Why You Should Check Your Electricity Facts Label
Fort Worth’s energy market is deregulated, meaning you can choose your electricity plan from a variety of providers and plan options. Comparing multiple plans can feel confusing as terms, prices, and contract conditions all blend together. Enter the Electricity Facts Label (EFL) — your cheat sheet to help you understand the details of each individual electricity plan.
It’s important to thoroughly review and understand an EFL before signing up for a plan. Here are some of the most important details included on an EFL that you should keep in mind when shopping for an energy plan.
Average price per kWh
At the top of an EFL, you’ll find the average price per kilowatt-hour (kWh) listed for three usage tiers — 500 kWh, 1,000 kWh, and 2,000 kWh. The amount of electricity you use per month determines the rate your provider charges.
Underneath the price per kWh table, you’ll find a few charges written out, including a base charge, energy charge, and monthly bill credits (if applicable). An important thing to note is that the rates listed in the price per kWh table factor in these charges and credits. In fact, the rate listed next to the line item labeled “energy charge” is the true rate for this plan. Bill credits can lower the rate you ultimately pay, while base charges and additional fees raise the advertised rate slightly. Find a full explanation of how the average price per kWh is calculated on SaveOnEnergy.
Monthly TDU Charges
An additional fee noted on the EFL is the TDU or TDSP charge. This comes from your utility company. In Fort Worth, the utility is Oncor Electric. The utility charges a fee every month for delivering electricity to your home and maintaining power lines. This charge will vary by location and utility company. It’s also set by the utility for all customers in its service area, so you can’t lower the amount by using less electricity.
Rate type
Often listed as “type of product,” the EFL includes information about a plan’s rate type. The most common rate types are fixed and variable, although some providers offer indexed rate options. In a nutshell, fixed rates mean the base rate will stay the same for the duration of the contract. Variable and indexed rates will change depending on a few factors, including the wholesale cost of electricity.
Contract length
The EFL has a section noting how long a plan’s contract lasts. Most contracts last 12, 24, or 36 months. Some providers offer shorter contracts, with terms lasting one, three, or six months. Knowing how long a contract lasts is important because it’s the amount of time you’ll secure your electricity price for fixed-rate plans.
Termination fees
If you cancel your plan before the contract expires, your provider may charge an early termination fee (ETF). However, if you cancel service because you are moving, your provider should waive the ETF as long as you can provide proof of your change in address. Some ETFs are a single flat fee ranging from $100 to $250. Other plans charge a set amount for every month remaining on the contract, normally around $20 per month. Generally, plans with longer contracts have a higher ETF than those with shorter contract terms.
Renewable content
This section notes the percentage of renewable energy included in the plan. Every Texas electricity plan includes at least 7% renewable energy, but the statewide average is 33.3%. Some providers offer green energy plans with 100% renewable energy sourced from solar or wind energy.
Additional information
In addition to the details outlined on this page, EFLs also contain information about the following items:
- Whether your energy price can change during your contract
- Additional fees not covered in the top section of the EFL
- Whether the provider will purchase extra energy generated by home solar panels or wind turbines
- How to contact the provider
The EFL is the most important document to review when shopping for an energy plan. Knowing the details of a plan and how it differs from other options can help you choose the best electricity plan for your needs, budget, and energy goals. Providers will link a plan’s EFL in a section titled “plan documents” or something similar. You can pull up the EFL for every plan you’re considering, compare the details, and use it to help you choose your next energy plan.
This story was originally published August 12, 2024 at 7:00 AM.