How to Read and Understand Your Electricity Bill

Name: Electricity Plans for Texas Consumers who want a steady rate and a low average utility bill
Brand: Texas Electricity Ratings
Rating: 4.8 (17152 reviews)

Glossary

You will find some jargon on your bill, but we can decode it.

ESI ID (Electric Service Identifier)

This is the unique identifier of the electricity meter for your address.

If you have multiple meters (one for the house, one for the shed) you will have multiple ESI IDs.
Each ESI ID will generally get it's own bill, unless your current provider offers some sort of combined billing.

kWh (kiloWatt-hours)

A 'kWh' or 'kiloWatt-hour' is a measure of electricity usage.

One 'kWh' is equal to using a 1000 watt appliance for one hour.

To calculate the cost to operate an electrical appliance, use the following process:

Find the wattage usage of your appliance. For our example, let's say a hair-dryer uses about 1200 watts of energy.
If you divide the watts by 1000, you get kiloWatts (kW), so our hair dryer is consuming 1.2 kiloWatts when running.
Multiply 1.2 kW X 1 hour = 1.2 kWh (This is how much total energy was consumed)
If your electriciy rate is 15 cents per kWh, then running your hair dryer for an hour costs about 15 cents X 1.2 kWh = 18 cents.

Energy Charge

The amount you pay the provider for each kWh of electricity you use.

The 'Energy Charge' or 'Energy Rate' is the price in cents that you pay your electricity provider for the actual electricity that you consumed during that billing period.

With fixed-rate plans, your energy charge is consistent from month to month, so your bill will go up and down with your usage. You can check out our recommended fixed-rate electricity plans and order online.

Average Rate

Your total bill divided by your usage.

Your bill will likely show an 'average rate per kWh' or some variation of that. The average rate is the total of your bill (including all fees and taxes) divided by your kWh usage. Generally, your average rate per kWh will be slightly higher when you use less electricity, because there are monthly fixed fees that don't change, so when you use less, the average goes up a bit. Don't confuse 'average rate' with your 'energy charge', which is the amount you are being charged specifically for the electricity you use, and is separate from fixed monthly customer fees.

Bill Period or Cycle

The dates this bill covers. Your Texas utility company will read the meter at their discretion. This will not always be a month or 30 days. If you are on a plan that has "monthly" fees, that fee will appear on your bill, regardless of how many days were within the period.

Estimated Usage

Coming Soon

Energy Rate vs. Average Rate

the 'Energy Rate' is the price in cents that you pay your electricity provider for the actual electricity that you consumed. The 'Average Rate' is the total you paid for electricity service (including all TDSP fees, bill credits, taxes, etc) divided by the number of kWhs you used that month.

Average Bill

Most customers in Texas use about 1050-1400 kWh of electricity per month. According to various sources, the average electricity rate in Texas is about 11 cents. This would make the average Texas electricity bill about $115 to $154 per month.

Of course, if you have a higher electrical load than normal you will use more energy, and thus your bills can easily be higher than that. High load items would be things like a swimming pool or electric heat in the winter.

Your home size will have an impact on your usage. A smaller 600 sqft apartment might use 500-600 kWh, while an expansive 3,000 sqft. home could easily use 2,200 to 3,000 kWh.

TDSP)

The Transmission and Distribution Service Provider (TDSP) maintains your local electrical infrastructure

The TDSP is the utility company that maintains the power poles and lines in your area.

In Texas, there are five TDSPs serving deregulated areas:
CenterPoint Energy, Oncor Energy, TNMP, AEP-North and AEP-Central.

TDSP Delivery Charges and fees will show up on your bill in a couple ways - monthly fixed amounts, and per kWh amounts. These TDSP fees will be applied to your bill no matter who your provider is, although some providers might 'bundle' the rate, in which case they are included in your energy charge generally speaking.

Credits

Credits will reduce the amount you owe on your bill.

Usage Credits

A credit on your bill when your usage falls within certain thresholds.

Solar Buyback Credits

A credit you receive when your solar panels feed electricity to the grid.

There are a few angles to understand about Solar Buyback Plans:

Does the provider cap the credit at the total amount of your bill?
Will the provider 'bank' excess energy until the next month?
Does the provider pay you more or less for your electricity than they charge you for theirs?

We have vetted and reviewed Solar Buyback plans available for you to order online.

Deposit Refund

Your deposit may be refunded on your bill after 12 on-time payments

Taxes

Taxes will be applied based on your bill amount

Taxes are controlled and mandated by the state. They will be the same regardless of who you choose as your electricity supplier.

Sales Tax

Taxes assesed by city, county, and state governments.

Fees

Fees will increase the amount you own on your bill.

Early Termination Fee (ETF)

If you switch away from you will likely be charged an ETF (also known as a cancellation fee) unless you are on a month-to-month (no contract) plan.

These cancellation charges are allowed because has probably purchased electricity on the wholesale market to cover your expected usage, and if you leave, they are stuck with excess power that they have already paid for.

Late Charges

If you don't pay your bill by the due date, the provider is allowed to impose a late fee on your account. The late fee is limited to a percentage of your outstanding balance.

Disconnect Fees

Disconnect Notice Fees

Reconnection Fees

Monthly Recurring Charge (MRC)

TDSP Fees or 'Delivery Charges'

These are fees charged by your utility, and are present regardless of which electricity provider you have chosen.

Fees are charged from the utility and are passed on to the retail electricity provider

TDSP fees can be a fixed charged per bill, or a variable charge based on how much electricity you used during that period. There are a few providers that offer "bundled" rates, which include these fees in their Energy Charge. In bundled rates, your actual average rate will not change during the course of your contract (assuming the plan has no monthly charge).

Some of the TDSP fees you may be charged are:

Customer Charge

Distribution Cost Recovery Factor

Distribution System Charge

Energy Efficiency Cost Recovery Factor

Metering Charge

Nuclear Decommissioning Fee

PUC Assessment

System Restoration Charge

Transition Charge (1-5)

Transmission Cost Recovery Factor

Transmission System Charge

The TDSP fees charged and their amounts will vary depending on which TDSP services your area. As of May 2018, Oncor has the lowest per-bill charge at $5.25, while AEP-North has the highest, at $10.53 per bill. TNMP has the lowest average usage charges, at around 3.3¢/kWh, and CenterPoint is the highest, around 4.1¢/kWh.

Electric companies generally have the same energy charge applied, no-matter which TDSP the plan is in. The difference in the TDSP fees are the reason the same plan can cost around a penny higher in CenterPoint vs TNMP.

Fixed Rate Energy Plans tend to have the lowest average bills

All these plans feature a Fixed Rate from Energy Providers who currently hold a Gold, Silver or Bronze ranking by Texas Electricity Ratings