real average before you compare.

Source: Power to Choose (PUCT)

Baseload

Baseload is the steady, around-the-clock level of electricity demand that never goes away, even at 3 a.m. when most of Texas is asleep. Power plants that run constantly, like nuclear and large natural gas units, cover this baseline, while other sources ramp up to meet the daytime peaks.

Picture a chart of daily electricity use: baseload is the flat floor everything sits on top of, and peak demand is the tall spike in the afternoon.

Related: Peak Demand , Load , Megawatt

Source: ERCOT

BTU BTU

British Thermal Unit — the standard measure of heat energy used to rate the cooling or heating capacity of air conditioners and other HVAC equipment. One BTU is the amount of energy needed to raise one pound of water by one degree Fahrenheit. Air conditioners are commonly rated in BTUs per hour, with larger numbers indicating more cooling power.

A window unit rated at 12,000 BTU per hour can remove roughly twice as much heat from a space as a 6,000 BTU unit in the same amount of time.

Source: U.S. Energy Information Administration

Building Envelope

The set of physical components that separate a home's conditioned interior from the outdoors, including walls, roof, windows, doors, and foundation slab or crawl space. A tighter, well-insulated envelope reduces the temperature difference the HVAC system must overcome, directly cutting the cooling and heating electricity a home requires.

Older homes with minimal attic insulation and single-pane windows can have envelope losses severe enough to double electricity use compared to a same-size newer home — making envelope quality as important as square footage when estimating expected bills.

Source: U.S. Department of Energy

C-Wire C-wire

A dedicated low-voltage wire in a home's thermostat wiring that provides continuous 24-volt power to a thermostat. Most smart thermostats require a C-wire to operate reliably; without one, the device may lose power or behave erratically.

Homes built before roughly 2000 often lack a C-wire at the thermostat location, requiring either an adapter kit or a short electrical upgrade before a smart thermostat can be installed.

Source: U.S. Department of Energy – Energy Saver

Carbon Monoxide Poisoning CO Poisoning

A life-threatening medical emergency caused by inhaling carbon monoxide gas, which is produced by burning fuel — such as gas, charcoal, or propane — in an enclosed or poorly ventilated space. During power outages, CO poisoning risk rises sharply when people use gas ovens, grills, or portable generators indoors as improvised heat sources.

Source: Texas Department of State Health Services

Coefficient of Performance (COP) COP

A measure of how efficiently a heat pump converts electricity into usable heat, expressed as the ratio of heat energy delivered to electrical energy consumed. A COP of 2.5 means the system delivers 2.5 units of heat for every 1 unit of electricity used, making it far more efficient than resistance heating, which has a COP of exactly 1.

Compressor Cycle

The on-off pattern of a refrigerator's compressor motor as it works to maintain the interior temperature. The compressor runs until the target temperature is reached, then shuts off until heat leaks back in. Longer or more frequent cycles — caused by a hot environment, a failing door seal, or an aging compressor — increase the appliance's overall energy consumption.

Cooling Load

The amount of heat energy an air conditioning system must remove from a building to maintain a desired indoor temperature. Cooling load increases as outdoor temperatures rise, as more heat enters through windows and walls, or as internal sources like appliances and occupants add heat. It is typically measured in British Thermal Units (BTUs) per hour or in tons of cooling capacity.

Cooling Setpoint

The target indoor temperature at which an air conditioning system is programmed to activate. When the indoor temperature rises above the setpoint, the AC compressor turns on to bring the temperature back down. Raising the setpoint reduces how often the compressor runs and directly lowers electricity consumption.

Cost per Mile

The total fuel or electricity expense to drive one mile, calculated by dividing the cost of the fuel or energy source by the vehicle's efficiency rating. For electric vehicles, it equals kWh per mile multiplied by the electricity rate. For gasoline vehicles, it equals the price per gallon divided by miles per gallon.

Because electricity rates and gas prices vary, cost per mile is a more apples-to-apples way to compare fueling costs across different vehicle types than looking at price per gallon or price per kWh alone.

Demand Shifting

The practice of moving discretionary electricity consumption—such as running a dishwasher, doing laundry, or charging an electric vehicle—away from high-price or high-demand periods toward times when electricity is cheaper or grid conditions are less stressed. Demand shifting is the primary strategy households use to reduce costs on time-of-use or indexed electricity plans.

Duct Leakage

The unintended escape of conditioned air from holes, gaps, or poorly connected joints in a home's heating and cooling ductwork before that air reaches the intended room. ENERGY STAR estimates duct leakage accounts for 20–30 percent of cooling energy loss in many homes. Sealing ducts is a utility-rebated improvement offered by several Texas TDUs.

Source: ENERGY STAR

Electric Strip Heat

A heating method that converts electricity directly into heat using resistance coils — the same principle as a toaster or space heater scaled to a whole home. Strip heat consumes roughly two to three times more electricity per unit of heat delivered than a heat pump, making it the primary driver of high winter electricity bills in all-electric homes.

A home relying on strip heat may see its January kWh total rival or exceed its July air-conditioning bill.

Electricity Usage

Your electricity usage is the total amount of energy your home consumed during the billing period, measured in kilowatt-hours. It's the single biggest factor in what you pay, and it's the number you plug in when comparing plans on a site like Power to Choose.

Your smart meter records usage and sends it to your TDU, who passes it to your retail provider for billing. Heating and cooling drive most of the swing from month to month in Texas.

Source: Power to Choose (PUCT)

ENERGY STAR

A voluntary certification program run by the U.S. Environmental Protection Agency (EPA) that identifies appliances, electronics, and building products meeting defined energy-efficiency thresholds. Products carrying the ENERGY STAR label have been independently tested and use meaningfully less electricity than standard models for the same function.

Source: U.S. EPA ENERGY STAR

EV Home Charging

The practice of recharging an electric vehicle's battery using electricity from a residential service connection, typically overnight. Home charging adds kilowatt-hours to a household's monthly electricity bill, and the rate paid per kWh on the household's electricity plan directly determines the per-mile fueling cost.

Federal Appliance Efficiency Standards

Minimum energy performance requirements set by the U.S. Department of Energy for household appliances including refrigerators, dishwashers, and water heaters. These standards are periodically tightened, meaning newer appliances are legally required to consume less energy than older models. Appliances already in use are not subject to the new limits; only newly manufactured units must comply.

Source: U.S. Department of Energy

Fuel Stabilizer

A chemical additive mixed into stored gasoline to slow oxidation and varnish buildup, extending the fuel's usable shelf life from about 30 days to 12 months or longer. Generators fueled with degraded, unstabilized gasoline can suffer carburetor damage or fail to start, which is a critical risk for storm-preparedness stockpiles.

Heat Pump

A vapor-compression system that moves heat rather than generating it: in winter it extracts warmth from outdoor air to heat the home; in summer it reverses to act as an air conditioner. A heat pump delivers two to four units of heating or cooling for every unit of electricity consumed, making it far more efficient than electric strip heat and a significant factor in comparing winter electricity usage across home types.

Heat-Pump Water Heater HPWH

A water heater that uses a refrigerant cycle to move heat from surrounding air into the water tank rather than generating heat directly from electric resistance coils. Heat-pump water heaters typically use 60 to 70 percent less electricity than a conventional electric storage water heater for equivalent hot-water output. They require adequate space with ambient temperatures above roughly 40°F to operate efficiently.

A Texas household replacing a standard 4,500-watt electric storage water heater with a heat-pump model can reduce water-heating consumption from roughly 270 kWh per month to under 100 kWh.

Home Battery Storage

A rechargeable battery system installed at a residence that stores electricity — from the grid, rooftop solar, or both — and discharges it to power the home when the grid is unavailable. Capacity is measured in kilowatt-hours (kWh), and the system is managed by an inverter that converts stored DC power to the AC power household appliances use.

A single residential battery unit typically holds 10 to 15 kWh of usable capacity, which can cover essential loads for 12 to 24 hours but falls short of whole-home use during a multi-day outage without solar recharging.

Source: U.S. Department of Energy – Energy Saver

Home Energy Audit

A systematic inspection of a home to identify where energy is being wasted and which improvements would reduce consumption. Auditors typically examine insulation, air sealing, appliances, HVAC equipment, and windows, and may use tools such as a blower door test or thermal camera.

In Texas, some utilities and assistance programs offer subsidized or free audits; a professional audit typically costs $200–$400 when paid out of pocket.

Source: U.S. Department of Energy

Horsepower hp

A unit of mechanical power used to rate electric motors, including pool pump motors. One horsepower equals 746 watts of electrical power at 100 percent efficiency; real-world motors draw more due to efficiency losses, so a 1 hp pool pump motor typically pulls around 1.2 kilowatts from the grid. Motor horsepower and daily run time together determine how much electricity the pump consumes each month.

Source: U.S. Energy Information Administration

HVAC HVAC

Acronym for Heating, Ventilation, and Air Conditioning — the equipment systems that control a building's indoor temperature, humidity, and air quality. In Texas, the air conditioning component dominates residential electricity use, typically accounting for 60–70 percent of a home's total consumption during peak summer months.

IECC Climate Zone

A geographic classification defined by the International Energy Conservation Code (IECC) that groups regions with similar heating and cooling demands together. Most of Texas falls in zones 2 and 3, which are warm and mixed-humid climates. The classification determines the minimum insulation levels, window performance, and air-sealing standards required by building codes for new and renovated homes.

Source: U.S. Department of Energy — Energy Codes

International Energy Conservation Code IECC

A model building code developed by the International Code Council that sets minimum energy efficiency standards for new residential and commercial construction, including insulation levels, window performance, duct sealing, and mechanical equipment. Individual states adopt and sometimes amend the IECC; Texas uses its own adopted version to govern new construction statewide.

Source: U.S. Department of Energy — Building Energy Codes Program

Kilowatt kW

A kilowatt is 1,000 watts. It measures how fast you're using electricity at a given moment, not how much you use over time. Think of it like speed: kilowatts are the speedometer, kilowatt-hours are the miles.

A central air conditioner might pull 3 to 5 kilowatts while it's running. Run 5 kW for two hours and you've used 10 kilowatt-hours.

Related: Kilowatt-Hour , Watt , Load , Peak Demand

Kilowatt-Hour kWh

A kilowatt-hour is the unit your electricity is measured and priced in. It's how much energy you use by running 1,000 watts for one hour. Every charge on your Texas electric bill traces back to how many kilowatt-hours you used that month.

Ten 100-watt bulbs left on for an hour burn one kilowatt-hour. A typical Texas home uses around 1,000 kWh a month, and your energy rate is quoted in cents per kWh.

Source: Public Utility Commission of Texas

kWh per 100 Miles kWh/100 mi

The EPA's standard measure of how much electricity an electric vehicle consumes to travel 100 miles. A lower number means the vehicle is more efficient. The figure is published for every model year on fueleconomy.gov and is used to calculate fueling cost per mile.

For example, a vehicle rated at 25 kWh/100 mi will consume 0.25 kWh for every mile driven — multiply that by your electricity rate to get cost per mile.

Source: U.S. Department of Energy — fueleconomy.gov

Level 2 EV Charging

A method of charging a plug-in electric vehicle using a 240-volt circuit — the same voltage as a large home appliance — that delivers roughly 7 to 11 kilowatts per hour of charge, significantly faster than a standard 120-volt outlet. Because a Level 2 session draws substantial power for several hours, scheduling it during off-peak electricity hours can produce notable savings on a time-of-use plan.

Load

Load is the amount of electricity a home, building, or the whole grid is drawing at a given moment, measured in kilowatts or megawatts. The more devices running at once, the higher the load. It's the demand side of the equation that ERCOT has to keep matched with supply, second by second.

Your home's load spikes when the AC, oven, and dryer all run together. Across Texas, total load climbs every summer afternoon as millions of air conditioners kick on at the same time.

Related: Peak Demand , Kilowatt , Megawatt , Baseload

Source: ERCOT

Load Shape

The pattern of a household's or facility's electricity consumption over time, typically shown as usage plotted hour by hour or day by day. Load shape reveals when consumption is highest and lowest, which determines how well different rate plan structures — such as time-of-use or flat-rate plans — will fit a given customer.

A household that concentrates most of its usage on weekend mornings has a very different load shape from one that runs appliances in the late afternoon, and the two households may pay very different amounts under the same time-of-use plan.

Megawatt MW

A megawatt is one million watts, or 1,000 kilowatts. It's the unit used to measure big power, like a power plant's output or how much electricity all of Texas is using at once. You won't see it on your bill, but you'll hear it whenever ERCOT talks about the grid.

One megawatt powers roughly 200 Texas homes during a summer afternoon. ERCOT set its all-time peak demand record on August 20, 2024, when statewide demand topped 85,500 megawatts.

Related: Kilowatt , Watt , Peak Demand , Baseload

Source: ERCOT

Megawatt-Hour MWh

A unit of electrical energy equal to 1,000 kilowatt-hours. Wholesale electricity is priced and traded in megawatt-hours, while retail bills report household consumption in kilowatt-hours.

A household that uses 1,000 kWh in a month has consumed exactly 1 MWh; a provider paying $50 per MWh wholesale translates that to roughly 5 cents per kWh before adding delivery charges and margin.

Miles per Gallon MPG

The EPA's standard measure of how far a gasoline-powered vehicle travels on one gallon of fuel. A higher number means better fuel economy. The EPA publishes combined city/highway MPG figures for every model year, which are used to calculate the per-mile cost of driving on gasoline.

Source: U.S. Department of Energy — fueleconomy.gov

Mini-Split

A ductless heating and cooling system pairing an outdoor compressor with one or more indoor air handlers to condition individual rooms or zones, with no central ductwork required. Mini-splits are common in apartments, home additions, and older homes that lack duct systems, and their per-zone operation can significantly affect monthly kWh totals compared to a whole-home central system.

Nameplate Rating

The energy consumption or power output figure printed on an appliance's label, representing performance under standardized test conditions. Real-world consumption can differ from the nameplate rating depending on environmental factors such as ambient temperature, how full the appliance is kept, and how often it is opened.

Package Terminal Air Conditioner PTAC

A self-contained heating and cooling unit installed directly through an exterior wall, common in hotels, older apartment buildings, and multifamily housing. Unlike a window unit, a PTAC is permanently built into the wall sleeve and typically cannot be removed by the tenant. It serves only the room or suite in which it is installed.

Peak Demand

Peak demand is the highest amount of electricity being used across the grid at one time, usually a hot summer afternoon between 3 and 7 p.m. when air conditioners run hardest. ERCOT watches peak demand closely because that's when the grid is stretched thinnest and prices climb.

Texas hits its yearly peak in July or August. The state's all-time record was about 85,500 megawatts, set August 20, 2024. Some time-of-use plans charge more during these peak hours to nudge you to shift usage to cheaper times.

Related: Load , Baseload , Megawatt

Source: ERCOT

Phantom Load

Electricity consumed by appliances and devices when they are switched off or in standby mode but still plugged in. Common sources include older refrigerators, pool pumps, and electric water heaters running on incorrect schedules. Phantom loads appear as a baseline of consumption during hours when no one is actively using anything in the home.

On a Smart Meter Texas interval chart, a consistently elevated reading between midnight and 5 a.m. is a practical indicator that phantom loads may be significant.

Pool Filtration Turnover

The volume of water that a pool pump circulates through the filter over a set period, typically expressed as the number of full pool-volume cycles completed per day. Adequate turnover is the practical goal of running a pump; once the required daily volume has passed through the filter, additional run time does not meaningfully improve water quality and only adds electricity cost. Turnover requirements vary by pool volume, bather load, and ambient temperature.

A properly maintained pool under 15,000 gallons often achieves adequate turnover in six hours rather than the commonly assumed eight, reducing monthly pump electricity use by roughly 25 percent.

Power Outage

An interruption in electrical service caused by a fault, equipment failure, or physical damage on the TDU's distribution or transmission network. In Texas's deregulated market, outages are always reported to and resolved by the TDU—not the retail electric provider—because the TDU owns and operates the physical wires regardless of which REP is billing the customer.

Switching providers does not change the outage reporting process; the same TDU emergency number applies before and after a switch.

Pre-Cooling

A demand-shifting strategy in which a home's air conditioning system is run more intensively before an on-peak pricing window begins, cooling the indoor space to a lower temperature so the system can run less — or not at all — during the more expensive peak hours. Pre-cooling works best when paired with a programmable or smart thermostat and a well-insulated building envelope.

A household on a TOU plan might pre-cool to 70°F before 3 p.m. and allow the temperature to drift to 76°F by 8 p.m., reducing expensive on-peak air-conditioning runtime.

Programmable Thermostat

A thermostat that lets you set different temperature targets for different times of day or days of the week, so heating and cooling adjustments happen automatically without manual changes. Unlike a basic thermostat, it follows a schedule you program once — for example, raising the cooling setpoint while you are at work and lowering it before you return home.

A smart thermostat is a type of programmable thermostat that also connects to Wi-Fi, learns your preferences, and can receive signals from a utility or retail electric provider during demand response events.

R-Value

A measure of how well a building material resists heat flow — the higher the number, the better the insulation. In Texas, the recommended attic insulation level is R-38 to R-60 depending on climate zone. Homes built before 1990 often have R-11 or less, meaning a significant amount of heat moves through the ceiling and into the living space during summer.

