What is an Electricity Facts Label (EFL) and Why Does it Matter?

The Texas Public Utilities Commission describes the Electricity Facts Label as resembling a “nutrition label” for energy plans. Just as a nutrition label gives you the exact ingredients and nutritive values for a food item, the EFL presents the terms of any specific electricity plan in well-organized detail, so that you know what you are being charged for and what you are entitled to receive. In most public materials, electricity providers are required only to present approximate costs. These are usually derived from an analysis of charges for a specific or similar plan and are designed to help you determine whether charges up to or in the approximate range of the plan fit your budget and your needs.

In the face of constantly changing power costs, an EFL lets electricity providers give you a fairly clear picture of what a plan is likely to cost. If you are willing to look at plans only in the range of 14 cents per kilowatt hour for a usage around 2000 kWh, the sample costs will let you do a rough sorting of possible plans.

Like a sign at the farmers’ market, approximate pricing can signal a possible bargain: apples at $1.00 a pound. What the sign won’t tell you, though, is whether the apples were grown in an organic orchard. It won’t point out the basket of free apples from which your six-year-old is welcome to choose a snack. It won’t mention a discount price for buying a whole bushel. For the real story of these real apples, you need to talk to the farmer. An EFL lets you talk to the farmer.

Using Electricity Facts Label to Your Advantage

Collecting an electricity facts label for every plan that interests you gives you another advantage. Unlike ads and articles about electricity plans, EFL information is presented in a consistent format for every plan. This is a great time-saver for consumers. For every plan, information is presented in the same way, with Electricity Price information first. This section explains the formula used to construct the price for this particular offer, along with a detailed explanation of special features. For example, a TXU plan, “Season Pass,” offers large discounts for 3 winter months and 3 summer months.

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The EFL explains the amount of the discount and the exact dates included in the discount period. This particular EFL then goes on to explain how differences, if any, between the provider’s billing calculations and information from the “smart” meter that is an integral part of the offer will be resolved. Understanding how your provider calculates your charges can be very helpful in choosing a plan and critical in a situation where you believe the charges are wrong.

Key EFL Terms and Questions

The next section, Other Key Terms and Questions, is a set of answers to routine questions: items outside electric power that are part of your bill (like sales tax), the type of contract, the term of the contract, the existence and amount of cancellation fees, and the reasons or authorities that can cause a price change during the term of the contract.

The third section, Disclosure Chart, answers questions about additional fees, prepaid- or advance-payment features, and renewable energy sources. It also contains detailed contact information for the electricity company offering the plan, along with a reference number that will help assure that provider and consumer are discussing the same offer.

What is an Electricity Facts Label (EFL) and Why Does it Matter?

Challenges of EFLs

Admittedly, some of the information presented is still challenging for some consumers to absorb. The EFL has, however, made a great contribution to the goals of providing buyers with well-organized, clear information in a format that makes comparing energy plans as easy as possible. Having it in the same format for every plan means that you spend less time hunting for information and do not have to make an elaborate chart to compare plan terms with each other.

It may still take you a while to decide which of the many competing electricity plans best suits your household needs, but the EFL format lets you concentrate on clear, consistent information that makes comparison possible. The Texas electricity market is highly innovative and sometimes confusing to consumers. The Electricity Facts Label can save you a great deal of time in assembling and organizing the information you need to make the best choice of electricity provider for your home and family.

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