Finding the best residential electricity rates in Texas requires a little bit of digging into the meat of a plan. Every plan is required by the state to have an electricity facts label, or EFL. This label explains the details of the plan, including a breakdown of how the residential electricity rates are derived. It’s important to look at these documents, as they will tell you the true nature of a plan. Some plans may look really good at first, but the EFL may say otherwise.

Some plans advertise a low rate, such as 8 cents per kilowatt hour (kWh). That sounds like a really good residential electricity rate, but is it really? Upon examining the EFL, you may come to find that the 8 cents per kWh only applies if you use between 501 and 1000 kWh of electricity within a billing cycle. If you use more or less than that range of electricity, your electricity rate could jump up as high as 10.5 cents or more per kWh.

The EFL will give you this information and a lot more. It will tell you what the base charge is, which is the amount you pay every month regardless of how much electricity you use, and it will also tell you if this fee is waived for using a certain amount of electricity in a billing cycle. Some plans like the example above may do that. They’ll waive the monthly fee over a certain limit, because it impacts the rate. The advertised rates generally take into account all of the fees and charges in a typical billing cycle.

The EFL also contains information regarding the energy content of your electricity. This means that they will tell you how much of your electricity comes from coal, nuclear, natural gas, and renewable energy. Anyone looking for a renewable energy plan should consult the EFL to ensure they are paying for a reasonable amount of renewable energy.

If the plan you have selected has a contract term, this will be listed in the EFL as well. The contract term determines how long your Texas residential electricity rate will remain the same. Fixed rate plans lock in your rate and do not change, regardless of market changes. If a piece of legislation alters the costs of generating or transmitting electricity, or if the utility makes changes to the cost of transmitting electricity, your rate could change, but normal market occurrences such as supply and demand will not affect it.