Adding blown-in insulation to bring an attic from R-11 to R-38 typically costs $1,500–$2,500 for a 1,500-square-foot attic and can cut cooling costs by 15–20 percent.

Source: ENERGY STAR

Refrigerant

A chemical fluid that circulates through an air conditioner or heat pump, absorbing heat indoors and releasing it outside. When the refrigerant level is low — often due to a leak — the system must run longer to cool a space, increasing electricity consumption significantly.

A technician who finds a low refrigerant charge will typically locate and repair the leak before recharging the system, since simply topping it off without fixing the leak is both wasteful and, for many modern refrigerants, regulated.

Remote Room Sensor

A small, battery-powered sensor placed in a room away from the main thermostat that reports local temperature and sometimes occupancy data back to the thermostat. The thermostat can then average readings across multiple sensors or prioritize occupied rooms when setting the cooling target.

In a two-story Texas home where upper floors run several degrees hotter than the main floor, a remote room sensor on the upper level allows the thermostat to account for that difference rather than relying solely on a reading from one location.

Residential Energy Consumption Survey RECS

A periodic national survey conducted by the U.S. Energy Information Administration (EIA) that collects data on how American households use energy. It covers appliance ownership, home characteristics, fuel types, and energy expenditures, and is widely cited as the authoritative source for residential electricity consumption patterns.

Source: U.S. Energy Information Administration

Resistance Heating

A method of generating heat by passing electricity through a resistive element, which converts electrical energy to heat at a 1-to-1 ratio. Unlike a heat pump, it does not move heat from outside air but creates it directly, making it significantly less efficient and more expensive to operate per unit of heat delivered.

Resistance heating is common in older Texas homes and many apartments, and it is often the backup heating mode on heat-pump systems during very cold weather — a key reason winter electricity bills can spike sharply.

SEER Rating SEER

A standardized measure of air conditioner efficiency, calculated as total cooling output over a typical season divided by total electrical energy consumed. Higher SEER values mean less electricity is used to move the same amount of heat — a 20-SEER unit costs less to run than a 14-SEER unit doing identical work. Federal minimum standards require 14 SEER for new central air conditioners installed in the South.

A system below SEER 14 consumes noticeably more electricity per degree of cooling, which shows up directly in summer bills even if usage habits and rates stay constant.

Source: U.S. Department of Energy

Setpoint

The target indoor temperature programmed into a thermostat, at which the heating or cooling system turns off. The system runs whenever the measured indoor temperature diverges from this target by more than a small margin.

Raising a cooling setpoint from 72°F to 78°F reduces how often the air conditioner runs, which directly lowers electricity consumption during the hours the higher setpoint is active.

Source: U.S. Department of Energy – Energy Saver

Short-Cycling

A condition in which an air conditioner or heat pump turns on and off in rapid, abnormally brief cycles rather than running for sustained periods. It typically indicates the system is oversized for the space it serves, and it reduces efficiency, increases wear on equipment, and can leave humidity poorly controlled.

Single-Speed Pool Pump

A pool circulation pump that runs at one fixed motor speed, typically full power, regardless of the filtration task at hand. Because it cannot slow down for lighter-duty cycles, it consumes substantially more electricity than variable-speed alternatives and is a notable contributor to high summer bills in Texas homes with pools.

Replacing a single-speed pump with a variable-speed model is one of the higher-return efficiency upgrades available to Texas pool owners, often saving 70–80% of the pump's prior energy use.

Smart Thermostat

A thermostat that connects to a home network and can automatically adjust heating and cooling setpoints based on a programmed schedule, occupancy sensors, or remote commands from a smartphone app. Unlike a basic programmable thermostat, a smart thermostat can learn household patterns and respond to utility demand-response signals. Studies by device manufacturers report average cooling savings of 10–15 percent compared to homes without scheduled setbacks.

Many smart thermostats qualify for a federal tax credit and utility rebates, reducing the effective upfront cost of a $150–$250 device.

Standby Generator

A permanently wired backup power system, typically fueled by natural gas or propane, that detects a grid outage and starts automatically within seconds. Unlike a portable generator, a standby unit connects directly to the home's electrical panel through an automatic transfer switch and can run indefinitely as long as fuel supply continues.

A whole-home standby generator sized for a typical Texas house generally ranges from 10 to 22 kilowatts and requires an annual maintenance inspection to stay reliable.

Temperature Setback

A deliberate increase in the cooling setpoint — or decrease in the heating setpoint — during periods when full comfort conditioning is not needed, such as when occupants are away or asleep. Each degree of setback reduces the runtime of the heating or cooling equipment and lowers the associated electricity use.

For example, raising a thermostat from 78°F to 85°F while the house is unoccupied is a 7-degree cooling setback.

Thermal Mass

The ability of a building's materials — walls, floors, furniture, and contents — to absorb, store, and slowly release heat. A home with high thermal mass stays warmer longer after the heating system stops running, which is relevant during power outages in cold weather.

Pre-warming a home to 70–72°F before a forecasted outage takes advantage of thermal mass, potentially keeping interior temperatures above dangerous thresholds for several hours without any active heating.

Ton (Cooling Capacity)

A unit expressing the cooling output of an air conditioner or heat pump; one ton equals 12,000 British thermal units (BTUs) of heat removed per hour. Residential central AC systems in Texas are commonly sized between 2 and 5 tons. A higher ton rating generally means greater electricity draw, which is why central AC is the largest single contributor to monthly kWh consumption in most Texas households.

A 3-ton central air conditioner removes 36,000 BTUs of heat per hour and typically draws 3,000 to 3,600 watts of electricity while running.

Vampire Load

Electricity consumed by devices that remain plugged in but are not actively in use — such as televisions, game consoles, cable boxes, and phone chargers in standby mode. The Lawrence Berkeley National Laboratory estimates vampire loads account for 5–10 percent of a typical home's electricity use. Smart power strips can eliminate most of this waste automatically.

Variable-Speed Pump VSP

A pool pump that uses a permanent-magnet motor capable of operating at a range of speeds rather than one fixed speed. Because electrical power consumption falls sharply as motor speed decreases, a VSP can complete the same daily water filtration as a single-speed pump while using 50–75 percent less electricity. Owners set the speed to the lowest level that achieves adequate daily water turnover.

A VSP running at half speed to filter the same daily volume as a 1.5 hp single-speed pump typically draws 200–300 kWh per month instead of 400–500 kWh.

Volt V

A volt measures the electrical pressure that pushes current through your wires. Standard outlets in Texas homes run at about 120 volts; large appliances like a dryer or electric range use 240 volts.

Voltage is the push, current (measured in amps) is the flow, and power (watts) is what you get when you multiply them together.

Related: Watt , Ampere

Watt W

A watt is the basic unit of electric power. It tells you how much electricity a device draws while it's on. The higher the wattage, the more energy a device burns and the more it adds to your bill.

An LED bulb might use 9 watts; an old incandescent used 60. A thousand watts equals one kilowatt, the size used to price your electricity.

Weatherstripping

Flexible sealing material applied around the edges of doors and windows to block drafts and prevent conditioned air from escaping. Reducing air infiltration lowers the amount of work a heating or cooling system must do, directly cutting electricity consumption.

Weatherstripping an exterior door typically costs $10–$30 in materials and is one of the highest-return, lowest-cost efficiency upgrades available to renters and homeowners alike.

Rates & Pricing

Plan types and how to compare what you’ll actually pay.

Advertised Rate at 500 / 1,000 / 2,000 kWh

Texas requires every plan to disclose its average price at three fixed usage points — 500, 1,000, and 2,000 kWh per month — on the Electricity Facts Label. This lets you compare plans on equal footing instead of trusting a single advertised number.

The 1,000 kWh figure is the one most often advertised, but if your home uses 600 or 1,800 kWh, that number can mislead you. Find the column closest to your real usage before you judge a plan.

Source: Public Utility Commission of Texas

All-In Price

What you truly pay per kilowatt-hour once everything is counted — the energy charge, any monthly base fee, bill credits, and the TDU delivery charges your retailer passes through. It's the only price worth comparing across plans.

A plan can show a tiny energy rate and still cost more than a rival once a $9.95 monthly fee and delivery charges get added in. On the Electricity Facts Label, the all-in number is the "average price per kWh" at each usage level.

Source: Power to Choose (PUCT)

All-In Rate

The true average cost per kilowatt-hour a customer pays after combining every charge on the bill — the energy supply charge, the TDU delivery charge, and any fixed monthly fees — then dividing by total kWh used. It is a more accurate measure of plan cost than the advertised rate, which often excludes delivery fees or applies only at a specific usage level.

For example, a plan advertised at 11 cents per kWh may have a $9.95 monthly base charge that raises the all-in rate to 13 cents per kWh for a household using 500 kWh.

Average Price per kWh

The all-in price you actually pay per kilowatt-hour at a given usage level — energy charge, base fees, bill credits, and TDU delivery charges rolled together, then divided by the kilowatt-hours used. It's the honest number to compare plans by, not the headline energy rate.

Because monthly fees and bill credits get spread across your usage, the average price changes with how much you use. That's why the Electricity Facts Label shows it at 500, 1,000, and 2,000 kWh.

Source: Power to Choose (PUCT)

Base Charge / Monthly Service Fee

A flat dollar amount the retailer adds every billing cycle no matter how much you use — sometimes called a base charge, monthly service fee, or minimum-usage fee. It quietly raises your real cost per kWh, especially in low-usage months.

A $9.95 monthly fee barely moves the needle at 2,000 kWh but stings at 400 kWh, where it can add two or three cents per kWh. Some plans flip it into a penalty: use under, say, 1,000 kWh and they tack on a $9.95 charge.

Source: Public Utility Commission of Texas

Bill-Credit Cliff

A pricing phenomenon in certain electricity plans where a bill credit triggers only when usage reaches a specific threshold, such as 1,000 kWh. Households that fall even slightly below that threshold receive no credit and end up paying a sharply higher effective rate than the advertised price implies.

A plan might advertise 10 cents per kWh at 1,000 kWh but effectively charge 18 cents per kWh at 600 kWh because the $80 bill credit never activates.

Blended Rate

The single average price per kilowatt-hour a customer actually pays across an entire billing period, calculated by combining usage and charges from multiple pricing tiers — such as on-peak and off-peak periods on a time-of-use plan — into one weighted average. The blended rate is the most accurate number to compare against a flat-rate plan's advertised price.

If a household uses 70% of its electricity at 9 cents and 30% at 20 cents, its blended rate is roughly 12.3 cents per kWh.

Commercial Rate

The average price per kilowatt-hour charged to business customers, as distinct from the residential or industrial rate. In Texas, commercial rates are generally lower than residential rates because business accounts tend to have higher total consumption and more predictable usage patterns, which lowers fixed costs per kWh and reduces wholesale hedging risk for suppliers.

Source: EIA Electric Power Monthly

Contractual Price Cap

A provider-imposed ceiling written into an indexed or variable electricity plan that limits the maximum rate a customer can be charged per kilowatt-hour, even if the wholesale market price rises above that level. Not all indexed plans include one. Plans without a contractual price cap expose the customer to theoretically unlimited per-unit costs during extreme grid events.

The presence or absence of a contractual price cap must be disclosed on the plan's Electricity Facts Label.

Credit Cap

A limit placed by a retail electric provider on the amount of export credits a solar customer can earn in a single billing period, expressed either as a maximum dollar amount or a maximum number of kilowatt-hours. Once the cap is reached, additional exports earn no further credit for that month. Households with larger solar arrays should check for credit caps before enrolling.

Critical Peak Pricing CPP

A pricing structure layered on top of a time-of-use plan in which a provider can declare a limited number of 'critical peak' events — typically on the hottest or most grid-stressed days of the year — during which electricity rates spike significantly above normal on-peak rates for a set number of hours. Customers who reduce usage during those events may receive bill credits; customers who do not respond pay the elevated rate.

A Texas CPP plan might allow a provider to call up to 10 events per summer, each lasting four hours, at a rate of 50 cents per kWh.

Daily Customer Charge

A flat fee charged by prepaid electricity providers each calendar day, regardless of how much power is consumed. It appears as a separate line on the Electricity Facts Label (EFL) and must be factored into the total cost comparison alongside the per-kWh energy charge.

A daily customer charge of $0.50 adds roughly $15 to a monthly bill before a single kilowatt-hour is counted — functionally equivalent to a monthly base charge on postpaid plans but expressed in daily increments.

Demand Charge

A fee on a commercial or industrial electricity bill based on the customer's highest rate of power draw — measured in kilowatts — during any short interval (typically 15 minutes) within the billing period. It is expressed as a dollar amount per kW of that recorded peak, regardless of how briefly the peak occurred or how modest total consumption was the rest of the month.

For example, a business that spikes to 22 kW for a single 15-minute window in July could owe a demand charge of 22 kW × $10/kW = $220, even if its overall usage that month was low.

Source: U.S. Energy Information Administration

Demand Shaving

Strategies or technologies used to reduce the highest interval of power draw during a billing period, with the goal of lowering the demand charge component of a commercial electricity bill. Common methods include staggering equipment startups, scheduling energy-intensive processes during off-peak periods, and deploying battery storage to supply power during momentary spikes.

Direct Wholesale Pass-Through

A billing arrangement in which a retail provider charges customers the actual real-time wholesale market price for each unit of electricity consumed, with little or no markup on the energy component. The provider earns revenue through a separate administrative or subscription fee rather than a margin built into the energy rate. This structure exposes customers fully to wholesale price volatility.

Griddy, the Texas provider that became widely known after Winter Storm Uri in February 2021, used a direct wholesale pass-through model.

Effective Rate

Your actual cost per kilowatt-hour calculated by dividing your total electricity bill — including all energy charges, delivery fees, base charges, and taxes — by the total kWh you used that month. It is the only figure that allows an apples-to-apples comparison between plans with different fee structures.

For example, a bill of $148 for 1,100 kWh works out to an effective rate of roughly 13.5 cents per kWh, which may differ significantly from the headline energy-charge rate advertised by the provider.

EV Bill Credit

A fixed monthly dollar credit applied to a utility or retail electricity bill as a benefit for verified electric vehicle ownership. The credit is separate from time-of-use or free nights pricing and provides a predictable but capped savings amount regardless of when or how much the vehicle is charged.

A $25 monthly EV bill credit saves $300 per year at most, which is generally less than the savings achievable by shifting charging to off-peak hours on a free nights or TOU plan.

EV Charging Rate

The price per kilowatt-hour a household pays to charge an electric vehicle at home, determined by the electricity plan and the time of day charging occurs. Because EVs add a large, schedulable load, the chosen plan type and charging window have an outsized effect on total electricity costs compared to most other appliances.

For example, a driver charging a 75 kWh battery overnight on a free nights plan pays effectively $0 for that session, while the same charge during a weekday afternoon on-peak period might cost $15 or more.

Export Credit Rate

The per-kilowatt-hour rate a retail electric provider pays a solar customer for electricity sent back to the grid. This rate is disclosed in the Electricity Facts Label and may be set at retail, below retail, or indexed to wholesale market prices. It is the single most important number to compare when choosing a solar buyback plan.

Fixed-Rate Plan

A plan that locks your energy price per kilowatt-hour for the whole contract term, so the rate can't jump month to month. Most fixed-rate plans in Texas run 12, 24, or 36 months.

Your bill still rises and falls with how much you use, and the TDU delivery charges your retailer passes through can shift, but the energy rate the retailer charges stays put. It's the most predictable option for budgeting.

Source: Power to Choose (PUCT)

Flat-Rate Plan

An electricity pricing structure in which the energy charge is the same per kWh regardless of how much electricity a customer uses in a given month. Flat-rate plans contrast with tiered or bill-credit plans, which apply a different effective rate once usage crosses a threshold. Most fixed-rate contracts in the Texas retail market are priced on a flat-rate basis.

Forward Contract

An agreement to buy or sell electricity at a fixed price for delivery on a future date. Retail providers use forward contracts to lock in their cost of summer supply months in advance, which is what allows them to offer fixed-rate plans—the summer risk premium is already built into the contracted price.

Free Nights / Weekends Plan

A time-of-use plan that gives away electricity during set hours — overnight, on weekends, or both — but charges a higher rate the rest of the time to make up for it. "Free" only applies inside the marketed window.

The daytime rate usually runs well above average, so these plans favor people who use most of their power when it's free — night-shift workers, EV owners charging at 2 a.m., or families who run the AC hard on Saturdays. Run the math against your real schedule.

Source: Power to Choose (PUCT)

Hedging

A financial strategy in which a retail electricity provider locks in future electricity costs — typically through forward contracts or other instruments — to reduce exposure to volatile spot market prices. The cost of hedging is reflected in the fixed rates providers offer customers.

A provider that hedges aggressively during a period of high wholesale prices will pass those elevated costs through to customers as higher fixed rates.

Holdover Rate

The variable, month-to-month price per kWh a retail electricity provider charges a customer whose fixed-rate contract has expired without a new agreement in place. Providers are not required to cap this rate, and it is typically higher than the rate the customer was paying under their prior contract. The holdover terms must be disclosed in the plan's Electricity Facts Label.

For example, a customer who locked in at 11.5 cents/kWh under a 12-month plan may find themselves paying 16–19 cents/kWh on a holdover rate the following summer if they did not renew.

