Texas Electricity Facts Label: Spot Fees Before You Switch
The cheapest rate on a billboard is often the least useful number on the page. In deregulated Texas, the document that actually tells you what a plan costs—and which fees can blow up a low-use month—is the Electricity Facts Label, or EFL. Read it before you switch, renew, or start service, and you can catch base charges, minimum-usage penalties, early termination fees, and delivery pass-throughs that marketing copy never leads with.
Why the Headline Rate Is Not the Bill
In competitive parts of Texas, you pick a Retail Electric Provider (REP) that sells the electricity, while a separate wires company—your Transmission and Distribution Utility (TDU)—delivers it, reads the meter, and keeps the poles standing. ¹ puts it plainly: deregulation changed who sells power, not who delivers it, and reliability still rides on the regulated wires company.
That split is why a glossy “¢/kWh” teaser can mislead. Your bill usually blends the REP’s energy price with TDU delivery charges and any recurring fees baked into the plan design. The Public Utility Commission of Texas (PUC) requires each plan to carry an Electricity Facts Label so shoppers can make an apples-to-apples comparison of rates, fees, and contract terms—the same role standardized labeling plays in other retail markets, as consumer-protection blueprints from the ² and the ³ have long argued for competitive electricity markets.
Not every Texan can shop. Choice depends on where you live; municipal utilities and cooperatives were not required to open to competition, so some ZIP codes have no competitive offers. ¹ tells residents to check the Plans page or call the state’s choice hotline if they are unsure. Elsewhere in the United States, retail choice is available only in certain restructured states, and the ⁴ notes that Texas customers connected to the ERCOT grid are generally required to choose a provider—unlike optional choice programs elsewhere.
What Texas Requires on Every Electricity Facts Label
Texas does not leave the EFL format to marketing departments. Under ⁵, the EFL must be unique for each product and disclose pricing in a standard layout: average price per kilowatt-hour at fixed usage levels, product type (fixed or variable), contract term, early termination penalties, fee lists, and renewable content compared with the statewide average mix.
For residential customers, that average-price table must show cents per kWh—rounded to the nearest tenth of a cent—at 500, 1,000, and 2,000 kWh per month. Small commercial EFLs use 1,500, 2,500, and 3,500 kWh. Those averages must reflect all recurring charges for electric service, excluding state and local sales taxes and reimbursement for the state miscellaneous gross receipts tax. In other words, the three-column price chart is designed to fold in the recurring pieces that turn an energy rate into a modeled all-in ¢/kWh at each usage band.
The disclosure chart on the same label answers blunt questions: Is there a termination fee, and how much? Can the price change during the contract, and how? What other fees may apply? Is this prepaid? Does the REP buy excess distributed renewable generation? What share of the product is renewable? ⁵ also requires REPs that offer residential products online to display the EFL without forcing you to enter personal information beyond a ZIP code and offer-type filters, and the printable EFL must fit in no more than two pages.
REPs must provide the EFL (along with Terms of Service and Your Rights as a Customer) at enrollment, whenever those documents change, and free of charge whenever you ask. If a company will not show you the label, treat that as a hard stop—not a negotiation tactic.
Delivery Charges: Fees That Follow You Across Retailers
Switching REPs does not switch your wires company. Oncor’s ⁶ explains the handoff: REPs market and bill for electricity; TDSPs (also called TDUs) deliver and meter it. Four TDSPs operate in deregulated zones—Oncor, CenterPoint Energy Houston Electric, Texas-New Mexico Power, and AEP Texas. The TDSP bills the REP for delivery; the REP bundles those charges into what you pay.
Oncor’s customer explainer ⁷ describes residential delivery as a fixed monthly component plus a per-kWh charge, often labeled as an Oncor TDU delivery charge on the REP bill. CenterPoint’s ⁸ similarly note that delivery charges include fixed meter and customer charges plus volumetric rates approved by the PUC, and that REPs may label the pass-through as a TDSP, TDU, or CenterPoint delivery charge.
Because delivery rates are set by tariff and approved by the PUC, shopping among REPs mainly changes the energy and fee stack the retailer controls—not whether you pay wires charges. A plan that looks cheaper only because someone omitted delivery from a quote is not cheaper; it is incomplete. ⁹ push exactly this check: does the quoted rate include electricity, transmission and distribution charges, and monthly customer or recurring fees?
