Let’s face it: Most of us don’t read the Terms and Conditions before checking the “I Have Read and Understand the Terms & Conditions” box. But the devil’s in the details for a reason!  Also, there’s a big difference between the fine print for your electricity plan and your Spotify or Audible subscription. One’s a luxury service that costs a few bucks a month, while the other literally keeps your lights on (and that Spotify streaming).

Finding the right electricity plan that fits both your life and budget isn’t rocket science, but digging into the details can be intimidating. TDSP fee? Energy charge? Base charge? Disclosure Chart?

What do these terms mean and will they cost me?!

This is why we recommend learning how to read and understand the Electricity Facts Label (EFL) – the “Terms and Conditions” for each electricity plan. When you can interpret this document, shopping for affordable Texas electricity plans becomes much easier — and faster!

To help you understand the ins and outs of the average EFL, we want to discuss the eight key terms that are most important to you.

What is an EFL?

An Electricity Facts Label is essentially the fine print of your energy plan. In fact, every electricity plan created since Texas deregulated its energy market in 2002 has been required to have an EFL.

Why? For one, it protects you — the consumer. You just want the facts about the energy plan, not some fancy, smoke-and-mirrors marketing pitch! The regulating body behind these documents is the Public Utility Commission of Texas (PUCT). The PUCT requires all Texas Retail Electricity Providers (REPs), including Chariot Energy, to provide certain “disclosures” about each electricity plan. These disclosures — which include information such as base charge, average price per kWh and even renewable energy percentage — are what you need to look at when choosing a plan.

Dissecting an EFL: Look for These 4 Terms to Calculate Your Monthly Electric Bill

An EFL contains a ton of information, but to understand how much you might pay each month, only four key determinants really matter. 

  1. Average monthly use: This is an estimate of how much electricity you use. Simply review a few of your most recent bills and calculate an average. Note: during summer months, your bill is typically much higher because of the energy required to cool your home.
  2. Energy charge: If you have a fixed-rate plan, this is the actual fixed rate you pay to your REP for electricity. 
  3. Base charge: This is a flat fee your REP charges you each billing cycle (per month) no matter how much electricity you use. Note: not all REPs assess a base charge.
  4. Delivery charge: Also called a TDSP fee, this is what your Texas Transmission and Distribution Service Provider (CenterPoint Energy, AEP Texas, Oncor Electric Delivery and Texas-New Mexico Power) charges you to physically deliver your electricity. Note: your REP doesn’t determine this price; the PUCT regulates this charge and applies it to all plans. The delivery charge consists of a monthly flat rate plus a rate per kWh of usage.

If you’re looking at an EFL, it will be easy to spot these, as we’ve written them exactly how they appear on the document. Once you identify these numbers, you can actually estimate your bill! Here’s how you’d calculate it if your average monthly usage was 1,000 kWh:

(1,000 kWh x energy charge)


base charge


(1,000 kWh x delivery charge per kWh)


flat rate delivery charge


Your Bill (not including a few small taxes)!

Further Dissecting an EFL: What Else to Watch Out for

In addition to calculating your bill, you should examine the Disclosure Chart to review four key terms:

  1. Type of product: This indicates whether you have a fixed- or variable-rate contract. Learn more about the pros and cons of each plan type in our blog post, How to Shop for Electricity in Texas
  2. Contract term: This will tell you how long you are required to stay in your contract without paying an early termination fee. It also locks you into a fixed rate. Once your contract period is over, you will go on a month-to-month variable plan.
  3. Termination fee: Also called a cancellation fee, or an ETF, this is the charge you would incur on your last bill if you end your contract before it expires. It can range from no fee at all to hundreds of dollars. 
  4. Renewable content: If you’re environmentally conscious, this is one of the most important sections. This indicates how much of your electricity plan is sourced from renewable energy sources such as solar or wind. For example, all of Chariot’s electricity plans are 100% renewable!

Just like the first four terms, these terms are vital to determine if an electricity plan is right for you. For example, if you know you don’t want to deal with switching often, then you want to look for a plan that has a 36-month contract.

If you prioritize sustainability and the environment, you’ll want to hone in on that renewable content section. And as more people choose renewable plans, the number right below it, the Statewide average for renewable content, will only go up! This means less fossil fuel power is needed to power homes and businesses in Texas and fewer greenhouse gas emissions, which you and everyone at Chariot can get behind.

EFLs Help Consumers Find the Right Energy Plan

Ultimately, the EFL should help guide the energy decisions you make, not complicate it. Despite how confusing these sheets may look, the eight determinants on the EFLs explained above provide crucial information you need as you purchase a new electricity plan for your home!

Have you made it all the way down this article and are still confused? We don’t blame you! That doesn’t mean you have to be left in the dark, though. Contact us, and our excellent customer care team can personally walk you through one of our EFLs. We want to help you better understand how it all works — and possibly make the planet a little greener while we’re at it.

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