Indexed Commercial Plan

A small business electricity contract in which the energy supply price floats in proportion to a published wholesale market index — such as ERCOT real-time or day-ahead settlement prices — rather than being locked at a fixed rate. This structure can deliver savings when wholesale prices are low but exposes the business to significant cost spikes during grid stress events.

During Winter Storm Uri in February 2021, businesses on wholesale-indexed plans saw bills spike dramatically as ERCOT spot prices hit the market cap for several consecutive days.

Indexed Plan

A plan where your price per kWh is tied to a published formula — usually a natural-gas index or a wholesale market price — so it moves with that benchmark instead of staying fixed. The retailer must spell out the formula in the contract.

An indexed plan differs from a plain variable plan because the price isn't set at the retailer's discretion; it's calculated from an outside number. You still carry the risk that the index spikes when wholesale power gets expensive.

Source: Public Utility Commission of Texas

Load Shifting

Moving discretionary electricity consumption — laundry, dishwashers, EV charging — from high-cost peak hours to lower-cost off-peak windows. Load shifting is the core behavioral strategy for capturing savings on time-of-use and free nights/weekends plans; households that cannot shift usage often save more on a flat-rate plan.

Running a dishwasher at midnight instead of 7 p.m. on a free-nights plan costs nothing for that load rather than the full daytime rate.

Mid-Peak Period

A time-of-use pricing window that falls between off-peak and on-peak hours, carrying a rate lower than on-peak but higher than off-peak. Not all time-of-use plans include a mid-peak tier; some use only two periods, but three-tier structures are common in Texas TOU offerings.

On-Peak / Off-Peak Period

Time windows defined in a time-of-use electricity plan during which electricity is priced differently based on grid demand. On-peak periods—typically weekday afternoons from around 3 p.m. to 8 p.m.—carry a higher per-kWh rate, while off-peak hours carry a lower rate. Shifting discretionary loads such as laundry, dishwashers, and device charging to off-peak windows is the primary strategy for reducing costs on a TOU plan.

Pass-Through Transmission Plan

A commercial electricity contract structure in which the retail electric provider charges the customer the actual transmission costs incurred, including those driven by four coincident peak performance, rather than absorbing that variability into a fixed rate. Under this structure, the customer bears the financial risk of high demand during grid peak hours and directly benefits from active demand curtailment.

Peak Demand Interval

The single highest average power draw, measured in kilowatts, recorded within any one measurement window — typically 15 or 30 minutes — during a billing period. This single interval is used to calculate the demand charge on a commercial electricity bill, regardless of how briefly or infrequently the peak occurred.

Because one brief equipment startup can set the peak for the entire month, demand management strategies focus on preventing multiple large loads from running simultaneously even for short periods.

Prepaid (Pay-As-You-Go) Plan

A plan where you pay for electricity before you use it and draw down a balance, instead of getting a bill at the end of the month. Most prepaid plans skip the credit check and deposit, which is why credit-challenged Texans often start here.

Prepaid service requires a smart meter, which reports your usage daily and lets the retailer send low-balance alerts. Run the balance to zero and service can be cut off fast — though Texas rules block disconnection on weekends, on holidays, and during extreme heat or cold. The trade-off for no deposit is the risk of running dry.

Source: Public Utility Commission of Texas

Pricing Risk

The possibility that electricity costs will rise or fall unexpectedly, affecting either the provider's profit margin or the customer's monthly bill depending on which party has locked in a price. Under a fixed-rate contract the customer transfers pricing risk to the provider; under a variable or month-to-month plan the customer retains that risk. Providers typically charge a premium on shorter-term plans to compensate for the greater pricing risk they absorb.

Rate Class

A category that a utility uses to group customers with similar usage characteristics — such as residential, small commercial, or large industrial — and to apply a uniform tariff schedule to all customers within that group. Customers in the same rate class in the same rate zone pay identical TDU delivery charges, regardless of which retail provider they have chosen.

Rate Zone

A geographic division within a TDU's service territory that carries its own PUCT-approved set of delivery tariffs, including distinct fixed customer charges and per-kWh distribution rates. Customers in different rate zones served by the same TDU can face meaningfully different delivery costs, which affects the all-in price of any retail electricity plan.

AEP Texas, for instance, operates two rate zones — AEP Central and AEP North — so a plan that is competitively priced in Corpus Christi may not be competitively priced in Abilene.

Rate-Decline Environment

A market condition in which wholesale electricity prices are trending downward, causing newly offered retail fixed-rate plans to become cheaper over successive weeks or months. Consumers who recognize this environment may stay on a flexible plan temporarily to lock in a lower fixed rate once prices stabilize. The direction of wholesale natural gas prices is often a leading signal in Texas.

Real-Time Price Alert

A notification—typically sent by a retail provider via text message or app—that warns a customer when wholesale electricity prices cross a defined threshold. These alerts give households on indexed plans a practical opportunity to reduce or shift consumption before a high-price period runs long and significantly raises their bill.

Real-Time Pricing RTP

A retail electricity pricing structure in which the rate you pay for each unit of electricity changes continuously—often every hour or every five minutes—to reflect actual wholesale market prices at that moment. Unlike a fixed-rate plan, there is no locked price protecting you from market swings. Costs can fall well below average rates during low-demand periods but can spike dramatically when the grid is under stress.

In Texas, real-time pricing plans typically use ERCOT's five-minute or hourly settlement prices as the basis for calculating your energy charge.

Source: ERCOT Market Prices

Repricing Risk

The financial exposure a customer faces when a fixed-rate electricity contract expires and the replacement rate—whether through automatic renewal or a new plan—may be significantly higher than the original rate. Shorter contract terms increase this exposure because the renewal window arrives sooner.

Risk Premium

An extra cost embedded in a retail electricity rate to compensate the provider for taking on uncertainty — such as the chance that wholesale prices will spike during extreme weather. When providers perceive higher risk, they build a larger buffer into the fixed rates they quote customers.

After Winter Storm Uri in 2021, many Texas providers added a winter risk premium to plans sold during cold months, raising quoted rates above what underlying wholesale prices alone would justify.

Seasonal Rate Timing

The practice of enrolling in a fixed-rate electricity plan during periods of lower wholesale demand — typically fall or early spring — to capture rates set before summer price peaks. Because retail providers price fixed plans based on forward wholesale costs, plans offered in lower-demand months often carry lower locked-in rates than those offered at the height of summer.

For example, a plan signed in October may lock in a rate several cents per kWh lower than a comparable plan offered in July, when ERCOT demand and wholesale prices are at their highest.

Service Voltage

The voltage level at which a utility delivers electricity to a customer's premises. Larger commercial and industrial customers often receive power at higher voltages, which reduces transmission losses and typically qualifies them for different utility rate classes than standard low-voltage service.

A manufacturer receiving electricity at primary voltage may pay lower per-kWh delivery charges than a small retailer served at standard secondary voltage, because the customer takes on some transformation costs internally.

Shoulder Season

The periods between a region's peak demand seasons — in Texas, roughly February through April and October through November — when electricity demand and wholesale prices are relatively low. Retail providers face less pricing pressure during these windows, so fixed-rate plans tend to be more competitively priced.

A customer whose contract expires in October is naturally positioned in the fall shoulder season, an advantageous time to shop for a new fixed-rate plan.

Super-Peak Period

A third pricing tier used in some time-of-use electricity plans that carries a higher rate than the standard on-peak period, activated only during the most grid-stressed hours — typically mid-afternoon on the hottest summer or coldest winter days. Not all TOU plans include a super-peak tier; its existence and rate must be disclosed on the Electricity Facts Label.

Teaser Rate

A low headline price built to win the click or the sign-up, then propped up by conditions you might not notice — a bill credit you have to hit, a short intro period, or a usage level you don't actually match. The number you see isn't the number most people pay.

A plan can advertise a rock-bottom rate at 1,000 kWh because that's exactly where a bill credit lands, while the price at 500 or 2,000 kWh runs far higher. The teaser is the bait; the Electricity Facts Label is where the truth lives.

Source: Power to Choose (PUCT)

Tiered / Bill-Credit Plan

A plan that hands you a flat dollar credit only if your monthly usage lands inside a set window — say, a $100 credit for using between 1,000 and 2,000 kWh. Hit the target and the effective rate looks great; miss it and the credit vanishes.

These plans advertise a low average price at exactly the usage level where the credit kicks in. Use a little less and you lose the whole credit, so a 950 kWh month can cost more than a 1,050 kWh month.

Source: Power to Choose (PUCT)

Tiered Pricing

A supply rate structure in which the per-kWh price changes once your monthly usage crosses one or more defined thresholds, commonly 500 kWh or 1,000 kWh. Usage below the threshold is priced at one rate; usage above it is priced at a different rate, which may be higher or lower depending on the plan design.

Tiered pricing can make a plan look inexpensive at advertised usage levels while costing significantly more or less at your actual consumption — always check the EFL at your typical monthly kWh.

Time-of-Use Plan TOU

A plan that charges different per-kWh prices at different times of day — a higher rate during peak hours (often weekday afternoons and evenings) and a lower rate off-peak. It rewards you for shifting heavy use, like laundry or EV charging, to cheaper hours.

Your smart meter records when you pull power, so the retailer can bill by time block. These plans only pay off if you can actually move your usage; if your big loads run during peak, you'll pay more.

Source: Public Utility Commission of Texas

Usage Gimmick / Cliff

A plan design where your cost per kWh jumps sharply once your usage crosses a hidden threshold — the "cliff." It's how a plan can show a low advertised price at 1,000 kWh while charging far more if you use 999 or 1,200.

The classic version is a bill credit that disappears below a usage line. Always check the Electricity Facts Label at all three usage points; a big gap between the 500 and 1,000 kWh prices is the warning sign.

Source: Power to Choose (PUCT)

Usage Tier Penalty

A higher per-kWh rate that activates once monthly consumption exceeds a specified ceiling, such as 2,000 or 3,000 kWh. The inverse of a minimum usage fee, it targets high-consumption months rather than low ones, and most commonly appears in wholesale-indexed and budget plans. The threshold and elevated rate must be disclosed on the Electricity Facts Label and in the Terms of Service.

A household running central air conditioning heavily in August may unknowingly cross a 2,000 kWh ceiling and trigger a surcharge rate on every additional kWh for that billing period.

Variable-Rate Plan

A plan with no locked price — the retailer can raise or lower your per-kWh rate from one billing cycle to the next. There's usually no contract and no early termination fee, so you can leave anytime.

The danger is the price spike. Many Texans land on a variable rate when a fixed contract ends, then watch the rate climb sharply in summer. The freedom to switch is the trade-off for that risk.

Source: Power to Choose (PUCT)

Volumetric Charge

Any electricity charge that scales directly with the number of kilowatt-hours a customer consumes in a billing period, as opposed to a flat monthly fee that is the same regardless of usage. Both the energy charge from a REP and the per-kWh TDU delivery charge are volumetric charges.

Because volumetric charges rise and fall with consumption, customers who use less electricity in mild-weather months will see these line items shrink, while flat base charges remain constant.

Your Bill & Charges

Every line item on your Texas electric bill, explained.

All Bills Paid

A rental arrangement in which the cost of electricity (and sometimes other utilities) is bundled into the monthly rent payment. The tenant has no separate utility account and no ability to shop for a lower electricity rate. The landlord bears the cost and the usage risk directly.

Appliance Payback Calculation

A method for estimating how many years it takes for the energy savings from a new, more efficient appliance to offset its purchase price. Divide the upfront cost by the annual dollar savings to get the payback period in years. A shorter payback period relative to the appliance's expected lifespan makes the upgrade more financially attractive.

Example: a $900 refrigerator saving $120 per year has a payback period of 7.5 years; if the appliance is expected to last 15 years, the household comes out ahead.

Autopay

A billing arrangement in which a customer authorizes their Retail Electric Provider to automatically withdraw the amount owed from a bank account or charge a payment card on each bill's due date. Autopay eliminates the risk of a late payment and is one of the most reliable ways to build a clean 12-month payment record for deposit refund eligibility.

Average (Budget) Billing

A billing option that smooths your payment to a steady monthly amount instead of letting it spike in a hot Texas August. Your provider averages your usage over the past year so winter and summer even out.

You still pay for every kWh you use; the bill is just spread out. Providers true up the difference periodically, so a hotter-than-usual year can leave a balance to settle. It helps with budgeting, not with using less.

Related: Energy (Supply) Charge

Source: Public Utility Commission of Texas

Bill Shock

The experience of receiving an unexpectedly large electricity bill, most often caused by extreme weather driving high consumption, a variable-rate plan that spiked in a high-price period, or a usage-tier penalty triggered at a billing cliff. It is one of the most common complaints filed with the PUCT and a frequent driver of mid-contract provider switches.

Billing Cycle

The recurring period, typically around 30 days, during which a customer's electricity consumption is measured and for which a single invoice is issued. In Texas, the billing cycle is anchored to the TDU's scheduled meter read dates, so the exact number of days can vary slightly from month to month.

Billing Dispute

A formal disagreement between a customer and a retail electric provider over charges, amounts, or date ranges on an electricity invoice. Under PUCT retail market rules (16 TAC § 25.480), REPs are required to investigate and resolve billing disputes within a defined timeframe; unresolved cases can be escalated to the PUCT.

Consumption Profile

A breakdown of a household's electricity use by time of day, day of week, or season, showing when and how much energy is consumed. Knowing your consumption profile is essential for evaluating time-varying plans, because savings depend on how much usage can shift to lower-rate periods.

A household whose consumption is heavily concentrated in weekday afternoons will often pay more on a free nights plan than on a flat-rate plan, even if it charges an EV overnight.

Deferred Balance

The running total of the difference between what a customer actually owes each month and what they paid under an average billing program. A positive deferred balance means the customer owes more than they have paid; a negative balance means the provider holds a credit on the customer's behalf. The balance is settled at a scheduled true-up date, typically once per year.

For example, if your installment is $163 but your actual charge in August is $220, the $57 difference is added to your deferred balance that month.

Deferred Payment Plan DPP

An arrangement that lets you split a past-due balance into installments instead of paying it all at once, so you can keep your service on. In Texas, providers must offer one in certain situations, like an underbilling of $50 or more or bills that came due during a declared extreme-weather emergency.

You pay your current bills plus a piece of the old balance each month until it's cleared. The provider can place a switch-hold on your account until you finish paying, which stops you from moving to a new provider in the meantime.

Source: Public Utility Commission of Texas

Deposit Cap

The legal ceiling on the amount a Retail Electric Provider in Texas may collect as a security deposit from a residential customer. Under PUCT Rule 25.478, the cap is set at one-fifth of the customer's estimated annual electricity bill, equivalent to roughly 2.4 months of typical charges.

Deposit Interest

Interest that a Retail Electric Provider is required by PUCT rules to pay on a residential security deposit for the entire time it is held. The interest rate is set annually by the Public Utility Commission of Texas. Both the original deposit and the accrued interest must be returned to the customer after 12 consecutive months of on-time payments or upon final account closure.

For 2024 the PUCT set the rate at 0.55 percent, meaning a $360 deposit would earn roughly $1.98 in interest over one year.

Source: PUCT Rule 16 TAC §25.478

Deposit Refund

The return of a security deposit — plus any accrued interest — that a retail electric provider is required by PUCT rule to issue once a customer becomes eligible, typically after establishing a satisfactory payment history over a defined period. Providers must issue the refund within 30 days of the customer meeting the eligibility criteria.

Disconnection for Non-Payment

When you fall far enough behind on payment, your provider can have your electricity shut off. Texas rules require a separate written notice with a disconnect date at least 10 days out, and you can avoid it by paying or setting up an arrangement first.

Texas bars disconnection on weekends, holidays, and the day before one (unless the provider can take payment and reconnect), and during a declared extreme-heat or extreme-cold weather emergency in your area. Households with a qualifying serious medical condition can get extra protection. If you're at risk, call your provider before the date on the notice.

Source: Public Utility Commission of Texas

Disconnection Notice

A written notice a retail electric provider must deliver to a residential customer at least 10 days before the scheduled date of service disconnection for nonpayment. Under PUCT rules, it must state the disconnection date, the amount owed, and instructions for avoiding shutoff, including available payment arrangements.

For example, if your provider mails a disconnection notice on June 1, the earliest lawful shutoff date is June 11.

Source: PUCT Substantive Rule 25.483

Distribution Charge

A regulated fee that a Transmission and Distribution Utility (TDU) charges to move electricity along the local low-voltage wires from a substation to homes and businesses. It typically has two parts: a fixed monthly customer charge and a variable per-kWh charge that scales with how much electricity the customer uses. Because it is set by the Public Utility Commission and not by the retail provider, no REP can reduce it.

For example, an AEP Texas customer who uses 1,000 kWh in a month pays the same distribution charge as every other AEP Texas residential customer in the same rate zone, regardless of which retail provider they chose.

Source: Public Utility Commission of Texas

Energy (Supply) Charge

The part of your bill you pay for the electricity itself, billed at your plan's per-kWh rate. This is the piece your retail provider competes on and the number you're choosing when you shop for a plan.

Use 1,000 kWh on a plan priced at 14 cents per kWh and the supply charge is about $140 before delivery charges and fees. Switch plans or providers and this is the part of the bill that changes.

Source: Power to Choose (PUCT)

Estimated Meter Read

A bill based on a guess of your usage rather than an actual reading from your meter, usually because the utility couldn't get a real read that cycle. Texas smart meters made this rare, but it still happens.

