Texas Electricity Rates at 500, 1,000 and 2,000 kWh
Texas Electricity Facts Labels display residential average prices at 500, 1,000, and 2,000 kWh. Those three values are not recommendations for how much a household should consume. They are diagnostic points on the plan’s price curve. By reading all three together, a shopper can see whether fixed fees, TDU charges, bill credits, or other recurring components cause the effective cents-per-kWh figure to change as usage rises.
What each standard benchmark can reveal
| Monthly usage | What to inspect |
|---|---|
| 500 kWh | Fixed-fee impact, low-use penalties, and credits that have not activated. |
| 1,000 kWh | A common comparison point and a frequent target for bill-credit designs. |
| 2,000 kWh | High-use behavior, variable-charge accumulation, and credit caps. |
Why fixed charges change the effective rate
A $10 monthly fee contributes two cents per kWh at 500 kWh but only half a cent per kWh at 2,000 kWh. The fee itself has not changed; the denominator has. Variable energy and delivery charges behave differently because they rise with consumption. Bill credits can then introduce another discontinuity if a qualifying threshold is crossed. The three EFL benchmarks make those mechanics easier to spot.
Build an estimated bill from the formula, not from the average-price row
Start with recurring base charges, add the energy charge multiplied by kWh, add the applicable recurring TDU components, subtract any qualifying credit, and then include other recurring plan-specific amounts. Taxes and one-time discretionary service charges should be treated separately. Divide the recurring total by monthly kWh if you want to reproduce an effective cents-per-kWh figure. More importantly, keep the dollar estimate because that is what the household actually pays.
Test 950 and 1,050 kWh when a 1,000-kWh credit is involved
Standard benchmarks can hide a cliff. A product may look excellent at exactly 1,000 kWh because a credit activates there, even though 950 kWh produces a much higher bill. Testing usage just below and just above the trigger often tells the shopper more than the published benchmarks alone. The same approach works for any minimum-use condition or tier boundary.
Replace generic benchmarks with the home’s annual load profile
After using 500, 1,000, and 2,000 kWh to understand the formula, move to actual bills. A small apartment may rarely reach 1,000 kWh, while a larger all-electric home can exceed 2,000 kWh during hot weather. Calculate low, typical, and peak months from historical consumption. The best plan is the one that produces an acceptable expected annual result for that pattern, not the one with the lowest benchmark in isolation.
Time-of-use products require interval data
Two households can each use 1,000 kWh in a month and still receive different bills under a free-night or time-of-use product because their consumption occurs at different hours. In that case, the three monthly benchmarks cannot describe the full price shape. Use interval data when available and calculate how much load falls in each priced period.
From three benchmark rates to one decision
- Use the EFL benchmarks to identify fixed-fee, credit, and high-use behavior.
- Locate every threshold and test usage on both sides of it.
- Apply the formula to actual monthly consumption.
- Use interval data when timing affects the retail price.
- Compare annual estimated dollars and contract risk, not one advertised average.
Sources and methodology
The benchmark framework comes from the Public Utility Commission of Texas — §25.475 Electricity Facts Label rules. The Power to Choose — official shopping guide and Public Utility Commission of Texas — Types of Electric Plans provide additional shopping context. The current EFL remains the controlling source for a specific plan’s formula.
A simple fixed-fee example shows why the curve matters
Suppose a plan includes a $15 recurring monthly charge before any usage-based energy or delivery components. That fixed amount contributes 3.0¢ per kWh at 500 kWh, 1.5¢ at 1,000 kWh, and 0.75¢ at 2,000 kWh. Nothing about the fee changed; only the amount of consumption changed. A bill credit can create the reverse pattern by suddenly lowering the effective rate once a threshold is reached. Looking across all three EFL points is therefore a fast way to identify whether the plan’s economics are smooth or highly usage-sensitive.
Standard benchmarks are most useful as a diagnostic screen
Use the three figures to ask questions. Does the price fall steadily as usage increases? Does it suddenly dip at 1,000 kWh? Does it rise again at 2,000 kWh? Each shape points to a different underlying mechanism worth checking in the EFL. Once the mechanism is understood, stop treating the benchmark as the decision itself and move to the household’s real data.
Annual modeling should preserve month-by-month detail
Do not average twelve months of kWh first and calculate one artificial “average month.” That can hide a credit threshold that is met in six months and missed in six others. Model each month separately, then add the twelve estimated bills. This preserves seasonality and exposes how often the plan reaches the conditions that create its advertised average price.
That month-by-month method is slower than reading one headline, but it produces a much more defensible estimate.