Fee Traps Hiding in Plain Sight on the Label
Minimum usage fees and credits
¹ warns that many plans require a minimum monthly kWh. Use less and you may be charged a “minimum usage fee” or similar charge—sometimes not broken out cleanly on the bill. Typical cut-offs called out by the site include thresholds around 500 or 1,000 kWh. Some companies instead offer credits or fee waivers when you hit a usage band. Either way, the EFL is where you verify the rule before you enroll.
¹⁰ frames the same problem from the shopper’s side: base charges and minimum-usage fees often sit in the $5–$15 monthly range, and usage-threshold designs can make a low advertised energy rate expensive if your real load misses the band the plan was built around. Flat monthly fees hit harder at low usage; spread a roughly $10 base charge across 500 kWh and you add about 2¢/kWh to the average, while the same fee at 2,000 kWh adds about half a cent—math ¹¹ when explaining why EFL averages diverge across columns.
Early termination and non-recurring charges
Term contracts longer than a month often carry an early termination fee. WattKarma’s consumer guides commonly place those penalties in a ¹⁰ band depending on provider and term—exact amounts belong on the EFL disclosure chart and Terms of Service, not in memory. Under ⁵, month-to-month contracts may not contain a termination fee or penalty, and a customer who moves and provides required evidence and a forwarding address must not be assessed an early termination fee for leaving the contracted location.
Terms of Service—not just the EFL—must itemize non-recurring charges such as application fees, late payment charges, returned-check fees, and certain move-in or switch-related costs like out-of-cycle meter reads. The EFL points you to that list; skim both documents.
Taxes and what the average price leaves out
The modeled EFL average deliberately excludes certain taxes. Do not treat the cents-per-kWh table as a final invoice. Treat it as the standardized comparison tool for recurring electric-service charges at three usage points, then expect taxes and one-off fees to appear separately on the bill.
Fixed, Variable, and Prepaid: Reading Product Type Before Fees
¹² sorts the market into products that behave differently when wholesale prices swing.
A fixed-rate plan keeps the price per kWh steady through the contract, with narrow exceptions: changes in transmission and distribution fees, certain ERCOT or Texas Regional Entity administrative fees, or new governmental fees beyond the REP’s control. Fixed rates help budgeting; they also lock you out of market dips until the term ends.
Variable plans typically have no monthly contract or cancellation fee, but the kWh price can move month to month with the market and the company’s discretion—upside in falling markets, real downside when weather or scarcity spikes prices. Indexed (market-rate) plans tie the price to a disclosed formula based on a public index. Importantly, ⁵ prohibits REPs, aggregators, and brokers from offering indexed products to residential or small commercial customers on or after February 1, 2022, and wholesale indexed products on or after September 1, 2021. If you still see “index” language in older materials, verify the live EFL and product type against current rules.
Prepaid plans are pay-as-you-go: often no deposit and sometimes no long contract, but you must keep a balance ahead of usage. ¹² notes prepaid generally costs more per kWh than postpaid plans and can disconnect with little notice if the balance runs short. The EFL must disclose whether the product is prepaid.
Contract length itself is a fee decision. Plans may run month-to-month or stretch three years or more. Contracts of three months or longer may include cancellation penalties. Many plans default to a higher month-to-month price if you let a term expire without a new contract—another reason the expiration and renewal boxes on the label and Terms of Service matter as much as the energy rate.
Shop Power to Choose Against Your Real Usage
¹³ is the PUC’s official, unbiased shopping site where providers can list offers for free. The ¹⁴ is blunt about method: enter your ZIP, estimate average monthly usage from past bills, remember seasonal spikes (August heat and February cold show up in kWh), set a desired contract length, and use filters to screen plans with minimum usage fees or credits and tiered rates. You can also filter for fixed versus variable, prepaid, time-of-use, renewable share, and complaint-based satisfaction indicators.
After you narrow results, the guide says it is critical to open the Fact Sheet—the EFL—and read it carefully before you enroll. That step is the difference between sorting a table and actually spotting fees.
Before you call providers, ⁹ asking your current company for your total rate at 1,000 kWh average usage (excluding taxes and non-recurring fees), then walking new offers through a fixed checklist: all-in price at 1,000 kWh; whether delivery and recurring fees are included; fixed versus variable versus indexed and how changes are disclosed; contract length; deposit; payment options; what happens at expiration; late-payment consequences; early-break penalties; and any buy-back terms if you generate excess renewable power.
