How to read an electricity plan

A cents-per-kilowatt-hour figure is a ratio, and ratios hide the fixed charges that make two plans with identical rates cost different amounts. Start with what twelve months costs at your usage.

Every plan on this site leads with that figure, calculated as twelve times the retailer's own published estimated monthly bill at the benchmark you choose. It is their number, not our model, and it already contains their base charges.

Is there a minimum-usage charge? Is there a bill credit? Is the rate the same at every hour of the day? Any of those three makes the advertised price a description of one scenario rather than of your year.

This marketplace refuses bill-credit, time-of-use and prepaid products outright and labels minimum-usage plans clearly, so on this site the answer to the first three is largely settled before you read anything. Elsewhere it is not, and the Electricity Facts Label is where to check.

How many months, and what does leaving cost? Those two together are the real commitment. A plan that is a few dollars cheaper per year but locks you in for three with a per-month termination fee is a different product from one that ends in twelve.

Finally, the expiry date. Write it down. A contract that lapses onto a default month-to-month rate undoes more savings than any amount of careful comparison creates.

"Free" nights or weekends. The hours really are free and the other hours pay for them; whether that is a good deal depends on when your household actually uses power, which an advertised average price cannot tell you.

"Up to X% renewable." The label carries a single published figure. If the marketing says "up to" and the label says a number, the number is the fact.

"No hidden fees." Every fee on a Texas plan is disclosed on the Electricity Facts Label, so this is true of essentially every plan sold in the state and distinguishes nothing. The question is not whether a fee is hidden but whether it applies to you.

"Lowest rate" or "cheapest plan". A rate is not a price, and a plan can hold the lowest advertised rate in a market and still cost more over a year than several plans above it.

Open the Electricity Facts Label. Read the average price at the usage level nearest your own bills. Check the term, the early termination fee and whether there is a minimum-usage charge. Multiply the estimated monthly bill by twelve and compare that number against the other plan you are considering.

That is the whole method. Everything else on a plan page is presentation.