An estimate that runs high or low gets corrected on the next actual read, so your following bill may swing the other way. If estimates keep showing up, ask your provider or utility to check the meter.

Related: TDU Delivery Charge

Source: Public Utility Commission of Texas

Final Bill

The last invoice a departing retail electric provider issues when a customer switches providers, covering only the days between the previous regular billing date and the switch date. It is a partial-period charge and often arrives close in time to the new provider's first bill, which can mistakenly appear to be a duplicate charge.

If the date ranges on the two invoices overlap rather than abut, that is a billing error worth disputing with the PUCT.

Fixed Monthly Customer Charge

A flat fee that appears on your electricity bill every month regardless of how much electricity you use. It is set by the TDU through a PUCT-approved tariff and covers a share of the utility's fixed infrastructure costs. Because it does not vary with consumption, it raises the effective per-kWh cost for low-usage households more than for high-usage ones.

For example, Oncor's residential customer charge has been in the range of $3–$5 per month, applied to every customer in its territory no matter which REP they choose.

Source: Public Utility Commission of Texas

Fuel Cost Adjustment

A variable line item on an electricity bill that passes through changes in the cost of fuel used to generate power. Unlike a fixed energy charge, it can fluctuate from month to month as wholesale fuel prices rise or fall.

For example, a spike in natural gas prices may cause a provider to add or increase a fuel cost adjustment on residential bills for that billing period.

Generation Charge

A label some Retail Electric Providers use on bills or marketing materials for the supply portion of your electricity cost — the cost of the actual kilowatt-hours generated and delivered to the grid. It is the same underlying charge as the supply charge, priced in cents per kWh and set competitively by your chosen REP.

Because different providers label this charge differently (energy charge, generation charge, supply charge), the EFL is the most reliable place to identify and compare it across plans.

Source: Public Utility Commission of Texas

Late Payment Penalty

A fee your provider can add when you don't pay by the due date. In Texas, a provider may charge a one-time penalty of up to 5% of the past-due amount on a residential bill.

Your bill is due at least 16 days after it's issued. The penalty is one-time, applies to the unpaid balance rather than your whole account, and can't be charged again on that same balance. The exact terms are spelled out in your plan's Terms of Service.

Source: Public Utility Commission of Texas

Low-Balance Alert

A notification sent to a prepaid electricity customer when their account balance falls to a specified minimum threshold, warning that service will disconnect unless the account is replenished. PUCT Substantive Rule 25.498 requires prepaid providers to deliver at least one low-balance alert before any disconnection occurs.

Alerts are typically sent by text or email and often include an estimate of remaining days of service at the customer's current usage rate.

Master-Metered

A billing arrangement in which an entire multifamily property has a single utility meter registered in the landlord's name. The landlord pays the electricity bill and recovers that cost through rent, so individual tenants have no direct account with a retail provider and cannot shop for their own rate.

Common in older apartment buildings, master-metered units are often advertised as 'all bills paid.'

Meter Re-Read

A formal request by a customer — submitted through their retail electric provider — asking the transmission and distribution utility to physically inspect and record the actual meter register rather than rely on a previous estimate. Texas customers have a legal right to request a re-read when they believe a bill is based on incorrect estimated usage.

For example, if your bill shows 1,400 estimated kWh but your SmartMeterTexas data shows 900 kWh of actual consumption, a re-read request initiates the process to correct the discrepancy.

Minimum Monthly Charge

The lowest amount a customer must pay in a billing period regardless of how much electricity they consume or how many export credits they earn. Unlike a base charge, which is a fixed line item added to usage charges, a minimum monthly charge acts as a floor on the total bill. Solar customers should calculate whether their expected export credits exceed this floor before choosing a plan.

Minimum Usage Fee

A conditional charge added to a Texas electricity bill whenever monthly consumption falls below a specified threshold, typically 500 or 1,000 kWh. Unlike a flat base charge, it disappears in months when usage meets or exceeds the threshold. It must be disclosed on the Electricity Facts Label but is easy to overlook when comparing plans by advertised rate alone.

A plan advertised at 11.9 ¢/kWh at 1,000 kWh may carry an effective rate closer to 14–15 ¢/kWh at 500 kWh once a $9.95 minimum usage fee is factored in.

Monthly Installment

Under an average billing or budget billing program, the fixed dollar amount a customer pays each month, calculated by dividing the estimated annual electricity cost by 12. The installment is periodically recalculated — often every three to six months — to keep it aligned with actual usage and current rates.

Municipal Franchise Fee

A fee charged by a city or municipality to compensate it for allowing a utility to use public rights-of-way — such as streets and easements — to run power lines. The utility passes this cost through directly to customers on their bill, and the rate varies by municipality.

Because the fee is set by local government rather than the PUCT or your REP, neither switching providers nor negotiating with the utility will eliminate it.

Pass-Through Charges

Costs your retail provider collects on your bill but doesn't keep, like the TDU delivery charges or certain state and regulatory fees. They show up on your bill but the money goes to the utility or the state.

Because these are out of the provider's control, a plan's per-kWh rate may or may not include them. Always check whether a quoted price is 'all-in' or whether delivery charges and pass-throughs get added on top.

Source: Public Utility Commission of Texas

Payment Arrangement

A formal agreement between a residential electricity customer and their provider to pay an overdue balance in installments rather than all at once, thereby avoiding or halting disconnection. Under PUCT Substantive Rule 25.480, providers must offer a payment arrangement before disconnecting service for the first time in a 12-month period, and the arrangement must span at least six weeks.

Source: PUCT Substantive Rule 25.480

Prohibited Disconnection Days

Specific days on which Texas rules forbid residential electric providers from cutting off service for nonpayment, including Fridays, Saturdays, Sundays, state and federal holidays, the day before such holidays, and after 4:00 p.m. on any day when customer service will not be open the next business day. The rule ensures disconnected customers always have immediate access to a working customer service line.

Source: PUCT Substantive Rule 25.483

Recalculation Interval

The scheduled frequency — commonly every three or six months — at which a utility or provider recalculates a customer's average billing installment to account for differences between projected and actual usage or for rate changes. A recalculation that finds a growing deferred balance will raise the monthly installment going forward.

Reconnection Fee

What you pay to turn the lights back on after a disconnection for non-payment. The fee covers the utility's work to restore service plus any amount your provider adds, and you typically have to clear the past-due balance too.

With a Texas smart meter, reconnection is often remote and fast once you've paid, but the fee still applies. The amount is listed in your plan's Terms of Service.

Source: Public Utility Commission of Texas

Submetered

A billing arrangement in which a landlord holds one master meter with the utility but installs private submeters to measure each tenant's individual electricity consumption. The landlord pays the utility bill and then charges each tenant based on their unit's recorded usage. In Texas, this activity is regulated by the PUCT, which prohibits landlords from charging tenants more per kilowatt-hour than the landlord's own average rate.

Tenants in submetered buildings are entitled by PUCT rules to itemized bills and the right to request historical usage data.

Source: PUCT Substantive Rule 25.142

Submetering Administrative Fee

A charge a landlord operating a submetering system may add to a tenant's electricity bill to recover the cost of calculating and issuing individual usage bills. Under PUCT rules, this fee is only permitted if it is clearly disclosed in the lease, and it must be itemized separately from the usage charge on every bill.

Supply vs. Delivery on Your Bill

Your electric bill is built from two stacks: supply (the electricity you used, set by your retail plan) and delivery (moving it to your house, set by your local utility). Knowing which is which tells you what you can actually shop for and what's fixed.

Shopping for a cheaper plan only moves the supply side. The delivery side is the same for everyone in your utility's territory, so a quoted 'all-in' price already bakes delivery into the per-kWh number.

Source: Public Utility Commission of Texas

TDU Customer Charge

A fixed monthly fee set by the local transmission and distribution utility (TDU) and passed through on your electricity bill, regardless of usage or which retail electric provider you choose. It covers the TDU's costs for maintaining the connection to your home, such as meter infrastructure and account administration. Because the TDU is a regulated monopoly, this charge cannot be avoided by switching providers.

Source: Public Utility Commission of Texas

TDU Delivery Charge TDU

The part of your bill that pays to move electricity over the poles and wires to your home. It goes to your local utility (Oncor, CenterPoint, AEP Texas, or TNMP), not your retail provider, and it's the same no matter which plan you pick.

It has two pieces: a flat monthly meter fee (a few dollars) plus a per-kWh delivery rate. The PUCT approves these rates, so no retail provider can discount them. Your provider collects the charge on your bill and passes it straight to the utility.

Source: Public Utility Commission of Texas

Thin Credit History

A credit profile with too few accounts or too short a track record for a utility or lender to assess creditworthiness reliably. In Texas's retail electricity market, thin credit — distinct from bad credit — can trigger the same deposit requirements as a history of missed payments.

Recent graduates, new-to-U.S. residents, and anyone who has avoided debt products commonly have thin credit, making them candidates for prepaid service or deposit alternatives even if they have never missed a payment.

Transition Charge

A small fee that may appear on Texas electricity bills to allow utilities to recover costs from generation assets that became uneconomic when the state opened retail electricity to competition. These charges are authorized by the PUCT and decrease over time as the associated bonds or recovery periods mature.

Transmission Charge

A regulated fee on your electricity bill that covers the cost of moving power across high-voltage transmission lines from power plants to local distribution networks. It is set by the Transmission and Distribution Utility (TDU) and approved by the PUCT, not by your retail electric provider. Switching providers does not change this charge.

Transmission Cost Recovery Factor TCRF

A line item on a Texas commercial electricity bill that recovers the cost of maintaining and expanding the high-voltage transmission network. The charge is set by each TDU and approved by the PUCT through a tariff filing; it can change periodically as infrastructure costs shift. For commercial customers, the TCRF often reflects that customer's four coincident peak demand figure from the prior summer.

Source: Public Utility Commission of Texas

True-Up

A scheduled reconciliation, typically annual, in which a utility or retail electric provider settles the difference between what a customer paid under an average billing program and what they actually owed based on real consumption and applicable rates. If the customer underpaid, a balance-due amount is billed; if they overpaid, a credit or refund is issued.

A household that ran higher-than-projected usage all summer might receive a $350 true-up bill in November when the annual settlement is calculated.

Usage Credit (Bill Credit)

A dollar amount your provider knocks off your bill when your usage lands in a set range, often something like $30 to $100 off if you use between 1,000 and 2,000 kWh in a month. It's the mechanic behind many plans that advertise a stunningly low rate at exactly 1,000 kWh.

The catch is the cliff: use 999 kWh instead of 1,000 and the credit can vanish, so a small drop in usage spikes your effective rate. Read the Electricity Facts Label to find the exact thresholds before you sign up.

Source: Power to Choose (PUCT)

Utility Credit Database

A shared database some retail electric providers use to report and look up customers' past delinquencies with other electricity providers. An unpaid balance reported to this database can affect the deposit a new provider requires, even if no switch hold exists on the meter.

A customer who owes $200 to a former REP and never pays may find that the next REP consults this database and requires a higher deposit as a result.

Contracts & Documents

The paperwork that defines your plan — and your rights.

Automatic Renewal

When your fixed-term plan ends, your provider may automatically roll you onto a new plan or a month-to-month rate instead of cutting off your power. That new rate is often a higher, variable price.

Texas providers must send you a contract expiration notice at least 14 days before this happens. Read it, because the default month-to-month rate they move you to is usually much higher than what you'd find by shopping a new fixed plan.

Source: Public Utility Commission of Texas

Best-Rate Holdover Clause

An optional provision in some Texas electricity contracts that keeps the customer at or near their previous contract rate for a limited period — typically 30 to 60 days — after the contract expires, giving them time to shop for a new plan. This clause is uncommon and must be confirmed in the written Terms of Service before a customer relies on it.

Break-Even Period

The number of months a customer must remain on a new electricity plan before the accumulated monthly savings offset a one-time cost such as an early termination fee paid to exit the previous contract. If the break-even period exceeds the remaining contract length on the new plan, switching may not be financially worthwhile.

For example, a $150 early termination fee divided by $10 in monthly savings equals a 15-month break-even period.

Bridge Plan

A short-term electricity plan a customer enrolls in intentionally while comparing longer-term options, often after moving to a new address or exiting a prior contract. It prevents automatic enrollment in a provider's default service while the customer shops the market. A month-to-month plan is commonly used as a bridge plan.

A household closing on a new home might enroll in a bridge plan for one or two billing cycles before committing to a 12-month fixed-rate contract.

Co-signer / Guarantor

A creditworthy third party who agrees in writing to be financially responsible for a utility account if the primary customer fails to pay. Under PUCT rules, having an approved co-signer or guarantor entitles a residential customer to a deposit waiver, because the provider's credit risk is effectively transferred to the co-signer.

Commercial Electricity Facts Label

A standardized disclosure document required by the Public Utility Commission of Texas for retail electricity plans sold to commercial customers, analogous to the residential EFL. It discloses the plan's pricing components, contract length, early termination fees, and average rates at specified usage levels so businesses can make apples-to-apples comparisons across providers.

Unlike residential EFLs, which always show rates at 500, 1,000, and 2,000 kWh, commercial EFLs may present pricing differently depending on whether the plan includes a demand charge component.

Source: Public Utility Commission of Texas

Contract Expiration Notice

A written notice your provider must send at least 14 days before your fixed-term plan ends, telling you the contract is expiring and what happens next if you do nothing. Texas rules require it on every term contract.

Treat it as your cue to shop. The notice spells out the rate you'll roll onto, usually a higher month-to-month or holdover price, so you can lock in a new fixed plan before that kicks in. You can switch in the last 14 days of your term with no early termination fee.

Source: Public Utility Commission of Texas, Rule 25.475

Contract Renewal Notice

A written notification a retail electric provider is required by PUCT rules to send customers before their current contract term ends, informing them of the upcoming renewal date, any change in rate, and their right to switch providers or renegotiate terms. The notice gives customers a defined window to shop for better offers without defaulting into an automatic renewal at a potentially higher rate. Texas rules specify minimum notice periods for this disclosure.

Source: Public Utility Commission of Texas – 16 TAC §25.474

Contract Term Length

How long your plan locks in its price and terms, listed in months on the EFL. Common terms run 3, 6, 12, 24, or 36 months. With a fixed-rate plan, your energy rate holds for the whole term.

Leaving before the term ends usually triggers an early termination fee, unless you're inside the three-day cancellation window or you're moving out of the service area.

Source: Public Utility Commission of Texas

Early Termination Fee ETF

A charge your provider bills you for canceling a fixed-term plan before it ends. The amount is listed on your EFL and Terms of Service, often a flat fee like $150 or a charge per month remaining.

Texas rules waive the ETF if you cancel within the three-day right of rescission, if you're moving and give a forwarding address plus proof you no longer live at the address, or if you switch in the last 14 days of your term. Leaving early just to chase a cheaper rate does not waive it.

Source: Public Utility Commission of Texas

Electricity Facts Label EFL

A one-page, standardized disclosure every Texas retail electric provider must give you before you sign up. It spells out the average price per kilowatt-hour at 500, 1,000, and 2,000 kWh, the contract length, any fees, and whether the rate is fixed or variable.

The EFL is the document to actually compare plans on. Two plans can advertise the same headline rate, but the EFL shows the real average price at your usage level once the base charge and TDU delivery fees are baked in.

Source: Public Utility Commission of Texas

Fixed-Rate Contract

A plan that locks your energy price per kilowatt-hour for the entire contract term, so the rate on your EFL won't change month to month. Most fixed-rate plans run 12 to 36 months.

Fixed means the energy charge is steady; your total bill still rises and falls with how much you use, and pass-through TDU delivery charges can change. Leaving early usually means an ETF.

Source: Public Utility Commission of Texas

Flat Early Termination Fee

An early termination fee structure in which the cancellation penalty is a single fixed dollar amount regardless of how many months remain on the contract. Because the fee does not grow with the remaining term, it caps the household's maximum exit cost from the moment the contract is signed.

Force Majeure

A contract provision that excuses one or both parties from obligations when an extraordinary event — such as a hurricane, flood, or other disaster beyond anyone's control — makes performance impossible or impractical. In electricity contracts, force majeure language typically determines whether a retail provider is obligated to issue outage credits or is released from that responsibility during a declared natural disaster.

Holdover (Default Renewal)

The rate your provider puts you on when your fixed-term contract expires and you haven't picked a new plan. It's typically a variable, month-to-month price that can change every billing cycle.

Holdover keeps your lights on so you're never cut off at the end of a term, but the price tends to drift higher. It's the rate to shop your way off of as soon as your contract expiration notice arrives.

Source: Public Utility Commission of Texas

Material Change Notice

A written notification a retail electricity provider must send customers at least 30 days before making a significant change to their contract terms, such as a rate increase on a variable plan. Texas PUCT rules require this notice, though it is commonly delivered by email and frequently overlooked by customers.

Source: Public Utility Commission of Texas

Month-to-Month Plan

A plan with no fixed term and no early termination fee, so you can switch or cancel anytime. The trade-off is a variable rate that can change from month to month.

Month-to-month suits renters and short-timers who value flexibility, but over a full year a fixed-rate plan usually costs less because the price is locked.

