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How the EFL Benefits You

April 26, 2016
by dmirza

There are dozens of retail energy providers (REPs) that offer cheap electricity plans, and there could very well be over a hundred different energy plans available. When choosing a provider and plan, you want to make sure you know exactly what you’re paying for and don’t get surprised by any hidden charges. That’s why Texas has mandated all energy companies place an electricity facts label (EFL) on every plan they have.

The EFL is a document that details exactly how a plan came to display their advertised price per kilowatt hour (kWh). For example, a plan showing 9.3 cents per kWh could actually show in the EFL that you’re paying 4.2 cents per kWh for the electricity itself and another 2.7 cents for the transmission of each kilowatt hour. That only totals up to 6.9 cents, so where does the rest come from?How the EFL Benefits You

In the EFL, you’ll see a breakdown of all the fees associated with your plan. You’re paying 4.2 cents to purchase a single kWh, 2.7 cents to transmit it to your home, and you may also be paying a monthly base charge for the use of electricity, plus other fees like meter reading charges. All of these charges are combined and billed into the cost of the electricity, coming out to an average price like 9.3 cents per kWh. There are other factors that could affect the price of your electricity, such as usage ranges.

Some energy plans charge different amounts based on how much energy you use. For example, one plan may charge a $15 base charge and 9.3 cents per kWh until you reach 500 kWh. From 501 to 1000 kWh, there’s no base charge, and the rate is 10.6 cents. Over 1001 kWh, no base charge and a rate of 10.2 cents. Other plans may have their lowest rate in the middle range of usage, from 501 to 1000 kWh. Below or above that range, the cost is much higher.

The main purpose of the EFL is to show you all of this information in an easy-to-understand manner, so you know exactly what you’re getting. From electricity ranges, to waived base charges, to other fees like meter reading or smart meter fees are included in the EFL, leaving no doubt as to what you’re getting. You’ll also find penalties like early termination fees listed here if you disconnect your service before your scheduled end date.

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