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How to Read an Electricity Facts Label

The EFL is intended to help you cut through the clutter and provide an apples-to-apples comparison of electricity plans. The Public Utility Commission of Texas requires that every plan is accompanied by an EFL in an effort to help consumers avoid signing up for an electricity plan with charges they don’t fully understand. Arguably the most important information you will encounter on an EFL is a line item detail of recurring charges associated with a given plan.

But, a word of caution: While an EFL has to disclose all of the recurring charges associated with a given plan, consumers should also reference their Terms of Service for a better understanding of the non-recurring charges associated with the given retail electricity provider. Here is a more detailed overview of the individual components of an EFL.

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1. Average Price per kWh

This is what you can expect to pay per kilowatt hour (kWh) of electricity you use. However, this is an average price for each of the three values shown. You will only pay that price if you use exactly that much electricity. Champion recommends when shopping for a plan you grab both a high usage and low usage month bill and calculate what your average price would have been, given the plan details you’re reviewing.

2. Energy Charge

This is the rate the retail energy supplier is charging you. It sets the foundation for your kWh price, which is the biggest factor impacting your bill. This rate is 100% controlled by the retail energy supplier.

3. Base Charge

Also known as monthly use charge or fee. This is price you pay per month for electricity. Check to see if it’s a set rate (and doesn’t change each month) or if it requires a minimum amount of use.

4. TDU Charges

This field is representative of the amount per month as well as price per kWh the utility is charging. This rate is set by the utilities and cannot be changed by your retail energy provider. The average price per kWh uses this formula: ((Energy Charge + TDU per kWH Charge) * Usage + TDU Monthly Fee) / Usage.

5. Contract Term

Let’s you know how long you’re locked into a specific plan and rate.

6. Termination Fees

These fees are generally either a fixed amount, such as $150, or a dollar amount multiplied by the number of months left on your contract.

7. Renewable Content

How much of the electricity is sourced from green or renewable sources.

8. Pre-pay or Pay-In-Advance product

If yes, you will pay for electricity in advance of using it. If no, you will be billed each month for the days you’ve already been served.