Source: Public Utility Commission of Texas

No-Contract Electricity Plan

An electricity plan with no fixed end date and no early termination fee, allowing a customer to stop service or switch providers at the end of any billing cycle without penalty. The rate can change each month at the provider's discretion, typically with advance notice required by state regulators. Because the provider bears more short-term pricing risk, these plans usually carry a higher rate than comparable fixed-term contracts.

A customer renting an apartment for only four months might choose a no-contract plan to avoid a $150–$250 early termination fee that would wipe out any savings from a lower fixed rate.

Per-Remaining-Month Early Termination Fee

An early termination fee structure in which the cancellation penalty is calculated by multiplying a fixed dollar amount by the number of months left on the contract. Unlike a flat ETF, the cost shrinks as the contract progresses, but can be very large early in a long-term agreement.

For example, a $20-per-month fee on a 24-month plan with 18 months remaining would produce a $360 termination penalty.

Right of Rescission (3-Day Cancellation)

Your right under Texas rules to cancel a new electricity contract within three federal business days, with no penalty and no early termination fee. It's a built-in cooling-off period when you switch providers.

The three days start the day you receive your Terms of Service document. Cancel in that window and you owe nothing, and the provider can't charge an ETF. The rescission right does not apply to a move-in, where you're starting service at a new address.

Source: Public Utility Commission of Texas

Satisfaction Guarantee

A promise some providers add letting you leave within an early window, often the first 30 to 60 days, without paying the early termination fee if you're unhappy with the service.

This is a marketing perk, not a state requirement, so the exact window and conditions live in the Terms of Service. It's separate from the three-day right of rescission, which Texas guarantees on every switch.

Source: Public Utility Commission of Texas

Security Deposit

An upfront amount a provider may require before starting service, usually based on a credit check. It's held as protection against unpaid bills and refunded or credited later, after you've paid on time for a stretch.

Texas rules cap how large the deposit can be and let many customers skip it with satisfactory credit, a prior record of on-time payment, or qualifying status such as age 65 and over or being a victim of family violence. The provider must return the deposit with interest after 12 consecutive on-time payments, or credit it to your final bill when you close the account.

Source: Public Utility Commission of Texas, Rule 25.478

Terms of Service TOS

The contract document that lays out the full legal terms between you and your electric provider: billing, deposits, late fees, cancellation, and how either side can end the agreement. The EFL gives you the price; the Terms of Service gives you the rules.

Texas providers must hand you the TOS along with the EFL and Your Rights as a Customer before you enroll. It's where you'll find the early termination fee amount and how disconnection works. Your three-day right to cancel starts the day you receive this document.

Source: Public Utility Commission of Texas

Your Rights as a Customer YRAC

A required document from your electric provider that explains your protections under Texas rules: how billing and disconnection work, how to dispute a charge, deposit rules, and where to file a complaint with the Public Utility Commission of Texas.

Along with the EFL and Terms of Service, YRAC is one of the documents a provider must give you when you sign up. It spells out things like when you can't be disconnected during an extreme-weather emergency.

Source: Public Utility Commission of Texas

Providers & Deregulation

How Texas’s competitive electricity market works.

AEP Texas

The transmission and distribution utility (TDU) serving West and South Texas, including areas around Corpus Christi, Laredo, and Abilene. AEP Texas maintains the wires and meters in its service territory; customers in deregulated portions of that territory choose their own retail electric provider.

Source: AEP Texas

Austin Energy

The municipally owned electric utility serving Austin, Texas and some surrounding areas. Its rates are set by the Austin City Council rather than through competitive retail choice, so customers cannot select a different electricity provider.

CenterPoint Energy

The transmission and distribution utility (TDU) serving the Houston metropolitan area. Like other TDUs in deregulated Texas, CenterPoint delivers electricity over its infrastructure but does not set retail electricity rates or compete for residential customers.

Source: CenterPoint Energy

Commercial Electricity Broker

An independent agent who solicits electricity price quotes from multiple retail electricity providers on behalf of a commercial or industrial customer. Brokers are typically compensated by the provider selected, not the customer, which means their financial incentives may not always align perfectly with the buyer's lowest-cost outcome.

Texas businesses with mid-size or large accounts often use a broker because providers quote custom rates for these accounts rather than publishing standard plan prices.

Competitive Affiliate

A retail electric provider that is a corporate subsidiary or spin-off of a formerly integrated utility created at deregulation. It competes in the open retail market but is legally separated from the wires-owning TDU to prevent unfair advantages over independent retail providers.

Competitive vs. Regulated Areas

Not every Texan can shop for electricity. In competitive areas you choose your provider; in regulated areas, served by a city-owned utility or an electric cooperative, your power company is set by where you live.

Cities like Austin (Austin Energy) and San Antonio (CPS Energy) run their own municipal utilities and stayed out of competition, as did many rural co-ops. If you live in one of these areas, sites like Power to Choose won't show plans for your address, because there's nothing to switch to.

Source: Public Utility Commission of Texas

CPS Energy

The municipally owned combined gas and electric utility serving San Antonio and most of Bexar County, Texas. As the largest municipally owned combined-utility in the United States, its rates are governed by the San Antonio City Council and are not subject to retail competition.

Cramming

Cramming is when extra charges you never agreed to get added to your electric bill. Texas law bans it, and you have the right to dispute the charges and get them removed.

Watch for vague line items or add-on fees for products and services you don't recognize. Call your provider first; if it isn't resolved, file a complaint with the Public Utility Commission of Texas.

Source: Public Utility Commission of Texas

Customer of Choice

A customer of choice is anyone in a deregulated part of Texas who is free to pick their own Retail Electric Provider. If you live in a competitive area served by the ERCOT grid, that is you.

The flip side: people served by a municipal utility or an electric co-op that has not opted into competition are not customers of choice, because their power company is set by where they live.

Source: Public Utility Commission of Texas

Deceptive Enrollment

A prohibited practice in which a retail electric provider misrepresents material information — such as the actual rate, contract length, or cancellation fees — when signing up a customer for electricity service. PUCT rules require providers to disclose accurate terms at the point of sale, and deceptive enrollment is grounds for a formal complaint and potential enforcement action.

Default Service

The electricity plan a customer is automatically placed on when no explicit plan selection has been made, such as when moving into a new address in a deregulated Texas market. Default service is typically offered by the Provider of Last Resort (POLR) and often carries rates higher than competitively shopped plans. Customers are generally free to switch away from default service at any time.

Source: Public Utility Commission of Texas

Door-to-Door Electricity Sales

A sales practice in which a Retail Electric Provider's representative visits a customer's home to offer and enroll them in an electricity plan. In Texas, representatives are legally required to identify themselves, name the company they represent, and provide an EFL, Terms of Service, and Your Rights as a Customer document before or at the time of enrollment.

For example, a legitimate representative will leave printed plan documents with you and obtain documented consent before submitting any switch request to ERCOT.

El Paso Electric EPE

A regulated, vertically integrated investor-owned utility serving the El Paso metro area and parts of far West Texas. It operates outside the ERCOT grid under the Western Interconnection, and the PUCT sets its rates directly rather than allowing competitive retail providers to serve its customers.

Electric Cooperative

A nonprofit, member-owned utility that generates or distributes electricity to its members, typically in rural areas of Texas. Unlike investor-owned utilities or retail electric providers, cooperatives are governed by an elected member board and are generally outside PUCT jurisdiction for rate-setting — members vote on rates rather than a state regulator approving them.

Examples in Texas include Pedernales Electric Cooperative and Oncor's rural counterparts; customers of these cooperatives cannot switch to a competitive REP.

Electricity Deregulation in Texas

Deregulation is the change in Texas law that let you choose the company you buy electricity from, instead of being assigned one by default. The old utility still delivers the power, but you now pick the provider, the plan, and the price.

The Legislature passed Senate Bill 7 in 1999, and retail competition opened on January 1, 2002. It split the old all-in-one utilities into three parts: companies that generate power, the wires company that delivers it, and the Retail Electric Providers that sell it to you. About 85% of Texans now live in a competitive area and can shop for their plan.

Source: Public Utility Commission of Texas

Electricity Procurement

The process by which a business evaluates, selects, and contracts with an electricity supplier to secure power at competitive rates and acceptable terms. In a deregulated market like Texas, effective procurement involves analyzing usage data, soliciting competing offers, comparing total cost structures, and managing contract timing to avoid unfavorable auto-renewals or rate exposures.

Enrollment Authorization

The documented proof — such as a signed form or a verifiable verbal recording — that a customer gave informed consent to switch to a new Retail Electric Provider. Texas PUCT rules require a REP to obtain and retain this authorization before submitting an enrollment transaction to ERCOT.

If a REP cannot produce an enrollment authorization when asked, the enrollment is considered improperly executed and the customer has grounds to request rescission.

Incumbent Utility

The incumbent utility is the company that owns the poles, wires, and meter in your area and delivers electricity to your home, no matter which Retail Electric Provider you choose. In Texas these are the Transmission and Distribution Utilities, like Oncor, CenterPoint, AEP Texas, and TNMP.

You don't get to pick your delivery utility; it's set by your address. It's also who you call when the power goes out, since your retail provider only handles billing and the plan, not the lines.

Source: Public Utility Commission of Texas

Investor-Owned Utility IOU

A privately owned, for-profit electric utility that operates under a government-granted franchise and is regulated by a state commission rather than a city council or member board. In Texas's deregulated market, the four TDUs — Oncor, CenterPoint, AEP Texas, and TNMP — are investor-owned utilities, distinguishing them from municipal utilities and electric cooperatives.

Municipal Utility

An electric utility owned and operated by a city or local government, with rates set by the municipality rather than a state regulator. In Texas, municipal utilities such as CPS Energy (San Antonio) and Austin Energy (Austin) operate outside the ERCOT competitive market, so residents in those areas cannot choose a retail electric provider.

Municipally Owned Utility MOU

An electric utility that is owned and operated by a local government rather than a private company or cooperative. In Texas, examples include Austin Energy and CPS Energy (San Antonio). Municipally owned utilities are not subject to the state's retail deregulation rules, meaning their customers cannot choose a competitive retail electric provider and do not have access to programs like Smart Meter Texas.

Oncor

The transmission and distribution utility (TDU) serving the Dallas–Fort Worth area and much of North Texas. Oncor owns and maintains the power lines, poles, and meters in its territory but does not sell electricity — customers choose a separate retail electric provider for their supply.

Source: Oncor Electric Delivery

Power to Choose

Power to Choose is the free, official electricity shopping website run by the Public Utility Commission of Texas. It lists plans from certified providers in your area so you can compare them side by side.

The site shows the price per kilowatt-hour at three usage levels and links to each plan's Electricity Facts Label. It is not a provider itself; it is a state-run listing, and you cannot sign up there. Once you pick a plan, it sends you to that company to enroll.

Source: Power to Choose (PUCT)

Price to Beat

A transitional default electricity rate established after Texas deregulation in 2002, offered by the competitive affiliates of former integrated utilities. It was designed to give new retail competitors a benchmark to undercut and protect consumers during the transition period; these rates have largely been phased out.

A customer who never switched providers after deregulation may have started on a Price to Beat rate and later rolled onto a successor default plan without realizing competitive alternatives existed.

Source: Public Utility Commission of Texas

Provider of Last Resort Rate POLR Rate

The electricity rate charged by a state-designated fallback provider to customers who have no active REP contract — for example, because they never chose a provider or their REP lost its license. In Texas, the PUCT sets rules for POLR service, and the rate is typically higher than competitive market offers.

Source: Public Utility Commission of Texas

Retail Competition

Retail competition means dozens of Retail Electric Providers fight for your business in the same area, so you can compare prices and switch whenever you want. Because no single company is handed your account, providers have to compete on rate and service to win it.

In a typical Texas city you might see 40 or more providers and well over 100 plans for one address. That choice is the whole point of competition, though it also means you have to read the fine print to avoid a bad deal.

Source: Public Utility Commission of Texas

Retail Electric Provider REP

A Retail Electric Provider is the company you buy your electricity from and that sends you a bill. In Texas, REPs compete for your business by setting their own prices and plans, while a separate utility delivers the power over the wires.

Companies like TXU Energy, Reliant, Gexa, and Frontier Utilities are REPs. They must be certified by the Public Utility Commission of Texas (PUCT), and any REP can serve any address inside a competitive area, no matter who owns the poles.

Source: Public Utility Commission of Texas

Senate Bill 7 SB 7

The 1999 Texas legislation that restructured the state's electricity market and created the legal framework for retail competition. SB 7 required vertically integrated utilities to separate their power generation from their regulated wire and billing businesses, and granted most Texas residential customers the right to choose their Retail Electric Provider beginning January 1, 2002.

Service Territory

The geographic area within which a utility holds an exclusive franchise to own and operate electric distribution infrastructure, as authorized by the PUCT. Every address in deregulated Texas falls within exactly one TDU's service territory, a boundary determined by geography that cannot be changed by switching retail electric providers.

Slamming

Slamming is when a provider switches your electric service to their company without your clear permission. It is illegal in Texas, and you can report it to the Public Utility Commission of Texas.

It often starts with a misleading sales call or a signature collected under false pretenses. If you get a confirmation letter for a switch you never agreed to, contact your current provider and file a complaint with the PUCT. The unauthorized provider has to return you to your old plan and refund what you paid, and you should not be charged extra to switch back.

Source: Public Utility Commission of Texas

Small Commercial Account

A business electricity account whose monthly peak demand falls below a utility- or REP-defined threshold — commonly 25 kW or 50 kW in Texas — placing it in a distinct rate class from medium and large commercial accounts. Accounts at or below this threshold can typically access posted retail rates and standard contracts rather than individually negotiated agreements.

Soft Credit Pull

A type of credit inquiry that does not affect the consumer's credit score and is not visible to other lenders. Electric providers commonly use soft pulls when screening applicants for deposit requirements, as opposed to a hard inquiry, which is recorded on the credit file and can lower a score temporarily.

Switch Request

The electronic transaction a new retail electric provider submits to the TDU to record a pending provider change for a specific ESI ID. No meter visit or physical work is required; the transaction flows through standardized data systems connecting all REPs and TDUs operating in the Texas deregulated market.

Switching Providers

Switching providers means moving your account from one Retail Electric Provider to another to get a better rate or plan. In Texas you do it online or by phone in minutes, your power never goes off, and no one comes to your house.

The new provider handles the swap and your meter, poles, and wires stay exactly the same. The change usually takes effect on your next meter read, often within a few days. Check your current contract first, since switching before it ends can trigger an early termination fee.

Source: Public Utility Commission of Texas

Transfer of Service

Transfer or establishment of service is what you do when you move into a new Texas home: you sign up with a Retail Electric Provider and pick a date to turn the power on. It is different from switching, which keeps you at the same address.

You'll usually need your new address, a move-in date, and sometimes the meter's ESIID. If the home's power is already off, allow extra time for the utility to reconnect it; same-day or next-day starts are common but not guaranteed.

Source: Public Utility Commission of Texas

Transmission and Distribution Service Provider TDSP

A regulated utility company that owns and maintains the power lines, transformers, and meters that deliver electricity to homes and businesses. In Texas's deregulated market, the TDSP is distinct from the retail electricity provider that sells you power — you choose your retailer, but your TDSP is determined by your physical location.

Oncor, CenterPoint Energy, AEP Texas, and Texas-New Mexico Power (TNMP) are the four major TDSPs serving deregulated areas of Texas.

Source: Public Utility Commission of Texas

Utility Credit Report

A credit report generated specifically for utility service applications, drawing on a customer's history with electric, gas, water, and telecom accounts rather than general lending. Specialty consumer reporting agencies such as Equifax's National Consumer Telecom and Utilities Exchange (NCTUE) compile these reports. Providers use them to assess default risk when deciding whether to require a deposit.

A customer with no traditional credit card or loan history may still have a thin or negative utility credit file if they have prior unpaid utility accounts in collections.

Source: Equifax / NCTUE

Vertically Integrated Utility

A single utility company that owned all three segments of the electricity supply chain — power generation, high-voltage transmission, and local distribution — and served customers in a defined territory with no competition. Before Senate Bill 7 (1999), companies such as TXU and Reliant Energy were vertically integrated utilities across most of Texas. Deregulation required them to legally separate their generation assets from the regulated wire businesses, producing the current three-entity structure of generators, TDUs, and REPs.

ERCOT & the Grid

How the Texas power grid works and who keeps it running.

4CP Alert Service

A monitoring service, offered by some retail electric providers and third-party energy management firms, that tracks real-time ERCOT grid load and notifies commercial customers when conditions suggest a coincident peak hour is likely forming. Alerts typically arrive 30 to 60 minutes before the suspected peak, giving businesses time to reduce demand. The service is most valuable to customers on pass-through transmission plans.

Ancillary Services

Ancillary services are the backup and balancing tools ERCOT buys to keep the grid stable from moment to moment, beyond the raw electricity itself. They include reserves that can jump in within seconds if a power plant trips offline and services that fine-tune the grid's frequency.

Examples include Responsive Reserve, Regulation Up and Down, and the ERCOT Contingency Reserve Service (ECRS). The cost of these services is built into wholesale prices and can spike during tight grid conditions, which is one reason summer wholesale costs climb.

Source: ERCOT

Conservation Appeal

A conservation appeal is a public request from ERCOT asking Texans to voluntarily cut back electricity use during tight grid conditions, usually a brutally hot afternoon or a cold snap. It's a request, not a requirement, and it's meant to ease demand before ERCOT has to take more drastic steps.

