Texas electricity bills can be confusing, filled with line items that seem designed to obscure the true cost of your power. Let's demystify each component so you know exactly what you're paying for.
The Basic Structure
Your Texas electricity bill typically comes from your Retail Electric Provider (REP), but it includes charges from multiple entities. Here's how it breaks down:
Energy Charges
This is what your REP charges for the actual electricity you consume. It's measured in kilowatt-hours (kWh) and is the rate you see advertised.
Example: If your rate is 10¢/kWh and you use 1,000 kWh, your energy charge is $100.
The advertised rate is often just the energy charge. Your actual cost per kWh will be higher once you include delivery charges.
TDSP Delivery Charges
Your Transmission and Distribution Service Provider (TDSP) charges for delivering electricity to your home. These charges include:
Per-kWh Delivery Fee
A charge based on how much electricity you use, typically 3-5¢ per kWh.
Monthly Customer Charge
A flat fee just for being connected to the grid, usually $5-15 per month.
Metering Charges
Fees for reading your meter and maintaining metering equipment.
Taxes and Government Fees
Several government-mandated charges appear on your bill:
| Fee | Purpose | |-----|---------| | State Sales Tax | Texas sales tax on electricity | | City Tax | Local municipal taxes (varies by city) | | ERCOT Fee | Supports grid management operations | | Nuclear Decommissioning Fee | Funds for decommissioning nuclear plants |
The Electricity Facts Label (EFL)
Every Texas electricity plan must provide an Electricity Facts Label. This document shows your true "all-in" price at three usage levels:
- 500 kWh - Low usage (apartment, efficient home)
- 1,000 kWh - Average usage
- 2,000 kWh - High usage (large home, heavy AC use)
Always compare plans using the EFL price at your typical usage level, not just the advertised energy rate.
Understanding Your Usage
Your bill should show:
- Current month usage in kWh
- Same month last year for comparison
- Daily average usage
- Billing period dates
Common Hidden Fees to Watch For
Base Charge
Some plans include a monthly fee ($5-15) regardless of usage.
Minimum Usage Fee
If you use less than a certain amount (often 1,000 kWh), you might pay a fee.
Early Termination Fee (ETF)
If you switch providers before your contract ends, fees can range from $50-200+.
Late Payment Fees
Usually $5-10 if you pay after the due date.
How to Calculate Your Real Rate
To find your true cost per kWh:
- Find your total bill amount
- Subtract any one-time fees
- Divide by your total kWh used
Formula: Total Bill ÷ kWh Used = Actual Rate
Example:
- Total bill: $150
- Usage: 1,200 kWh
- Actual rate: $150 ÷ 1,200 = 12.5¢/kWh
Reading Your Smart Meter Data
If you have a smart meter (most Texas homes do), you can access detailed usage data:
- 15-minute intervals of electricity use
- Peak usage times each day
- Historical comparison data
Access this through your REP's website or the Smart Meter Texas portal.
Spotting Billing Errors
Check your bill for these common errors:
- Estimated readings (should be actual)
- Incorrect rate applied
- Charges during periods you were away
- Duplicate charges
- Incorrect meter reading
Key Takeaways
- Don't trust advertised rates - Always check the EFL
- Know your usage pattern - Compare at your actual usage level
- Factor in delivery charges - They're a significant part of your bill
- Review monthly - Catch errors and unusual charges early
- Understand your contract - Know the fees before you sign
Understanding your electricity bill is the first step to taking control of your energy costs. Once you know what you're paying for, you can make informed decisions about switching plans or reducing usage.