How to read an Electricity Facts Label (EFL)

What is an electricity facts label?

An EFL, or Electricity Facts Label, is a document that provides important details about your electricity contract. It covers things like the terms of the agreement, pricing, and how to get in touch with the provider. In Texas, the Public Utility Council (PUCT) requires all retail energy providers to have one.

This is something you always want to give a thorough read before committing to a plan. It serves as a comprehensive guide to all the fees associated with the plan. However, they can be a bit tricky and complex to understand. That’s why we’ve created this breakdown of charges and typical contract terms might appear on your EFL so you know what you’ll be agreeing to.

Electricity facts label example:

Charges that you will see on an EFL include:

• The provider's energy rate - The price they charge for energy.
• The TDU’s (LP&L) delivery charge - This is the pass-through charge from the utility company.
• The TDU’s monthly charge - This is the monthly fee the TDU will pass through (TDU charges will be the same for all providers).
• All-in rate (average price per kWh) - This is usually shown at the top of your EFL. Typically this charge is broken down by 500 kWh, 1000 kWh, and 2000 kWh of monthly usage. This charge should include all of the fees listed on the EFL (excluding tax).

Additional charges and credits you might see:

• The provider’s monthly fee - Some providers may charge a monthly fee for their services.
• Early termination fee - This is the fee you will pay if you break the contract.
• Smart feature discounts - This might be in the form of a discounted rate or a monthly bill credit.
• Solar credits - If you signed up for a solar plan, the contract will disclose the price they will buy back your excess solar.

Additional information:

• Contract length - The duration of your contract.
• Type of product - This will be either fixed or variable. A fixed rate will not change while a variable rate will.
• Renewable content - The percentage of energy that comes from renewable resources.
• Contact information - This will include the company’s customer service number and email for support, office hours, and address.

How to calculate your bill

You may notice your rate fluctuates depending on how much electricity you use. We call this the "All-in rate "and it includes all charges listed on the EFL. Even though you have a fixed rate from your provider's energy charge, the all-in rate will change because it bundles the provider’s energy rate, the provider’s base charge, the utility provider’s energy rate, and the utility provider’s base charge. Here’s how you can calculate your bill:

(Energy charge + TDU’s energy charge) (total number of kWh used) + base fees = Cost of your bill

Divide the cost of your bill by your total number of kWh used to calculate your average price per kWh

Let's say you use 1000 kWh for the month. As shown in the example above, the price per kWh without a smart device connected is 10.78¢ and the TDU charge is 5.4694¢. The base charge is $10 per month and the TDU base charge is $4.39 per month.

Plugging those numbers in, this is what we get.

(10.78¢ + 5.4694¢) (1000 kWh) + $10 + $4.39

(.1078 + .054694) (1000 kWh) + 10 + 4.39

.1625 (1000 kWh) + $14.39

$162.50 + $14.39

Cost of your bill =  $176.89 

Divide this by the number of kWh you used to get the average price per kWh

176.89 / 1000 kWh = .1768

Average price per kWh = 17.68¢

This number will change depending on how many kWh you use.

FAQs

Where do I find the EFL?

On the provider's website, once you’ve selected a plan there should be an option to view details. Click this and there should be another option to view the electricity facts label

What is the TDU and what are utility charges?

The transmission and delivery utility (TDU) are the poles and wires of electricity. They are responsible for delivering the electricity to your home. They have charges that they pass through onto the retail energy provider’s bill. These charges will be the same across all retail energy providers. You’ll have your own utility provider depending on your area.

Does the all-in rate include solar credits?

The all-in rate should not include solar credits as the amount you export will not be the same every month. If you have solar panels and are planning to get on a solar buyback plan, keep this in mind when calculating your bill.