Typical asks: set the thermostat to 78 or higher, hold off on the dishwasher, dryer, and oven until evening, and turn off lights you're not using, especially during the 3 to 8 p.m. window when demand peaks. Honoring these appeals can help head off an Energy Emergency Alert.

Source: ERCOT

Controlled Outage

A deliberate, temporary interruption of electricity service to a portion of the grid, ordered by a grid operator and carried out by a TDU, to prevent total grid collapse when supply cannot meet demand. Outages are typically rotated across service areas to distribute the burden.

During Winter Storm Uri in February 2021, ERCOT directed TDUs to implement controlled outages after grid frequency dropped dangerously close to a level that could have caused uncontrolled, long-term failure.

Source: ERCOT Grid Emergency Information

Demand Curtailment

A deliberate, temporary reduction in a customer's electricity consumption, typically by shutting off non-essential equipment or adjusting thermostat setpoints during a targeted window. In the 4CP context, curtailment during the right one-hour window can lower a business's coincident peak demand figure and reduce its transmission cost allocation for the following year. Curtailment differs from permanent efficiency improvements in that it is situational and time-limited.

Common curtailment actions for commercial customers include deferring equipment cycles, raising cooling setpoints by a few degrees, and delaying EV or battery charging until after the peak window passes.

Demand Response

A program that compensates electricity customers—residential or commercial—for voluntarily reducing their usage during periods of high grid stress. In Texas, retail providers offer demand response programs, often paired with smart thermostats, that issue bill credits when enrolled customers curtail load during designated peak summer hours.

ERCOT estimates a 1 percent reduction in peak demand during a stressed grid event can lower wholesale prices by 3 to 5 percent for all market participants.

Energy Emergency Alert EEA

An Energy Emergency Alert is ERCOT's official warning system for when electricity supply gets dangerously close to demand. It has three levels that climb in severity, and at the top level ERCOT can order temporary rotating outages to keep the whole grid from crashing.

ERCOT issues an EEA Level 1 when operating reserves fall to about 2,500 MW and aren't expected to recover within 30 minutes. Level 2 (around 2,000 MW) brings public conservation appeals and can call on large customers to cut usage. Level 3 (below about 1,500 MW) authorizes controlled rotating outages, brief planned blackouts spread across neighborhoods to protect the grid. ERCOT raised these thresholds in November 2023.

Source: ERCOT

ERCOT ERCOT

ERCOT, the Electric Reliability Council of Texas, runs the power grid for about 90% of the state. It balances electricity supply and demand second by second, manages the wholesale market where power gets bought and sold, and keeps the lights on. It is not your provider and does not send you a bill.

Think of ERCOT as air traffic control for electrons. When you hear about grid emergencies or calls to conserve power on a hot August afternoon, that is ERCOT. It is a nonprofit overseen by the Public Utility Commission of Texas (PUCT) and the Texas Legislature.

Source: ERCOT

Four Coincident Peak 4CP

A cost-allocation mechanism used by ERCOT in which each customer's electricity demand during the four highest-demand hours of the summer (one per month, June through September) determines that customer's share of statewide transmission costs for the following year. The four hours are identified after the summer ends, not announced in advance. A business's average demand across those four hours is multiplied by the TDU's transmission rate to produce an annual charge spread across monthly bills.

A commercial customer that reduces its demand by even 20 kW during each of the four coincident peak hours can meaningfully lower its transmission cost allocation for the entire following year.

Source: ERCOT Nodal Protocols

Grid Operator

A grid operator is the organization that keeps electricity supply and demand in balance across a region and decides which power plants run at any given moment. In most of Texas, that job belongs to ERCOT.

The grid operator doesn't own the wires or the power plants and doesn't sell you electricity. It coordinates everyone else, the generators, the wires companies (TDUs), and the retail providers (REPs), so the system stays stable.

Source: ERCOT

Last-Mile Distribution

The final segment of the electric grid that carries electricity from a local substation through low-voltage distribution lines to individual homes and businesses. This infrastructure is owned and maintained by the TDU, not by generators or retail providers, and it is the portion of the grid most directly involved when a customer experiences a power outage.

Load Profile

A pattern showing how a customer's electricity consumption varies across hours of the day, days of the week, and seasons of the year. Suppliers use a business's load profile to price risk when quoting rates, because a flat, predictable profile is cheaper to hedge on the wholesale market than one with large, irregular spikes.

Load Zone

A load zone is one of the geographic areas ERCOT uses to price and settle wholesale electricity. Texas is split into zones like North, Houston, South, and West, and the wholesale price can differ from zone to zone depending on local supply, demand, and how much power the transmission lines can carry.

Most customers never see load zones directly, but they shape the wholesale prices that providers pay, which eventually flow into the plans you're offered. A heat wave or a transmission bottleneck can push one zone's price far above another's on the same day.

Source: ERCOT

Locational Marginal Price LMP

The wholesale cost of electricity at a specific node or load zone on the grid during a given settlement interval, calculated by ERCOT every 15 minutes. LMPs can vary significantly by location when transmission lines become congested and reflect the true supply-and-demand balance at that point.

During the August 2023 heat event, the real-time LMP for the Houston load zone exceeded $1,000 per MWh while prices at less-constrained zones were considerably lower.

Source: ERCOT Market Prices

Market Clearing Price

The single wholesale price paid to every generator dispatched in a given ERCOT settlement interval, set by the bid of the most expensive unit needed to satisfy demand at that moment. Because all sellers receive this same uniform price, even lower-cost wind and gas plants earn the elevated rate when a costly peaker plant sets the margin.

Natural Gas Futures

Standardized financial contracts that lock in a price for natural gas to be delivered at a future date. Because natural gas is the dominant fuel for Texas power generation, movements in natural gas futures prices are a leading indicator of where retail electricity rates may be headed.

Source: U.S. Energy Information Administration

Peaker Plant

A power plant—typically a fast-starting natural gas turbine—that runs only during periods of high electricity demand. Peaker plants carry higher per-unit fuel and operating costs than always-on baseload generators, and because they are the last units dispatched when demand spikes, they often set the market clearing price during summer afternoons.

Real-Time vs. Day-Ahead Market

These are the two wholesale markets where electricity gets bought and sold in Texas before it reaches you. The day-ahead market lets providers and generators lock in prices for each hour of the next day, while the real-time market settles the actual supply and demand right now, with prices recalculated every five minutes.

ERCOT's real-time prices can swing wildly, from a few cents to the $2,000-per-MWh real-time cap during a crunch (the day-ahead cap is $5,000 per MWh; both took effect with ERCOT's market redesign in December 2025). The day-ahead market lets buyers hedge against those swings. On a fixed-rate plan, your provider absorbs this volatility; on a variable or wholesale-indexed plan, you can feel it directly.

Source: ERCOT

Reserve Margin

The reserve margin is the cushion of extra power capacity Texas keeps beyond its expected peak demand, in case a plant breaks down or it gets hotter than forecast. A thin reserve margin means the grid has little room to spare and is more likely to hit an emergency.

Picture it as the buffer in your bank account above your bills. ERCOT tracks both a long-term planning reserve margin (capacity available for the year) and minute-to-minute operating reserves; when operating reserves run low, that's what triggers an Energy Emergency Alert.

Source: ERCOT

Schedulable Load

Electricity consumption from devices whose operating time can be deliberately moved to a different part of the day without affecting the household's core needs. EV charging, dishwashers, and clothes dryers are common examples because they can run overnight rather than during peak-price hours.

Settlement Interval

The fixed time window—typically five minutes in ERCOT—during which the grid operator measures electricity supply and demand, clears a market price, and records how much each consumer used. Your actual electricity cost under a real-time or indexed plan is calculated by multiplying your consumption in each interval by the price cleared for that interval.

Source: ERCOT Settlement Guides

Settlement Point Price SPP

The real-time wholesale price at which electricity is bought and sold at a specific location on the ERCOT grid, calculated at 15-minute intervals. Some solar buyback plans index export credits directly to this price, meaning credits are higher during peak demand periods and lower during off-peak hours. It is closely related to, but distinct from, the Locational Marginal Price used in other U.S. markets.

Source: ERCOT Market Information

Southwest Power Pool SPP

A regional transmission organization (RTO) that operates the wholesale electricity market and manages grid reliability for a multi-state region in the central United States. Xcel Energy's Lubbock, Texas service territory sits within the SPP interconnection rather than ERCOT, so Lubbock-area customers are in a regulated market and cannot choose a Retail Electric Provider.

Substation

A TDU-owned facility that uses transformers to step electricity voltage up or down between the high-voltage transmission grid and the lower-voltage local distribution lines that run through neighborhoods. Electricity generated at a power plant travels over long-distance transmission lines to a substation, where voltage is reduced before delivery to homes and businesses.

When a storm causes an outage, repair crews from the TDU work at or beyond the substation level — the REP has no role in that process.

Summer Peak Demand

Summer peak demand is the highest amount of electricity Texas uses at once, almost always on a scorching late afternoon in July or August when millions of air conditioners run flat out. ERCOT plans around this moment because it's when the grid is stretched tightest and prices run highest.

Peak hours typically fall between 3 and 8 p.m. on hot days. ERCOT set its all-time demand record of 85,508 MW on August 10, 2023. This is why some plans charge more, or why conservation appeals show up, during those late-afternoon hours.

Source: ERCOT

Systemwide Offer Cap SWCAP

The maximum price per megawatt-hour that any generator may offer electricity into the ERCOT wholesale market during a given operating period. PUCT sets this ceiling to limit extreme price spikes during supply emergencies, though it does not directly cap what retail customers on variable or indexed plans are charged.

The SWCAP was reduced from $9,000 to $5,000 per megawatt-hour following the February 2021 winter storm and subsequent legislative reforms.

Source: PUCT Substantive Rule 25.505

Texas Interconnection

The Texas Interconnection is the power grid that covers most of Texas and stands almost entirely on its own, separate from the two big grids that serve the rest of the country. Because it stays inside state lines, federal regulators have little say over it, which is why Texas runs its own market through ERCOT.

The U.S. has three main grids: the Eastern Interconnection, the Western Interconnection, and Texas. Texas has only a handful of small links to its neighbors, so it can't easily import large amounts of power when supply runs short, the way other states can during an emergency.

Related: ERCOT , Grid Operator , Reserve Margin

Source: ERCOT

Texas-New Mexico Power (TNMP) TNMP

A regulated Transmission and Distribution Utility (TDU) that owns and operates electric distribution infrastructure in portions of Texas, including parts of the Texas Panhandle, South Texas, and areas near the Gulf Coast. Like other TDUs in the ERCOT footprint, TNMP delivery charges are set by PUCT-approved tariffs and are the same regardless of which retail electric provider a customer chooses.

Source: Texas-New Mexico Power

Transmission Congestion

Transmission congestion happens when the high-voltage power lines can't carry all the electricity that needs to move from where it's generated to where it's used. Like a traffic jam on the highway, it forces ERCOT to run more expensive power plants closer to demand, which pushes up the wholesale price in that area.

A common example: West Texas wind farms generate cheap power, but the lines carrying it east to the cities fill up. The wind power gets stuck, and Houston or Dallas pays more because nearer, pricier plants have to fill the gap.

Source: ERCOT

Weatherization Standards

Rules requiring power generators, natural gas suppliers, and grid infrastructure owners to harden their equipment against extreme cold and heat to prevent weather-driven outages. In Texas, the PUCT and ERCOT developed mandatory weatherization requirements following the catastrophic failures during the February 2021 Winter Storm Uri.

Source: PUCT Electric Rules

Western Interconnection

One of the two major alternating-current (AC) power grids in the continental United States, covering the western states, British Columbia, and the El Paso, Texas area served by El Paso Electric. Unlike ERCOT (the Texas Interconnection), the Western Interconnection crosses state and national borders and falls under Federal Energy Regulatory Commission (FERC) jurisdiction.

Wholesale Electricity Market

The upstream market where power generators sell electricity to retail electric providers, utilities, and other large buyers — as distinct from the retail market where providers sell to end customers. In Texas, ERCOT administers this market through real-time and day-ahead auctions that set the price suppliers receive for their output.

Wholesale Forward Price

The price agreed upon today for electricity to be delivered at a future date, determined by trading in forward or futures markets. Retail providers use wholesale forward prices to estimate their supply costs when setting fixed-rate offers for customers.

Source: U.S. Energy Information Administration

Wholesale Price Cap

The maximum price per megawatt-hour that generators may bid into the ERCOT wholesale electricity market during any single settlement interval. PUCT sets this ceiling to limit extreme price spikes, though prices can still reach the cap during severe supply shortfalls, as occurred during Winter Storm Uri in 2021.

During Winter Storm Uri, the cap was set at $9,000 per MWh (equivalent to 90 cents per kWh), and it remained there for several consecutive days — producing catastrophic bills for customers on plans that passed wholesale costs directly to consumers.

Source: Public Utility Commission of Texas

Meters & Service

Smart meters, your service ID, and how usage is measured.

Advanced Metering Infrastructure AMI

The industry term for the whole setup that makes smart meters work: the meters themselves, the communication network that carries readings, and the software that stores and processes them. In Texas you'll more often see it called AMS, but AMI means the same thing.

Source: Public Utility Commission of Texas

Advanced Metering System AMS

The official Texas name for the smart meter program. AMS is the network of digital meters and the systems behind them that the wires companies (TDUs) installed across the state under PUCT rules, replacing manual meter reads with automatic two-way communication.

The PUCT approved AMS deployment under Substantive Rule 25.130 so utilities like Oncor, CenterPoint, AEP Texas, and TNMP could read meters remotely, connect or disconnect service faster, and give customers detailed usage data through Smart Meter Texas.

Source: Public Utility Commission of Texas

ANSI Meter Accuracy Standard ANSI

A set of technical specifications published by the American National Standards Institute that define the allowable margin of error for electricity meters. Utilities are required to test their meters against these standards, and a meter that reads within the permitted tolerance is considered accurate even if a customer's bill seems unexpectedly high or low.

Source: American National Standards Institute

De-energized Meter

A meter at which the TDU has physically severed the electrical connection, so no power flows regardless of any billing arrangement with a REP. Restoring service requires a TDU technician visit, unlike an active-meter switch that completes electronically.

ESI ID ESIID

The Electric Service Identifier, a unique number that pins down the exact electric meter at your address. It's like a Social Security number for your service location, and it follows the address, not you.

Your ESI ID is 17 digits in most of Texas (Oncor, AEP Texas, TNMP) and 22 digits in CenterPoint territory, and it shows up on your bill and on Smart Meter Texas. When you sign up or switch providers, the new provider uses your ESI ID to connect the right meter, which matters in apartments and duplexes where two units share one street address.

Source: Smart Meter Texas

Expedited Connect

A fee-based TDU option that schedules a same-day technician visit to restore power at a de-energized meter, typically available for an additional charge of $15 to $30. Orders must be placed before the TDU's daily processing cutoff, and not every TDU offers this tier of service.

Green Button

A standardized data-sharing initiative that lets electricity customers download their interval usage data or authorize third-party access to it in a common machine-readable format. Texas TDUs provide Green Button-compatible portals so customers can retrieve their 12-month consumption history for plan comparison, energy audits, or solar sizing.

Source: Green Button Alliance

Individually Metered

A rental unit that has its own dedicated utility meter registered directly with the local transmission and distribution utility. The tenant holds the retail electricity account in their own name and has the full legal right to choose any Retail Electric Provider serving their area.

Interval Usage Data

The detailed record of your electricity use broken into 15-minute chunks, captured by your smart meter. Instead of one number for the whole month, you can see exactly which hours and days you used the most power.

This data is what makes time-of-use and free-nights plans possible, because the meter knows whether you ran the AC at 3 p.m. or 3 a.m. View your own intervals on Smart Meter Texas to figure out whether a plan's pricing windows actually match your habits.

Source: Smart Meter Texas

Meter Multiplier

A number the utility multiplies your raw meter reading by to get your actual electricity use. Most homes have a multiplier of 1, so the meter shows true usage, but some larger or commercial services use a multiplier to scale the reading up.

When a multiplier above 1 applies, the meter records a fraction of the real usage and the utility multiplies it back out on your bill. If your kilowatt-hours look strangely low for the size of your operation, a multiplier is usually the reason.

Related: Meter Read , Smart Meter

Source: Public Utility Commission of Texas

Meter Number

A unique identifier printed on a customer's physical electric meter that distinguishes it from all other meters on the utility's network. Utilities and REPs use it alongside the ESI ID to locate and verify a specific service point when responding to account inquiries or service requests.

Meter Read

The recorded measurement of how much electricity your meter has counted at a point in time. Your bill is built from two reads: the start of the billing cycle and the end. The difference is the kilowatt-hours you pay for.

With smart meters, reads happen automatically every day, so you rarely deal with estimated bills. When you switch providers or move, the TDU takes a 'switch read' or 'move-in read' to draw a clean line between the old account and the new one.

Source: Public Utility Commission of Texas

Net Consumption

The amount of electricity a home draws from the grid after subtracting any electricity generated on-site, such as from rooftop solar panels. Net consumption is the figure used to calculate a household's actual bill under most standard retail plans.

A home that generates 400 kWh from solar and draws 900 kWh from the grid has a net consumption of 500 kWh for that billing period.

