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Are you ready to save hundreds on your electricity bill?

Discover how to get the best electricity rates in Texas - within seconds!

How to Read an Electricity Facts Label - A Step By Step Guide

Buying electricity in Texas is completely overwhelming! Even understanding how to read Texas electricity facts labels is difficult! With so many REPs with so many different plans, it’s impossible to know if you are getting the best deal.

On top of that, once you find your plan, you have to read the fine print to see what kind of commitment you are making to an electric company. 

You need a wizard with a truth serum to help you cut through the empty promises and find the best deal. 

Enter The Power Wizard Shopping Tool!

Our innovative tool will help you find the perfect plan and make sure you aren’t duped by any confusing loopholes!

Let us find you the best plan in seconds and start saving.


What is an Electricity Facts Label?

Power lines against the sky - How To Read Texas Electricity Facts Label

An Electricity Facts Label (also known as an EFL)is the small or fine print in an electricity contract. The Electricity Facts Label is in a standardized format so with some guidance, you can read through it efficiently so you know what you’re getting into before you choose an electricity plan.

An Electricity Facts Label is also a useful tool if you already have an electricity plan.

It contains all of the information about your current plan, fees, and terms so you can determine if there is a better plan for you when comparing what you have with other electricity plans available on the market.

Why is it important to understand an EFL?

Consumers in Texas have the right to choose their electricity company. Electricity companies in Texas are known as Retail Electric Providers (REPs). Each REP offers different electricity plans, and consumers are able to choose which plan they want as well.

Choosing the right electricity plan is not quite as easy as it sounds. Reading the EFL is the foundation for comparing electricity plans.

Again, that sounds pretty easy, right?

  1. You read a label
  2. Pull some facts and figures from it
  3. Compare what you have compiled
  4. Pick a plan

Yeah, not so much.

The Electricity Facts Label contains a lot of jargon, which makes it extremely difficult to interpret on your own. If you cannot interpret the Electricity Facts Label, then it becomes challenging to truly choose the best electricity plan for your needs.

There is a solution, however. Power Wizard is an unbiased third party. It is NOT an REP.

Power Wizard has a handy tool, the Shopping Tool, which uses a few key pieces of information about your home or apartment and electricity usage and enters it all into our unbiased algorithm to choose the best plan for you (Electricity Facts Label reading on your behalf).

This eliminates the unnecessary headache of trying to decipher everything alone.

Deregulated Energy

Electricity in many Texas cities is deregulated, which means that the government doesn’t have as much control of electric utilities. Deregulation allows individual electricity companies to sell electricity directly to consumers.

The ability to choose an REP

Deregulation is what also allows consumers to choose who to buy electricity from.

Deregulation has led to over 130 Retail Electric Companies popping up to compete for your electricity business.

Keep in mind that not every city in Texas is deregulated, though. For example, San Antonio is still regulated.

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It Affects How Much You Spend on Electricity Each Month

Remember that the Electricity Facts Label contains the small, fine print on fees, terms, and conditions for that particular electricity plan. All of these fees, terms, and conditions directly affect how much you spend on electricity each month.

Why Does an EFL Affect My Bill?

Since an Electricity Facts Label provides you with the numbers you need to know to calculate the estimated monthly electricity bill, it affects your bill amount.

Each plan is different and has different fees.

Some plans:

All of these small-print conditions, fees, and charges can affect your monthly electricity bill and how much you end up paying, which is why it is so important that you carefully read the Electricity Facts Label.

How To Read Texas Electricity Facts Label

Mother with child - How To Read Texas Electricity Facts Label

Now that we have made it clear how important it is to read an Electricity Facts Label, it is time to start reading and deciphering what it means. But how to read electricity fact labels can be tricky so here is a breakdown of what to expect.

4 Main Parts Of An Electricity Facts Label

Earlier, we told you that the Electricity Facts Label is in a standardized format. The format is broken down into four primary parts.

Part 1: Header

The first section you see on the Electricity Facts Label is the header. This section of the EFL spells out the start date of your contract, the name of the REP providing electricity service, and the type of plan you have signed up to use.

If you are reviewing an Electricity Facts Label prior to signing a contract, then the EFL is not going to contain all of this information because you do not have a contract yet.

The rest of the information on the label still pertains to you.

Part 2: Electricity Price

The second section of the Electricity Facts Label is the electricity price section. This section is probably the most important section of the Electricity Facts Label.

This area of the EFL lists out all of the charges that are going to show on your bill.

The fees listed include:

Generally, there is a chart that shows the average rate per kWh, or average electricity rates, so it’s not going to be your exact rate.

The chart normally shows the average rate for using 500, 1000, and 2000 kWhs since rates can vary according to the usage amount.

You may also see a TDU flat rate and a TDU per kWh rate. These rates are fees charged for the transmission and distribution of electricity.

