Understanding the Electricity Facts Label (EFL)

Every Texas electricity plan you can sign up for ships with a one-page disclosure document called the Electricity Facts Label.

The EFL is the only place the plan is required to tell you what it actually costs. Marketing pages can advertise any number they want. The EFL has to disclose the real one.

If you only read one document before signing a Texas electricity contract, read the EFL.

What an EFL is

The Public Utility Commission of Texas requires every Retail Electric Provider to publish a standardized one-page disclosure for every plan they sell. The format is set by PUCT Substantive Rule §25.475. Every EFL looks roughly the same, regardless of which provider issued it.

That's deliberate. The point of standardizing the format is to make plans comparable. You should be able to put two EFLs side by side and see, in two minutes, which plan costs you less.

What's on the EFL:

• A three-column average price per kWh table at 500, 1,000, and 2,000 kWh of monthly usage
• The energy charge (per-kWh rate the REP charges)
• The TDU delivery charges (per-kWh and monthly, set by your local wires utility)
• The base charge (flat monthly fee, if any)
• Bill credit terms (threshold, amount, eligible usage band)
• Minimum usage fees (penalty if you fall below a usage threshold)
• The contract term and early termination fee
• Renewable energy percentage
• Auto-renewal language

What's not on the EFL: a TV ad. A promo code. An influencer endorsement. The EFL is engineered for accuracy, not persuasion. It's not designed to sell you the plan — it's designed to keep the REP from misrepresenting it.

The three-column table is the whole document

The single most useful thing on an EFL is the average-price-per-kWh table. It shows you what you'll actually pay, blended across all charges, at three usage levels.

For a representative bill-credit plan, the table might look like:

The advertised rate on the marketing page is the 1,000 kWh column. Notice what happens at the other two:

At 500 kWh, the rate is 53% higher. That's because the plan has a bill credit (say, $50 off if you use 1,000+ kWh), and at 500 kWh you don't get it. You're paying the underlying per-kWh rate without the discount.

At 2,000 kWh, the rate is also higher than at 1,000. That's because the bill credit is capped or the per-kWh rate steps up at higher usage tiers.

The plan is engineered to be cheapest at exactly the number it advertises. If your actual usage isn't 1,000 kWh, the advertised rate is fiction.

TDU charges vs. energy charges

The EFL breaks your bill into two halves: the energy charge and the TDU delivery charge.

The energy charge is what your REP charges you for the electricity itself. This is where competition happens. Different REPs offer different energy charges, and that's the number you're shopping.

The TDU delivery charge is what your local wires utility charges to physically move the electricity from the grid to your meter. There are six TDUs in deregulated Texas: Oncor (DFW, Central Texas, West Texas), CenterPoint (Houston), AEP Texas Central (South Texas), AEP Texas North (West Texas), TNMP (scattered pockets), and LP&L (Lubbock — newest, joined the competitive market in 2023). Your TDU is determined by where you live. You can't shop it.

TDU charges are set by the PUCT in rate-case proceedings and are identical for every REP serving the same TDU territory. If two plans show different TDU charges on the EFL, one of them is misrepresenting the math.

Here's why this matters: when a REP shows you a low "rate," they sometimes bury part of the cost in the TDU pass-through line. Always check what the EFL shows for both the energy charge AND the TDU charges. The total is what you pay.

Bill credits are where most plans hide the trick

The single most common mechanism in modern Texas EFLs is the bill credit. The plan offers a flat dollar credit (typically $25–$100) when your monthly usage falls inside a specific band — almost always 1,000–1,999 kWh, sometimes 2,000–2,500 kWh.

The credit is the entire reason the advertised rate looks competitive.

A plan advertising 9.5¢/kWh at 1,000 kWh might actually have a 13.0¢ underlying energy rate plus a $35 bill credit. When you use exactly 1,000 kWh, the credit reduces your effective rate to 9.5¢. When you use 950 kWh, you don't get the credit, and your effective rate is the full 13.0¢ (plus TDU charges).

Read the bill-credit terms on the EFL line by line. Three things to confirm:

• The threshold. What's the minimum usage to qualify? If your monthly usage routinely dips below it, the plan is wrong for you.
• The cap. Some bill credits stop at an upper threshold (e.g., $35 off for 1,000–1,999 kWh, $0 above). Check it.
• The credit amount. A $20 credit at 1,000 kWh moves your effective rate less than a $75 credit at the same threshold. Bigger credits create bigger cliffs.

Minimum usage fees: the small penalty almost nobody reads

Many EFLs disclose a flat monthly penalty (often $5–$9.99) charged when you use less than 1,000 kWh.

This is a separate gotcha from the bill credit. A plan can have both: lose the bill credit AND pay the minimum usage fee. A 700-kWh month on the wrong plan can run 40% more than it should.

Apartments and snowbirds get hit hardest. If your usage routinely falls below 1,000 kWh, search for "minimum usage" on the EFL and rule out any plan that has one.

Auto-renewal is the other side of the contract

Near the bottom of every EFL is the auto-renewal language. This tells you what happens at the end of the contract term.

The default in Texas is: when your contract ends, the REP switches you to a month-to-month variable rate. That rate is almost always significantly higher than the fixed rate you were paying. Sometimes 50–100% higher.

The EFL is required to disclose this. The REP is also required to notify you 14–60 days before contract expiration. But it's still on you to shop a new plan before the rollover hits.

Mark your contract expiration date on a calendar the day you sign. Shop 30 days out. Don't let the auto-renew happen by default.

How to read an EFL in under two minutes

A clean reading workflow:

1. Find the three-column average-price-per-kWh table. Pick the column closest to your actual monthly usage. That's your real rate.
2. Check the bill credit terms — is there a threshold you might miss?
3. Look for "minimum usage fee" — if there is one, treat it as a red flag for smaller homes.
4. Read the contract term and the early termination fee — make sure both fit your timeline.
5. Read the auto-renewal language — what happens at month 13 of a 12-month plan?

If the EFL is missing any of these, the plan is non-compliant. Walk away.

The honest close

The EFL exists because Texas tried deregulation without disclosure once, in the early 2000s, and the result was a market full of teaser rates and surprise charges. The PUCT mandated the EFL format specifically to give shoppers a tool they could rely on.

The market still tries to direct your attention away from the EFL — back to the marketing page, the headline rate, the "Cheapest in Texas!" banner. The EFL is the antidote to all of it.

Two minutes per plan. That's the entire defense.

» MORE: Fixed vs. variable rate plans · How to choose a provider