Net Metering

A billing setup where the electricity your home sends back to the grid (usually from rooftop solar) is subtracted from the electricity you pull in, so you pay for the net amount. Texas has no statewide net metering mandate, so what you get depends entirely on your provider's plan.

Because no state rule forces it, Texas solar customers shop for 'solar buyback' plans, where individual retail providers set their own credit for the surplus you export. Some pay full retail rate, some pay less, and the terms vary plan to plan, so read the EFL before you sign.

Source: Public Utility Commission of Texas

New-Connect Order

A service request submitted to a TDU to restore power at a meter that has been physically de-energized, requiring a technician visit to the address. Distinct from a standard provider switch, which transfers billing on an already-active meter without any on-site work.

A new-connect order typically completes within one to two business days, compared to same-day or next-business-day timelines for switches at already-active meters.

Occupancy Sensing

The ability of a thermostat or building-control device to detect whether people are present in a space and automatically adjust temperature setpoints based on that information. Smart thermostats use built-in motion sensors, remote room sensors, or phone location data to switch between occupied and away modes.

Plug-In Energy Monitor

A small device that sits between an appliance's plug and a wall outlet, measuring how much electricity that appliance draws in real time and over time. It displays wattage, cumulative kWh, and sometimes estimated cost, helping users identify high-consumption devices.

Whole-home energy monitors install at the breaker panel and track usage by circuit, offering broader visibility than a single plug-in unit.

Smart Meter

A digital electric meter that records how much electricity you use and sends those readings to your local wires company automatically over a wireless network. It replaced the old spinning-dial meters, so nobody has to walk up to your house to read it anymore.

In Texas, your local wires company (the TDU, like Oncor or CenterPoint) owns and maintains your smart meter, not your retail provider. Because readings come in automatically, you can switch plans without waiting for a meter reader, and you can see your daily usage online.

Source: Public Utility Commission of Texas

Smart Meter Opt-Out

The choice some Texans can make to keep or request a non-digital meter instead of a smart meter. The PUCT calls this 'non-standard metering service,' and it comes with extra fees because the utility has to send someone to read your meter by hand.

Opting out is uncommon and usually driven by privacy or radio-frequency concerns. Expect a one-time setup charge plus a recurring monthly fee for the manual reads, and you still pay the AMS surcharge because state law (PURA 39.109) makes it nonbypassable. Availability and pricing differ by TDU, so check with yours.

Source: Public Utility Commission of Texas

Smart Meter Texas SMT

The free website where Texans can see their own smart meter data. Log in to view your electricity use down to 15-minute intervals, going back months, no matter which retail provider you buy from.

Run jointly by the Texas TDUs, SmartMeterTexas.com lets you check exactly when you use the most power and authorize providers to pull your usage history when they quote you a plan. It's the single source of meter data shared across the deregulated market.

Source: Smart Meter Texas

Usage Data Export (CSV)

A feature offered by metering portals such as Smart Meter Texas that allows customers to download their interval or daily electricity consumption as a comma-separated values (CSV) file. The exported file can be opened in a spreadsheet to calculate totals, identify patterns, or evaluate how a customer's usage would be priced under different rate plan structures.

Downloading a CSV and tallying consumption during a plan's defined peak hours is one of the most reliable ways to assess whether a time-of-use plan will save or cost money compared to a flat-rate alternative.

Usage History

A record of the electricity a customer or a specific address has consumed over prior billing periods, expressed in kilowatt-hours. Utilities and retail electric providers use usage history to estimate future consumption when setting average billing installments, sizing plans, or projecting annual costs.

A home with two years of interval usage data on file gives a provider a reliable baseline for projecting seasonal peaks and annual totals.

Renewable & Solar

Green-energy plans, solar buyback, and renewable credits.

100% Renewable Plan

An electricity plan where the provider buys enough Renewable Energy Certificates to match 100% of what you use, usually from Texas wind and solar. Your home still draws the same mixed power from the grid — the green claim happens on paper through RECs.

A 100% renewable plan is not always pricier than a regular plan. Texas produces so much wind power that some all-renewable plans land at or below the market average. Check the price per kWh on the Electricity Facts Label, not just the green label.

Source: Power to Choose (PUCT)

Bundled RECs

Renewable Energy Credits that are purchased together with the actual electricity from the same generating facility. Your retail provider contracts directly with a specific wind farm or solar project for both the power and its environmental attributes, creating a traceable link between your plan and a named clean-energy source.

For example, a provider might contract with a specific West Texas wind farm, buying both the electricity output and the RECs it generates, then market that arrangement as a wind-powered plan.

Carbon Offset

A credit that funds a project — like planting trees or capturing methane — to cancel out the carbon pollution from generating your electricity. Some Texas plans add offsets to call themselves carbon neutral.

A carbon offset is not the same as renewable power. Renewable Energy Certificates say your usage was matched with clean generation; an offset says the emissions were paid down somewhere else. A plan can use either, or both.

Source: U.S. EPA Green Power Markets

Community Solar

A shared solar project where you subscribe to part of a local solar farm and get bill credits for your share of the power it makes — no panels on your own roof. It's a way to go solar if you rent or have a shady or unsuitable roof.

Community solar is not as widespread in Texas as rooftop solar, and what's available depends on your TDU area and which providers run programs there. You stay on the grid and keep your normal retail provider; the subscription just adds solar credits.

Source: U.S. Department of Energy

Credit Rollover

A plan feature that carries any unused solar export credits forward into the next billing period rather than expiring them at month's end. Rollover provisions are especially valuable for solar households in winter, when production falls short of summer highs and accumulated credits help offset higher consumption bills.

Distributed Generation DG

Small-scale power made right where it's used — like rooftop solar panels or a home battery — instead of at a big central plant. In Texas, your home solar setup is distributed generation, and special rules apply when it sends power back to the grid.

A distributed generation system of 50 kW or less rarely causes grid problems, but it still needs your TDU's approval to interconnect and a special meter that reads power flowing both directions. Your TDU — Oncor, CenterPoint, AEP, or TNMP — handles that interconnection, not your retail provider.

Source: Public Utility Commission of Texas

Green Energy

A catch-all term for electricity tied to renewable sources — mostly Texas wind, plus a growing amount of solar. On a plan, green usually means the provider matches part or all of your usage with Renewable Energy Certificates.

Watch the percentage. A plan can say green and still cover only 6% of your usage with renewables. The Electricity Facts Label spells out the exact renewable content, so read that number before you sign.

Source: Power to Choose (PUCT)

Interconnection Agreement

The approval and paperwork that lets your home solar system safely connect to the grid and send power back. In Texas your TDU — the wires company like Oncor or CenterPoint — runs this process and installs the two-way meter that measures your surplus.

You generally need an approved interconnection agreement before any solar buyback plan will credit you for surplus power. The TDU reviews your system for safety, then swaps in a meter that reads energy flowing both into and out of your home.

Source: Public Utility Commission of Texas

Power Purchase Agreement PPA

A long-term contract between an electricity generator and a buyer — often a retail provider or large commercial customer — that locks in the price and delivery terms for electricity from a specific facility. In the renewable context, a PPA typically covers both the electricity supply and the associated Renewable Energy Credits from that facility.

Source: U.S. EPA Green Power Markets

REC Registry

A database system that issues, tracks, and retires Renewable Energy Credits to prevent them from being counted or sold more than once. When a REC is 'retired' in a registry, it is permanently removed from circulation and assigned to a specific buyer's claim. In Texas, registries include the ERCOT system and national platforms such as PJM-GATS.

Renewable Energy Certificate REC

A REC is proof that one megawatt-hour of electricity was generated from a renewable source like Texas wind or solar. When a plan calls itself green, the provider is buying RECs to match your usage — not literally piping clean power to your house.

Every electron on the grid mixes together, so no one can send you only wind power. RECs are the accounting system that lets a retailer claim renewable content. In Texas, ERCOT administers the REC trading program, and every retail provider must retire RECs each year to back its renewable claims.

Source: ERCOT Renewable Energy Credit Trading Program

Renewable Energy Percentage

The share of a retail electricity plan's supply that is backed by renewable energy certificates or sourced from renewable generation, expressed as a percent of total energy delivered. Texas regulations require this figure to be disclosed on every Electricity Facts Label.

A plan labeled '100% renewable' carries certificates covering every kWh sold, while a plan at 15% renewable covers only that fraction.

Source: Public Utility Commission of Texas

Rooftop Solar

Solar panels mounted on your house that turn sunlight into electricity for your own use. In Texas, rooftop solar can shrink your bill, but the panels are yours to buy or finance — your electricity provider doesn't install them.

When your panels make more than you use, the extra flows back to the grid. What you get for that surplus depends on your retail provider's solar buyback plan, not a statewide rule — Texas has no mandated net metering.

Source: Public Utility Commission of Texas

Scope 2 Emissions

A category in greenhouse gas accounting that covers indirect emissions from purchased electricity, heat, or steam. Under frameworks such as the GHG Protocol, a company or household reduces its reported Scope 2 emissions by purchasing Renewable Energy Credits to match its electricity consumption, even though the physical electrons on the grid remain the same.

Corporations required to disclose emissions under CDP reporting standards commonly use REC purchases as their primary method for addressing Scope 2 electricity emissions.

Source: GHG Protocol

Solar Buyback

A plan that pays you — usually as a bill credit — for the extra solar power your panels send back to the grid. Texas has no statewide net metering law, so what you earn is set by each retail provider, and the rates vary a lot.

Read the fine print. Some plans credit you the full retail rate for surplus power; others pay a lower wholesale rate or cap how much they'll buy back. The credit terms live in the plan's Electricity Facts Label and terms of service.

Source: Public Utility Commission of Texas

Solar Buyback Plan

A retail electricity plan designed for customers with rooftop solar that pays a credit for each kilowatt-hour the customer exports to the grid. In Texas, these plans are offered voluntarily by competitive REPs and vary widely in their credit rates and structures. They are the practical substitute for traditional net metering in the deregulated Texas market.

A household exporting 400 kWh per month might receive a credit of $48 under a near-retail buyback plan versus $16 under a flat below-retail plan — a meaningful difference over a full year.

Surplus Generation Credit

The bill credit you earn for solar power your home produces but doesn't use, which flows back onto the grid. On a Texas solar buyback plan, this credit shows up on your monthly bill and offsets what you owe.

Your retail provider sets the credit rate per kWh, since Texas doesn't require providers to pay retail price for surplus. Compare the buyback rate against the plan's energy rate — a plan with a high energy charge can wipe out a generous-looking credit.

Source: Public Utility Commission of Texas

Unbundled RECs

Renewable Energy Credits purchased on the open market separately from the electricity itself. A retail provider buys these certificates from a registry to offset customer consumption without any direct contract with a specific renewable generator. Unbundled RECs can be very inexpensive and may originate from long-established projects that would operate regardless of the purchase.

Bill Assistance

Programs and protections if you’re struggling to pay.

Bill Payment Assistance

Money or credit that helps you cover an electric bill you can't pay in full. In Texas it comes from a few places: the state's CEAP program, local nonprofits and churches, and sometimes a provider's own hardship fund. It's usually one-time help for a crisis, not an ongoing discount.

To find help near you, dial 2-1-1 or visit 211texas.org — the free referral line run by the Texas Health and Human Services Commission. It doesn't hand out money itself; it connects you to the agencies that do. Apply early, because funds run out fast in summer and winter when demand spikes.

Source: 2-1-1 Texas

Block Grant

A fixed sum of federal money given to a state or local government to spend within a broad policy area, with considerable flexibility in how it is distributed. Unlike categorical grants, block grants give states discretion over program design, eligibility details, and delivery methods.

LIHEAP is structured as a block grant, which is why the application process and benefit amounts for home energy assistance differ from state to state.

Chronic Condition Residential Customer

A PUCT designation for a home where someone relies on an electric-powered medical device to keep a serious medical condition from getting dangerously worse if the power goes out. A physician has to certify it. It gives you extra protection against disconnection and advance warning of planned outages, even when the situation isn't immediately life-threatening.

This sits one step below the Critical Care designation, which covers life-sustaining equipment. Like Critical Care, you apply through your wires company (the TDU) with a physician's sign-off on the same PUCT form, and it has to be renewed. It buys you time and notice — it doesn't wipe out what you owe.

Source: Public Utility Commission of Texas

Community Action Agency CAA

A nonprofit or government organization designated to deliver federally and state-funded assistance programs — such as CEAP — at the local level. In Texas, roughly 65 CAAs serve specific counties or regions and are the actual points of contact where residents apply for energy bill assistance.

Source: Texas Department of Housing and Community Affairs

Comprehensive Energy Assistance Program CEAP

Texas's main bill-help program for low-income households. It can pay part of your electric bill, step in during a crisis when you're facing disconnection, and in some cases repair or replace your heating or cooling system. You apply through your local community action agency, not your electricity provider.

CEAP is funded by the federal LIHEAP program and run by the Texas Department of Housing and Community Affairs (TDHCA). To qualify, your household income generally has to be at or below 150% of the federal poverty guidelines. Local agencies take applications in every one of Texas's 254 counties.

Source: Texas Department of Housing and Community Affairs

Critical Care Residential Customer

A PUCT designation for a home where someone depends on an electric-powered medical device to stay alive — like a ventilator or oxygen concentrator. A physician has to certify it. It gives you the strongest protection against having your power shut off, plus advance notice before a planned outage.

You apply through your transmission and distribution utility — your wires company — using the PUCT's Chronic Condition / Critical Care form, signed by a physician. The designation has to be renewed periodically. It doesn't erase your bill — you still owe for what you use — but it changes the rules on disconnection and outage notice.

Source: Public Utility Commission of Texas

Deposit Waiver

A way to skip the upfront security deposit an electricity provider would normally charge to start service. Under PUCT rules, a provider can't require a deposit if you can show certain things — such as a solid recent payment history, proof you're 65 or older with no past-due electric balance, or certification that you're a victim of family violence.

You can also get a deposit waived with a letter of credit from a prior electric utility showing 12 months of on-time payments, or by lining up a guarantor. When a deposit is required, the provider has to let you pay it in installments instead of all at once.

Source: Public Utility Commission of Texas

Disconnection Moratorium (Extreme Weather)

A PUCT rule that bars electricity providers from cutting off your power for non-payment during dangerous weather. It's tied to the weather, not the calendar: a provider can't disconnect you on a day the National Weather Service has issued a heat advisory for your area, or during a freeze when the temperature is forecast to stay at or below 32°F.

The protection is temporary — it pauses disconnection during the dangerous stretch; it doesn't cancel the bill. When the weather passes, providers have to offer a deferred payment plan so you can catch up over time instead of all at once. Texas has no fixed winter or summer shutoff ban; the trigger is the weather itself.

Source: Public Utility Commission of Texas

Electricity Relief Program ERP

A bill assistance program offered by Oncor, the transmission and distribution utility serving a large portion of North Texas, that provides a monthly bill credit to qualifying low-income residential customers. Eligibility is based on household income at or below 125 percent of the federal poverty level.

Source: Oncor

Federal Poverty Level FPL

An income threshold published annually by the U.S. Department of Health and Human Services, used to determine eligibility for many federal and state assistance programs. Eligibility limits are typically expressed as a percentage of the FPL — for example, 150% FPL — scaled by household size.

For a family of four in 2024, 150% of the federal poverty level corresponds to approximately $46,800 in annual gross income.

Source: U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation

Level / Average Pay

A billing option that smooths out your monthly electric payment so a brutal summer bill doesn't blindside you. Instead of paying for exactly what you used each month, you pay a steady amount based on your average usage over the past year. It makes budgeting easier, especially when Texas AC bills spike.

It changes the timing, not the total. The provider periodically "trues up" your account: if you've underpaid, you owe the difference; if you've overpaid, you get a credit. Ask your provider whether they offer it — the name varies (average billing, budget billing, balanced billing).

LITE-UP Texas

A discontinued state program that gave low-income Texans a discount on their summer electric bills. It was paid for by the System Benefit Fund, a small fee added to every deregulated electricity bill. The Legislature ended the fee in 2013, and the last discounts went out on August 31, 2016, when the fund ran dry.

People still search for LITE-UP, but it no longer exists, and nothing has replaced it at the state level. If you need help with your bill today, the closest program is the Comprehensive Energy Assistance Program (CEAP), run through your local community action agency.

Source: The Texas Tribune

Low Income Home Energy Assistance Program LIHEAP

A federal block grant program administered by the U.S. Department of Health and Human Services that provides funds to states to help low-income households pay their home energy bills. States receive the money and design their own delivery systems, so the application process and benefit amounts vary by state.

In Texas, LIHEAP dollars flow directly into the state-run CEAP program, so there is no separate LIHEAP application — applying for CEAP is the access point for federal LIHEAP funds.

Source: U.S. Department of Health and Human Services, Office of Community Services

Low Income List Administrator LILA

A Texas program that maintains a list of customers who qualify for low-income electric service benefits, such as deposit waivers or discounted rates. Retail electric providers use the LILA list to verify a customer's eligibility before granting income-based accommodations. Unpaid balances tied to LILA-based benefits are among the specific circumstances that can trigger a switch hold under PUCT rules.

