How to Read an Electricity Facts Label | The Light Lab

How to Read an Electricity Facts Label

If you’re in the market for a new Texas electricity plan, chances are you’ve come across an Electricity Facts Label – also referred to as an EFL. Whether this is your first time shopping for an electricity plan, or you’ve signed up for your fair share of electricity plans, reading and understanding an EFL can be difficult. However, that shouldn’t deter you from not fully understanding the EFL associated with the electricity plan you are interested in signing up for. Just like any other contract you’ve signed – think your phone, cable or insurance contracts – it’s important to fully understand what kind of charges will be associated with the electricity plan you sign up for your Texas home.

What exactly is an EFL?

An EFL is a contract that spells out all the specific details of the electricity plan in question. It’s here that customers can find the length of the contract, the electricity price, whether or not there is an early termination fee, and what type of electricity rate the customer will receive.

All Texas electricity companies are required to have an EFL for every single electricity plan they have on the market. This is to provide Texas residents with all the information they need to make an informed decision and choose the Texas electricity plan that’s right for them.

What information is provided in the EFL? 

How to Read an Electricity Facts Label | The Light Lab

Let’s jump in and look at the information that is included in an EFL and how to interpret it:

  • Electricity Price: This is the average cost, per kilowatt-hour of energy, that is charged to a customer. Prices are shown in 500 kWh, 1000 kWh and 2000 kWh usage levels. These prices show the average cost, which includes an energy charge, a delivery charge, and sometimes, a minimum use charge. It’s important to know that these ranges are examples that tell the customer how much they should expect to pay if they use that amount of energy in a month.
  • Type of Product: Here you will find information about the type of electricity rate you will be receiving: a fixed, variable or indexed electricity rate.
  • Contract Term: Here you will find information about whether or not the electricity plan is a contract plan, and if so, how long the minimal term is. Right under the contract term you will also find information about whether or not there is an early termination fee and if so, how much you will be charged if you choose to end the electricity plan before the contract term ends.
  • Price Changes: The next few boxes show whether or not the electricity rate can change during the contract term, and if so, by how much. This section will also include any additional fees you could see in your Texas electricity bills.
  • Sources of Power Generation: This section tells you what percentage of your power comes from where (nuclear, renewable, natural gas or coal).
  • Emissions and Waste per kWh Generated: This section gives data on how many emissions are released when producing electricity from the sources listed in the “power generation” section.

When shopping around for a new electricity plan or provider, make sure you always ask for an EFL. Understanding the electricity plan you are about to sign up for will help you make an informed decision as you find the best Texas electricity company that best meets your home’s needs.

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