How to Read an Electric Bill in Texas

During the summer months, most people start to notice their electricity bills going up. Hotter temps mean more air conditioning and more energy usage.

We’re here to break it down for you step by step. By the end of this guide, you’ll be able to read your electric bill like a pro and spot any discrepancies that might be costing you extra bucks.

Understanding Your Electric Bill

Your electric bill is more than just a piece of paper telling you how much you owe. It's packed with important information about your energy usage, charges, and plan details.

We recommend reviewing your bill every month. Not only will it help you budget more effectively, it could save you money. Energy companies make mistakes. Customers get charged fees and rates they shouldn't. You can avoid this with a quick 30-second review of your bill.

Here’s a breakdown of what to look for:

1. Account Information

This section typically includes your account number, billing period, and contact information. Make sure this information is correct, as errors here can lead to bigger issues down the line.

Pro Tip: Add a reminder in your phone 3 months before your expiration date so you can start shopping for plans before your current plan expires.

Here's what this looks like on my bill:

2. Usage Summary

This is where you'll find details about your energy consumption, usually measured in kilowatt-hours (kWh). Look for graphs or charts that show your usage over the billing period and compare it to previous months. This can help you identify any unusual spikes in usage.

Here's an example from my bill in June:

If you notice a significant increase in usage, consider whether you’ve added new appliances, had guests, or changed your energy habits.

My bill doesn't include a month-over-month summary of my usage. But, I can log in to my account to see this information. One interesting thing you can see in my electricity usage is the day I left on vacation. I turned the AC up to 79 degrees. Just a friendly reminder that your AC is the biggest energy hog in your home.

3. Charges Breakdown

Here’s where things get a bit more detailed. Your charges will usually be divided into several components:

• Energy Charge: This is what you pay per kWh based on your rate plan. This is the piece of the bill where you have a choice.
• TDU Delivery Charges & Meter Charges: These are fees charged by your local Transmission and Distribution Utility for delivering electricity to your home. These are standardized and cannot be changed.
• Base Charge: A fixed monthly fee that some providers charge regardless of your usage. In my example below you can see that my plan has a base charge of $4.95.
• Taxes: These include state and local taxes on your electricity usage. Nothing you can do about these.

Here is an example from one of my electric bills from Good Charlie Energy:

4. Rate Plan Details

Your rate plan dictates how much you pay per kWh. In Texas, there are typically two types of rate plans:

• Fixed-Rate Plan: You pay a set price per kWh for the duration of your contract. This provides stability and predictability.
• Variable-Rate Plan: The price per kWh can change based on market conditions. This can be risky, as rates may spike unexpectedly.

Your electricity bill will likely have something that shows you the average rate you paid for electricity per kWh. On my bill, it looks like this:

There is one more layer of complexity here. Bill credit plans and time-of-use plans (AKA "free nights" or "free weekends") are considered fixed rates, even though the rate structure is a bit more complicated. We have an in-depth guide for free nights and weekend plans here.

But in short, we do not recommend bill credit plans or free nights plans. They just don't work for 99% of people.

5. Additional Fees and Taxes

Beyond the basic charges, be on the lookout for additional fees that can add up:

• Late Payment Fees: If you miss a payment deadline, you might be charged extra.
• Early Termination Fees: If you break your contract early, you could face penalties.
• Service Fees: Some providers charge for services like paper billing or meter reading.

Practical Tips for Reading Your Electric Bill

1. Compare Monthly Usage: Track your monthly usage to see if there are any significant changes. This can help you spot inefficiencies or potential issues early.
2. Check the Rate: Verify that you’re being charged the correct rate based on your contract. If you’re on a variable or indexed plan, keep an eye on rate changes.
3. Look for Errors: Mistakes can happen. Ensure all charges are correct and match your usage.
4. Understand TDU Charges: These are non-negotiable and set by your local utility, but understanding them can help you anticipate your bill.
5. Review Additional Fees: Identify any fees that might be avoidable, like paper billing fees, and opt for electronic billing to save money.

Example Electric Bill Walkthrough

Let’s walk through a sample electric bill to put all this into practice. Below is my bill from June. I've labeled some of the important pieces.

Sample Electricity Bill

Common Questions and Issues

Q: What if my usage seems unusually high? A: Check for any new appliances or changes in your household that could explain the increase. If nothing stands out, consider having an energy audit to identify inefficiencies.

Q: How can I lower my electric bill? A: Simple steps like using energy-efficient appliances, sealing windows and doors, and using a programmable thermostat can make a big difference. If you think you use too much electricity you can compare your electricity bill to the average electric bills in Texas here.

Q: What should I do if I find an error on my bill? A: Contact your electricity provider immediately. Have your account information and bill details handy to expedite the process.

‍