For low-use homes, apartments, vacation properties, or mild shoulder months, compare the 500 kWh column first. For larger houses in peak cooling season, weight the 2,000 kWh column. If your winter and summer shapes diverge sharply, rank finalists at both bands; a plan that wins only at exactly 1,000 kWh may be credit-engineered for a usage band you do not live in.
Switching, Rescission, and Contract Expiration Traps
¹ clarifies that there is no switching fee merely for changing providers, unless you request a special meter reading outside the regular schedule. Breaking an existing term contract can still trigger penalties under your current Terms of Service—read those before you “save money” with a new plan.
After you sign with a new company, ERCOT mails a switch confirmation. You generally have three federal business days after receiving the Terms of Service to cancel without fee, and the switch typically completes within seven business days with no service gap. You do not have to notify your old REP; ERCOT handles the handoff—but you remain responsible for any early-termination penalty owed to the old contract.
Slamming (switching without permission) and cramming (adding unauthorized charges) are illegal. Protect account numbers, read every bill line, and use the PUC Consumer Hotline at 1-888-782-8477 if something looks wrong, as outlined in the ¹.
Expiration is where fees and rate shocks hide for people who already “picked a plan.” For fixed-rate products, ⁵ requires multiple written expiration notices in the last third of the term, with final-notice timing tied to contract length. If you take no action after proper notice, the REP must move you to a default month-to-month renewal product you can cancel anytime without a fee—often at a less friendly price. Power to Choose also notes that for contracts with three or more months remaining, companies must send written expiration notice at least 30 days (or one billing cycle) and no more than 60 days (or two billing cycles) before the end. Shop before the default kicks in, and demand the EFL for any renewal offer.
If a REP leaves the market, you should not lose power: advance notice is typical, and Provider of Last Resort service exists as a backstop while you choose again.
Outside Texas: Choice States Still Need Disclosure Discipline
Retail choice is not a Texas-only story. ⁴ explains that some customers in restructured states can pick an alternate supplier while the distribution utility still delivers power. Separate ¹⁵ found that in 2021 about 26% of eligible U.S. residential customers outside the Texas mandatory-choice framework participated in state retail choice programs—roughly 13.2 million customers—with participation rates varying sharply by state.
Ohio, Maryland, and other choice markets may use different document names than “Electricity Facts Label,” but the shopping logic travels: get the full pricing disclosure, confirm whether delivery is included in the quoted supply rate, ask what happens after any introductory period, and compare offers at your actual kWh—not the marketer’s favorite usage point. ¹⁰ notes that Ohio and Maryland shoppers should likewise demand full pricing details before committing. In fully regulated markets, you may not pick a competitive REP at all; your job shifts to understanding the utility’s tariff, riders, and seasonal rate designs rather than hunting EFLs—but fee literacy still pays.
DOE’s older ² recommended disclosing supplier prices in cents per kWh at common residential usage levels such as 500, 1,000, and 2,000 kWh precisely so households can compare offers without decoding incompatible ads. Texas encoded that idea into the EFL. Use it.
A Pre-Switch Checklist That Catches Fees
- Pull 12 months of kWh from bills or your TDU’s usage portal and note seasonal highs and lows—guidance echoed in the ¹⁴.
- Ask your current REP for the all-in rate at 1,000 kWh so you have a baseline, per the ⁹ list.
- Search offers on ¹³, filter out minimum-usage and tiered structures you cannot meet, and open every finalist’s Fact Sheet.
- On each EFL, read the 500 / 1,000 / 2,000 columns that match your life, then the disclosure chart for termination fees, price-change rules, other fees, prepaid status, and renewable content required by ⁵.
- Confirm how TDU delivery appears in the average price, remembering the REP–TDSP split described by ⁶ and ⁸.
- Read Terms of Service for deposits, late fees, move-out rules, and what happens at contract end before you click enroll.
- Calendar the expiration window so you are not rolled onto an expensive month-to-month default.
The EFL will not make every plan cheap. It will make expensive surprises harder to hide. In a market built on choice, that is the edge that matters: spot the fees on the label first, then decide whether the switch is still worth it.
Editorial consolidation
Use the EFL to catch the fees generic “avoid hidden fees / don’t overpay / pick the right plan” articles used to repeat on separate URLs: base charge, minimum-usage fees, bill-credit cliffs, and TDU pass-throughs. Those pages now redirect here.