Minimum usage charges, explained

The plan states a threshold — very commonly 1,000 kWh a month — and a fee, often around $9.95. Use more than the threshold and nothing happens. Use less, even by a single kilowatt-hour, and the fee is added to that month's bill.

It is the mirror image of a bill credit. A credit rewards you for crossing a line; a minimum-usage charge penalises you for falling short of one. Both make the advertised average price a description of one usage level rather than of your year.

Small households. A one-bedroom apartment, a part-year residence, or anybody whose mild-month usage sits in the 600 to 900 kWh range will pay the fee for several months a year, and on a small bill a flat $9.95 is a very large percentage.

It also catches households that improve their efficiency. Replace an old air conditioner, add insulation, or simply have a mild spring, and a plan that was economical becomes less so — the saving from using less is partly cancelled by the charge for using less.

Larger all-electric homes in Texas frequently stay above the threshold every month of the year, in which case the charge never applies and the plan behaves exactly as advertised.

It is on the Electricity Facts Label, usually near the base charge. The clearer tell is on the label's own price table: if the average price at 500 kWh is dramatically higher than at 1,000 kWh, something is being added at the low end.

This site does not hide plans that carry one — a market where they did not exist would be a market we invented. Every plan with a minimum-usage charge is labelled as such on its card, with a sentence explaining what the label means, and there is a separate list of the plans that carry none at all.