Source: Public Utility Commission of Texas

Medically Fragile Designation

A general term for the protected status you get when someone in the home depends on keeping the power on for their health. In Texas this takes one of two official forms under PUCT rules: Critical Care (a life-sustaining device) or Chronic Condition (a serious illness that worsens without power). Either one requires a physician's certification.

Once you're on the list, your provider and your wires company have to give you extra notice before disconnecting and before any planned outage. You file the form with your transmission and distribution utility, and it has to be renewed on the schedule they set.

Source: Public Utility Commission of Texas

Texas Department of Housing and Community Affairs TDHCA

The Texas state agency responsible for administering affordable housing, community development, and energy assistance programs, including the Comprehensive Energy Assistance Program (CEAP). TDHCA distributes program funds to local agencies across the state rather than serving applicants directly.

Source: Texas Department of Housing and Community Affairs

Warming Center

A publicly designated location — such as a community center, library, or shelter — opened by local governments or organizations like the American Red Cross during extreme cold events to provide a safe, heated space for people without adequate heat at home.

Source: American Red Cross – Texas

Regulators & Protections

The agencies and rules that protect Texas electricity customers.

Administrative Law Judge ALJ

A state official authorized to preside over formal contested hearings when a PUCT complaint cannot be resolved through informal mediation. The ALJ reviews evidence, takes testimony, and issues a proposal for decision that the PUCT commissioners may adopt, modify, or reject.

Administrative Remedy

A resolution available through a government agency's own complaint or enforcement process, as distinct from filing a lawsuit in civil court. In the Texas electricity market, filing a PUCT complaint is an administrative remedy; it can compel a provider to issue a credit or correct an account but cannot award monetary damages the way a court judgment can.

Appliance Recycling Program

A program offered by some Texas transmission and distribution utilities that pays a small cash incentive — typically $35 to $50 — for a working but inefficient second appliance, such as a refrigerator, to be retired and recycled. The goal is to reduce overall electricity demand on the grid by removing old, high-consumption units from service.

Certificate of Convenience and Necessity CCN

A PUCT-issued authorization that grants a utility the exclusive right — and the obligation — to provide electric service within a defined geographic territory. Holding a CCN requires the utility to meet defined reliability and service standards, including restoring power within specified timeframes after an outage.

Source: Public Utility Commission of Texas

Complaint Ratio

A measure published by the Public Utility Commission of Texas that compares the number of formal complaints filed against a retail electric provider to that provider's share of the residential market. A lower ratio relative to market share suggests fewer billing or service problems per customer.

Shoppers can look up each provider's complaint ratio in the PUCT's provider directory before signing a contract.

Source: Public Utility Commission of Texas

Customer Protection Rules

The PUCT rulebook that spells out what a retail electricity company must and cannot do to you, covering deposits, disconnection, billing accuracy, contract disclosures, and how complaints get handled. These rules are why a company has to send you a clear plan summary and cannot cut you off without proper notice.

They live in Subchapter R of the PUCT's electric rules, sections 25.471 through 25.500 of the Texas Administrative Code, Chapter 25. If a provider violates them, the PUCT can take action against its license.

Source: Public Utility Commission of Texas

Deceptive Trade Practice

A business act or representation that misleads consumers — such as falsely claiming to represent a different company, making unsupported savings claims, or obtaining signatures under false pretenses. In Texas, such conduct is prohibited under the Texas Deceptive Trade Practices Act and can be prosecuted by the Attorney General.

Source: Texas Business & Commerce Code, Chapter 17

Distribution Cost Recovery Factor DCRF

A regulatory rider added to a TDU's delivery charges that allows the utility to recover costs from approved distribution infrastructure investments between full rate cases. The Public Utility Commission of Texas must approve the factor, and it appears as a separate line item or is folded into the TDU delivery charge shown on a customer's bill.

Source: Public Utility Commission of Texas

Do-Not-Call & Marketing Rules

State rules that limit how electricity companies can pitch you and ban switching your provider without your clear permission. Texas runs its own No Call Lists you can join to cut down on sales calls, and signing you up without consent (called slamming) is illegal.

The Texas No Call List is run by the PUCT, separate from the federal registry, and telemarketers must scrub registered numbers from their call lists. If a company switched your service without authorization or kept calling after you opted out, that is a complaint the PUCT will take.

Source: Public Utility Commission of Texas

DUNS Number DUNS

A nine-digit business ID that identifies your TDU in the system that moves your account between retail companies. You rarely see it, but when you switch plans, your enrollment carries your TDU's DUNS number so the right delivery company keeps serving your meter.

Each Texas TDU has its own DUNS number, for example Oncor and CenterPoint each have a distinct one. It is paperwork plumbing, but it is why a switch routes to the correct wires company.

Source: Public Utility Commission of Texas

Enforcement Action

A formal step taken by a utility regulator — such as the PUCT — to penalize a licensed provider found to have violated consumer protection rules. Enforcement actions can include monetary fines, required corrective steps, or in serious cases, suspension or revocation of a provider's operating license.

In 2023, the PUCT assessed more than $2.5 million in penalties through enforcement actions against retail electric providers for consumer protection violations.

Excessive Heat Warning

A National Weather Service designation issued when daytime high temperatures are expected to reach 105 °F or higher for at least two consecutive days, combined with nighttime lows above 75 °F. In Texas, an active Excessive Heat Warning triggers the PUCT Rule 25.483 disconnection moratorium, meaning retail electric providers may not disconnect residential customers for non-payment on those days.

For example, if the NWS issues an Excessive Heat Warning covering Dallas County on a Tuesday, a REP cannot legally disconnect a past-due residential customer in that county on Tuesday regardless of how large the unpaid balance is.

Source: National Weather Service – Heat Safety

Excessive Heat Watch

A National Weather Service designation issued when conditions are favorable for an excessive heat event within the next 24 to 72 hours but the timing or intensity is not yet certain. It is a step below an Excessive Heat Warning and signals that customers and providers should prepare for possible moratorium conditions.

Source: National Weather Service – Heat Safety

Federal Energy Regulatory Commission FERC

The independent U.S. federal agency that regulates interstate electricity transmission and oversees wholesale electricity markets. In Texas, FERC has jurisdiction over ERCOT's wholesale market operations and any interstate transmission, while the PUCT governs the retail market and consumer protections.

Source: FERC

Federal Reserve Discount Rate

The interest rate set by the Federal Reserve at which it lends money to commercial banks overnight. In the Texas electricity context, this rate is used as the reference benchmark for calculating the minimum interest REPs must pay on customer security deposits each calendar year.

Source: Board of Governors of the Federal Reserve System

Formal Investigation

An official regulatory inquiry opened by an agency such as the PUCT when an informal complaint reveals potential rule violations serious enough to warrant a structured review with documented findings. A formal investigation can result in fines, license conditions, or other enforcement actions against a provider.

FTC Cooling-Off Rule

A Federal Trade Commission regulation that gives consumers the right to cancel certain sales contracts — including door-to-door sales above a dollar threshold — within three business days of signing, with no penalty. In the electricity context, this window runs from the time a customer receives the Terms of Service.

Source: Federal Trade Commission

FTC Green Guides

Guidelines issued by the Federal Trade Commission that set standards for environmental marketing claims — including terms like '100% renewable' or 'clean energy' — to prevent deceptive advertising. Retailers and electricity providers must meet these standards when making green claims about their products or plans.

Source: Federal Trade Commission

Heat Advisory

A National Weather Service designation issued when daytime highs of 100–104 °F are expected for at least two consecutive days, with nighttime lows above 75 °F. Under PUCT Rule 25.483, an active Heat Advisory for a customer's county prohibits a retail electric provider from disconnecting that customer's residential service for non-payment on covered days.

Source: National Weather Service – Heat Safety

Informal Complaint

A complaint submitted by a consumer directly to a utility regulator — such as the PUCT — that triggers a required provider response but is handled through an administrative review process rather than a formal legal proceeding. Most consumer billing and service disputes are resolved at this level without escalating to a formal docket or hearing.

For example, a billing-error complaint filed through the PUCT's online portal is an informal complaint; it prompts the provider to respond within a set timeframe but does not carry the full procedural requirements of a formal contested case.

Interval Data Privacy

Legal and regulatory protections that restrict how utilities and retail providers may access, share, or sell a customer's detailed interval usage data without explicit consent. In Texas, these rules are established under PUCT Substantive Rule 25.130. Because fine-grained usage data can reveal behavioral patterns such as occupancy schedules, regulators treat it differently from aggregate billing information.

Source: PUCT Substantive Rule 25.130

NWS Forecast Zone NWS Forecast Zone

A defined geographic area used by the National Weather Service to issue weather advisories, watches, and warnings. In Texas, disconnection moratorium protections under PUCT Rule 25.483 are tied to NWS advisories issued for the forecast zone covering the customer's county, not to city-level or app-based temperature readings.

Customers can look up active advisories for their specific zone at weather.gov by entering their county or ZIP code.

Source: National Weather Service

Office of Public Utility Counsel OPUC

A separate state office that represents residential and small-business customers in cases before the PUCT. When a utility asks to raise the delivery charges on your bill, OPUC is the side arguing on your behalf.

OPUC is independent from the PUCT on purpose: the PUCT decides, OPUC advocates for the little guy in the room. It does not handle individual billing complaints, that goes through the PUCT.

Source: Office of Public Utility Counsel

Provider of Last Resort POLR

A backup retail company that keeps your power on if your current provider suddenly shuts down or loses its license. ERCOT moves you to the POLR automatically so your lights never go dark, then you are free to shop for a better plan.

The PUCT names which companies serve as POLR in each delivery area and reviews the list every two years. POLR service exists to prevent a gap, not to be a good deal: its rate is a variable holdover rate, usually higher than what you would find on the open market. If you land on it, treat it as temporary and switch as soon as you can.

Source: Public Utility Commission of Texas

Public Utility Commission of Texas PUCT

The state agency that regulates Texas's electricity market. It licenses the retail companies that sell you power, sets the customer-protection rules they must follow, and handles complaints when a provider does you wrong.

If a retail company breaks the rules, the PUCT can fine it or pull its license. Its consumer rules live in Chapter 25 of the Texas Administrative Code.

Source: Public Utility Commission of Texas

PUCT Complaint Process

The free path for getting a dispute with your electricity company settled when calling the company itself goes nowhere. You file with the PUCT, and the agency makes your provider investigate and respond, now within 15 days.

Start with your provider first, that is required, then file with the PUCT if it is not resolved. Keep your account number, bills, and notes on who you talked to; that record is what moves a complaint along.

Source: Public Utility Commission of Texas

PUCT Consumer Protection Division

The division within the Public Utility Commission of Texas responsible for handling residential electricity complaints, enforcing customer protection rules, and providing direct assistance to consumers who have disputes with REPs or TDUs. It operates a public phone line and accepts written complaints.

Source: Public Utility Commission of Texas

PUCT Office of Customer Protection

A division within the Public Utility Commission of Texas that investigates informal complaints filed by residential electricity customers, facilitates resolution between customers and providers, and can order reconnection or assess fines when a provider is found to have violated PUCT rules.

The informal complaint process is free, and providers are typically required to respond within 21 days.

Source: PUCT Consumer Complaint Information

PUCT Substantive Rule 25.111

A Texas administrative rule that requires energy consultants and brokers operating in the deregulated retail electricity market to disclose any compensation arrangement to the commercial customers they advise. The disclosure requirement is intended to help businesses evaluate whether a consultant's recommendations are influenced by financial incentives from a particular retail electric provider.

Source: Public Utility Commission of Texas

PUCT Substantive Rule 25.126 Rule 25.126

A Texas Public Utility Commission regulation that governs when and how transmission and distribution utilities may issue estimated electricity bills. It requires that an estimate be based on prior usage history, limits how many consecutive estimated bills may be issued, and mandates reconciliation with an actual meter read within a defined number of billing periods.

Source: Texas Administrative Code

PUCT Substantive Rule 25.478

A Texas administrative rule that governs the deposit practices of Retail Electric Providers, including when a provider may require a deposit, how large it may be, what interest rate must be paid on it, and when it must be returned to the customer.

For example, Rule 25.478 caps residential deposits at one-fifth of a customer's estimated annual bill and requires automatic refund after 12 consecutive months of on-time payments.

Source: Public Utility Commission of Texas

PUCT Substantive Rule 25.483

The Public Utility Commission of Texas regulation that governs the conditions and procedures under which retail electric providers and TDUs may disconnect residential electric service, including required notice periods, prohibited disconnection days, and extreme weather protections.

Source: PUCT Substantive Rule 25.483

Rate Case

A formal regulatory proceeding in which a utility petitions the PUCT for permission to change its tariff rates or charges. TDUs periodically file rate cases when their infrastructure costs change; approved adjustments affect the delivery charges that appear on every customer's bill regardless of which REP holds the account.

Source: Public Utility Commission of Texas

REP Certification REP

The license the PUCT requires before any company can sell you electricity in Texas. To get it, a retail electric provider (REP) has to prove it is financially sound, technically capable, and willing to follow the customer-protection rules.

Certification is not permanent, the PUCT can suspend or revoke it if a provider mistreats customers or goes broke, which is when its customers get moved to a Provider of Last Resort. You can confirm a company is certified on the PUCT's website before you sign up.

Source: Public Utility Commission of Texas

Self-Help Eviction

An unlawful landlord action intended to force a tenant out without going through the formal eviction process — for example, by cutting off utilities, changing locks, or removing doors. Texas Property Code Section 92.008 specifically prohibits landlords from interrupting electricity service as a means of compelling a tenant to vacate.

Senate Bill 3 (SB 3) SB 3

Texas legislation passed by the 87th Legislature in 2021 following Winter Storm Uri that strengthened weatherization and consumer-protection requirements for electric utilities and retail providers. Among other provisions, it reinforced obligations to protect residential customers from disconnection during declared weather emergencies.

Source: Texas Legislature Online

Switch-Hold

A lock on your meter that stops you from switching to a new electricity company until you clear up what triggered it. The most common cause is a deferred payment plan on a past-due balance, you have to finish paying before the hold comes off.

Switch-holds also get placed for suspected meter tampering. They are governed by PUCT customer-protection rules, and only the company that placed the hold can lift it once you have met the terms.

Source: Public Utility Commission of Texas

TDU Rate Case

A formal regulatory proceeding in which a Transmission and Distribution Utility (TDU) asks the Public Utility Commission of Texas (PUCT) to approve new delivery charge rates. When approved, the updated rates apply to every customer in that TDU's service territory, regardless of which retail electric provider the customer uses.

Rate cases typically occur every several years and reflect changes in the utility's infrastructure costs, storm recovery expenses, or capital investments.

Source: Public Utility Commission of Texas

Texas Administrative Code, Title 16 16 TAC

The section of the Texas Administrative Code that contains rules governing economic regulation, including the electricity market rules enforced by the Public Utility Commission of Texas. Specific sections within 16 TAC, such as Section 25.483, define customer protection requirements like the conditions under which a switch hold may be placed.

Source: Texas Secretary of State – Texas Administrative Code

Texas Attorney General Consumer Protection Division

The division of the Texas Attorney General's office responsible for enforcing the Texas Deceptive Trade Practices Act. It accepts complaints about fraudulent or misleading conduct by businesses, including electricity providers whose representatives misrepresent themselves or forge customer signatures.

Source: Texas Attorney General

Transmission & Distribution Utility TDU

The company that owns the poles, wires, and meter that physically deliver power to your home. You do not pick your TDU, it is set by where you live, and it is the same no matter which retail company you buy from. Oncor, CenterPoint, AEP Texas, and Texas-New Mexico Power are the big ones.

The TDU is who you call when the lights go out, and the delivery charges it bills are baked into every plan, regulated by the PUCT. Also called a TDSP (Transmission & Distribution Service Provider), the two terms mean the same thing.

Source: Public Utility Commission of Texas

U.S. Energy Information Administration EIA

The federal statistical agency within the U.S. Department of Energy that collects and publishes data on energy production, consumption, and pricing across all states. Its annual residential electricity reports—covering average household usage and state average rates—are the standard benchmark cited in Texas electricity comparisons.

Source: U.S. Energy Information Administration

Utility Property Damage Claim

A formal request filed with a transmission and distribution utility (TDU) seeking compensation for damage to customer-owned property caused by a utility event — such as a power surge during restoration or an improper reconnection after a storm. The utility investigates whether its equipment or procedures caused the damage; filing does not guarantee payment, and most utilities set a short window, often 10 business days, for submitting documentation.

Utility Tariff

The official schedule of rates, charges, terms, and conditions that a regulated utility files with and gets approved by the PUCT. TDU delivery charges visible on every customer's electricity bill are set by tariff; current tariff documents for all Texas TDUs are publicly searchable in the PUCT interchange database.

A tariff is a legal document, not a tax — the word has a specific regulatory meaning distinct from its common usage in trade policy.

Weatherization Requirements

Mandatory cold-weather preparation standards that PUCT and ERCOT impose on power generation facilities, requiring them to insulate and harden equipment so it can continue operating during extreme winter temperatures. These rules were significantly strengthened by Senate Bill 3 following the 2021 Winter Storm Uri failures.

Source: Public Utility Commission of Texas

Han Hwang

Consumer Advocate

Han turns industry jargon into plain English. He breaks down confusing rate structures, explains how to read an EFL, and identifies which plans actually save money versus those that just look cheap upfront. EFLs, TDU charges, tiered rates — if it's confusing, he makes it make sense.

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