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Part 3: Disclosure Chart

The disclosure chart of the Electricity Facts Label really gets into the nitty-gritty of the contract. This is probably the most telling section of the EFL.

Generally, this section of the Electricity Facts Label is short and to the point. It contains the terms and answers to questions that do not really fit into the other sections or areas of the Electricity Facts Label.

Some of the information you can expect to find in this section include:

All of the information on the Electricity Facts Label should be taken into consideration in order to analyze and choose the best electricity plan for you and your family.

If you choose to read and analyze the label on your own, you have to go through a manual evaluation process — and still, then you may not be able to come to the correct conclusion on which electricity plan is truly right for you.

Your other option is to allow Power Wizard and the Shopping Tool to analyze all of the information on the Electricity Facts Label and about your personal electricity needs.

Our unbiased algorithm will do all of the hard work for you.

The Shopping Tool truly chooses the best plan out there for you and your needs.

Using An Electricity Facts Label Calculation

Happy family with drinks - How To Read Texas Electricity Facts Label

Unfortunately, there is not a true EFL calculator where you can simply type in a few numbers, hit enter, and out spits the answer to what your monthly electricity bill is going to be. Instead, you have to use a formula to calculate the answer manually.

The formula for calculating a monthly electricity bill based on information from the Electricity Facts Label is:

(Electricity Facts Label Energy Charge x kWh used) + Fixed TDSP fee + (Variable TDSP fee x kWh used) + Other Fixed Monthly Charge = Estimated Electricity Bill

What is a base charge for electricity?

The Public Utilities Commission defines a base electricity charge as a “flat fee applied each month regardless of the amount of … kWh used.” It is a monthly fee that REPs assess to cover the administrative costs of billing and customer service.

The base charge for electricity is not the same, however, as a minimum usage fee. A minimum usage fee is an additional fee assessed if you do not use the minimum kilowatts as set in your contract.

How to calculate the average monthly price?

Using this formula:

(EFL Energy Charge x kWh used) + Fixed TDSP fee + (Variable TDSP fee x kWh used) + Other Fixed Monthly Charge = Estimated Electricity Bill

Pull the figures from the Electricity Facts Label to plug into the appropriate place in the formula. This calculation is an estimate. There is, of course, no way to calculate your exact monthly bill until you start using electricity.

You can read and manually plug and chug figures into this formula to calculate an estimated monthly electricity bill…

OR

You can type in a couple of pieces of information online into the Shopping Tool to calculate everything for you and tell you the one electricity plan that fits all of your needs.

Discover the best electricity rates.

Power Wizard finds you the best electricity plan and ensures you won’t overpay for electricity again.

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Choosing A Better Plan

The best electricity plan differs from person to person depending on many individualized factors.

Some of the factors to consider are:

Knowing how to choose a better plan than the one you have now not only requires you to take all of this information into account but also requires you to consider that:

Not only does taking all of this information into consideration make it highly difficult for you to choose a better electricity plan, but it makes it nearly impossible to do so.

Power Wizard can really come to the rescue here.

The Shopping Tool takes all of these factors into consideration so you don’t have to. It ensures that you also have the best plan for you, even if it means switching from the plan you have to get into a better electricity plan.

As an added bonus, Power Wizard stays on top of it. Our algorithm is:

As an added bonus, you do not have to know how to switch electricity providers because Power Wizard does this for you, too.

Keep in mind that even after you choose a plan, you have to go through the process of making the switch to a new provider and a new electricity plan.

Comparing EFLs To Choose Manually

Pulling information from Electricity Facts Labels is where you can start your comparison to see which electricity plan is the best one for you. These labels provide you with all of the information you need to calculate and estimate your monthly electricity bill.

Of course, this involves pulling numbers from the EFLs to plug into a complex formula to calculate what is only an approximate electricity bill amount.

You have to do this hundreds of times to compare the hundreds of plans that are available to you.

Remember, there are over 130 Retail Electric Providers out there. Each of these REPs offers multiple plans.

This can lead to you creating long and complicated spreadsheets that take you days and days to create.

Then, you have to go back through and decipher all of the data you have compiled.

What this manual process usually ends up leaving you with is a big fat headache — and still not knowing which electricity plan is the best one for you and your needs.

Save Days (And A Migraine) Using Power Wizard

There is a better, faster, simpler, and headache-free way to find the best electricity plan for you or to switch to a better plan.

This way is using Power Wizard. The Shopping Tool eliminates your need to:

Let the Power Wizard Shopping Tool do the work for you today. Simply input some basic information, such as:

Once you do this, Power Wizard takes about 5 minutes (or less) to scour all of the plans available to you, read the Electricity Facts Label, and choose THE best electricity plan for your needs.

It’s your choice.

You can find the best electricity company the hard way OR you can use Power Wizard to find the best electricity company the easy way.

Let us find you the best plan in seconds and start saving.